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NTE History

Wattle Industry’s early roots in South Africa

1880

Although the wattle tree is indigenous to Australia, the first trees were planted around 1880 and it was in South Africa that wattle was first undertaken on a commercial scale.

1884

The first wattle trees were planted for ornamental purposes and as shelter belts for stock; the wood being used as fuel. Credit has generally being given to the late Sir George Sutton, who in December 1884 sold a few tons of silver and black wattle to a South African tanner who in 1886 reported that black wattle was the more valuable of the two species in terms of tanning purposes.

 

1887

The first company to export wattle bark on a commercial scale was Messrs Angus; by 1887 they had secured reasonable freight rates, after which excellent prices on the English market were obtained. Again in 1887 10 tons of chopped bark were packed tightly in muid bags (200lbs = 91kg) and sent to London. Encouraged by the success of this export transaction, other growers shipped their bark overseas.

1899 – 1902

The expansion of the industry thereafter was rapid, although it suffered a slight setback during the South African War (1899-1902) when trading on overseas markets became more difficult.

Formation of Natal Wattle Bark Union marks a turning point

1907

However, the formation in 1907 of the Natal Wattle Bark Union (NWBU) with the aim of furthering the interests of wattle growers in marketing wattle bark abroad was to prove a key turning point.

The marketing difficulties suffered during the second Anglo-Boer War led to a fresh investigation into the viability of preparing an extract from wattle bark. With this objective in mind, the NWBU formed a syndicate to conduct experiments on extracting tannin from wattle bark, with the intention of establishing a factory in Natal for extract production, if proved successful.

1913

Although this evoked a flood of interest, manufacture of extract locally was temporarily shelved until 1913, when successful development work carried out by a certain Owen Walters in Pietermaritzburg made the process more commercially sustainable.

Outbreak of World War I proves a fortuitous factor in growing Local Wattle Industry

1915 – 1916

The outbreak of World War I was an important, if fortuitous, factor in the development of the industry. Tanning materials were very much in demand, prices were high, and there was a considerable premium in shipping space, which provided the stimulus necessary to implement this discovery.

This resulted in the flotation of the Natal Tanning Extract Company partnership by Messrs Owen Walters, Thackeray James Allison and Arthur Horace Hime, and in 1915, a factory was erected in Pietermaritzburg, with the first extract produced in February 1916.

Formation of Natal Tanning Extract Company Ltd

1920

By 1920, the wattle Industry was in a state of transition with as many as 15 factories planned in Natal alone. The majority were bark press factories, ground bark as it was known, which could produce 35 000 tons per annum running at full capacity.

That year would mark a pivotal year for the local wattle industry when the Natal Tanning Extract Company Ltd. was established.

The Forestal Company, whose interests in the Natal wattle Industry were originally represented by the South African Extract Company Ltd, subsequently purchased the company’s assets, the agreement of sale being negotiated by T.J. Allison, one of the three partners in NTE.

 

1920

It was formally ratified by both parties in London on June 30 1920 when a new company, the Natal Tanning Extract Company Limited, was formed to take over the assets of the partnership and later, those of The South African Tanning Extract Company Ltd.

Although both companies were now owned by the Forestal Company, they at first retained their separate identities, but the South African Tanning Extract Company Ltd was shortly afterwards absorbed by NTE.

NTE embarks on aggressive factory rollout

1920

By July 1920 two NTE factories were operating, in Pietermaritzburg and Inanda respectively, the former with an output of about 400 tons and the latter about 200 tons per month.

In addition to these, a plant at Rooi Spruit with a capacity of 900 tons a month had been delivered before mid-year, but only commenced producing by the end of 1920, having been opened on December 6 1920.

1921

Another factory located at Paddock was opened in 1921 with a capacity of 300 tons per month, and construction of a further factory at Kimunata near Highflats had commenced, but at the date of purchase, only the evaporating plant had been delivered, and the siding and foundation for the building constructed.

The Pietermaritzburg factory laboratory was opened in February 1921 when a Dr Hedley arrived from England to take up his duties as chemist.

 

1922 – 1937

In the early phases of reorganisation, the Mersey factory, which was acquired from the SA Tanning Extract Company, was closed in November 1922.

Following its closure in 1922, the plant at Inanda was discontinued and never reopened, but in 1927, the Paddock factory was converted into a bark buying depot and in 1937, repurposed as an extract factory.

The number of factories rolled out and their location reflected the NTE’s policy to encourage the outside wattle grower to purchase plantations from which they could draw their own supply.

However, as a consequence of this approach and its policy to manufacture only from green (fresh) bark, extract production was not sufficiently centralised and production costs were high.

Global depression hollows out Local Wattle Trade

1923

Shortly after the NTE had begun to operate it became clear that not only had its assets been overvalued at the time of purchase, but it was suffering gravely from the effects of the world depression that followed the trade boom after World War I.

Prices had been maintained at a high level owing to the demand which continued in the early post-war period, but prices of wattle extract soon dropped alarmingly, and by 1923 had fallen to £20 per ton. The subdued sales and accumulation of stocks naturally had an adverse effect on the cash position in London and South Africa, necessitating the erection of additional storage.

 

Furthermore, with the tanning trade overseas stagnant, leather stocks had accumulated and there was a general reluctance among tanners to increase their stocks further and lock up a larger amount of their own or borrowed capital.

When trade conditions improved, Forestal’s African investment continued to be a disappointment and it became abundantly clear that a strong helmsman was needed to direct the course of the company, a man with fresh ideas who was not handicapped by ties with the original African companies.

Charles William Biggs takes the helm

1921

Such a man was Charles William Biggs, who began his career as a messenger boy with the Sante Fé Land Company in the US, later serving in World War I, where he reached the rank of major and earned the Military Cross. He was selected to go to Natal as chief accountant and on February 15 1921, he was officially confirmed in this role by the Natal board, and soon after, as joint manager.

1932

A year later Allison resigned as managing director, upon which the London board appointed Biggs sole general manager; in 1932 he was made managing director.

NTE Consolidates

1925 – 1928

By 1925 the chairman announced that NTE’s position had more or less consolidated; it now owned three factories making solid extract and about 15 500 ha of the best wattle land.

It was during this period that NTE looked to expanding its property portfolio to the Eastern Transvaal and the area around Melmoth in Zululand. In time bark mills were erected in Melmoth and later in Iswepe to consume the available bark. By 1928 NTE owned 30 estates and a cattle farm, the latter being for resting and feeding the oxen used for transport but which also had 28 300 ha under wattle.

Branching out to Kenya

1932 – 1933

Later the same year the South African Wattle Extract Manufacturers Association was founded. In 1932, the Forestal board approved a recommendation to establish a branch of the NTE Company in Kenya, with a bark mill and extract factory taking over an existing factory and land belonging to the British East African Wattle Estates and Extract Company at Kikuyu at a cost of £10 000. In 1933 an industrial site was purchased at Thika and after a plant had been erected, milling operations were transferred there.

1934

In 1934 the Indian firm of Premahand Raichand & Company opened the Kenya Tanning Extract Company Ltd and in the same year they acquired the old Bakan and Kenya Company. By the end of 1934 all purchase of bark had virtually passed into the hands of both these companies and competition between the two threatened to become very intense.

 

1937

Negotiations between the two took place with a view to putting an end to this undesirable state of affairs and in 1937 the Kenya Extract Manufacturers and Exporters Group and the Kenya Bark Millers and Exporters Group were formed with the approval of the Kenyan government.

By November of that year the Forestal board regarded the Kenya branch of NTE as sufficiently established to stand on its own feet and on November 15 1937, the East African Tanning Extract Company Limited was incorporated as a separate entity within the Forestal Group, its shares being held by NTE.

Local operations face strong headwinds

1935

By 1935 the entire area under local wattle cultivation was expected to have achieved its full cycle when about 1/9 of the trees could be cut and stripped for bark every year. Nevertheless the company’s affairs were not running as smoothly as they should.

It proved impossible to control the volume of wattle bark being stripped and as only a limited quantity could be absorbed, the price of exported bark threatened to drop to an uneconomical level – a development as detrimental to the wattle growers as it was to exporters.

1935 – 1937

Consequently, in 1935, the Union government appointed a commission of inquiry to probe the state of the local wattle Industry. Emanating from this inquiry, compulsory government grading of all wattle bark exported from South Africa was introduced in 1937 and the Wattle Bark Millers and Exporters Association, which had been formed in July 1936, gave its full co-operation to the scheme.

Gaining traction through World War II

1939 – 1945

As with World War I, it soon became evident that Forestal, still the owners of NTE, would play an essential role in supply, and wattle extract in reality became the only tanning materials available to the Allies in considerable tonnages, with the exception perhaps of Quebracho to the US.

From 1939 to 1945 the price of wattle rose by 24%. In the UK a government subsidy was introduced to cover the difference between the purchase and fixed selling price of tanning materials to the consumer; this made it possible to maintain a low and even figure for the finished products. However this put a drain on the country’s financial resources, so its government favoured the use of vegetable tanning extracts.

Biggs resignation rings in new management changes

1945 – 1950

In 1945, Biggs decided to resign due to ill health, though he stayed on as adviser to the East African and Southern Rhodesian concerns until 1950. In his place, Sidney Clegg, NTE’s manager since 1934, was made general manager on July 1 1945, and a year later appointed managing director.

NTE soars amid post-war boom

1951

When the war ended price control was relaxed and the greatly increased demand for tanning materials brought about by post-war stockpiling, especially in countries which had been under German occupation, caused a rapid rise in wattle bark and extract prices and by 1951, the price of wattle bark had reached its highest recorded level up to that time.

1947 – 1949

By 1947 NTE production had reached the record level of 56 000 tons per annum, and by 1949, 68 000 tons per annum at £40 per ton, making it the world’s cheapest and most popular vegetable tanning extract.

 

1954 – 1956

In August 1954 the entire hectares under wattle was about 242 400ha and in 1956, 283 000ha. It was also during this period that the Hermannsburg factory was built, initially as a two-unit factory processing about 150t of bark per day.

1947 – 1954

By 1952 NTE was regarded as the Forestal Group’s principal profit earner, and during the period 1947 to 1954, the share capital of the South African company was increased from £1m to £5.4m, representing mainly profits “ploughed” back into group assets.

With the increased demand for wattle extract during and after the war, the NTE board decided to expand its property division. In addition, NTE also controlled three wattle growing subsidiary companies, namely Murchison Plains Black Wattle Company, Alfredia Wattle Company and the Ihluku Wattle Company, which between them owned 6 250 ha, 83% of which was under wattle, all three supplying the Paddock factory.

Under the stimulus of these good times, many established growers expanded their wattle hectares and speculators purchased vacant land wherever it was found and planted wattle. The result of this huge afforestation was to increase wattle not only in Natal but also in other parts of the country.

Market enters the doldrums as supply exceeds demand

1958 – 1960

But by 1958, when substantial volumes of bark from the earliest of these new plantings were first entering the market, the world demand for tanning material had fallen materially and bark supplies considerably exceeded the demand.

To address this anomaly, a bark quota system was introduced, but its imposition had an immediate effect on grower income, with many growers forced to concentrate on sugar cane and other crops.

In 1958, legislation known as the Wattle Act was introduced under the Department of Forestry and on March 25 1960, the Wattle Bark Industry Act was finally passed.

 

1967 – 1968

In February 1967, due to the decline in wattle extract, the then NTE board of directors took a decision to rationalise its operations, which saw a number of NTE factories closing down.

The Paddock factory closed in 1967, and the Pietermaritzburg plant on May 31 1968, with its spray dryer and a second unit of autoclaves transferred to Iswepe.

This left NTE with only three factories, namely Iswepe, Melmoth and Hermannsburg, with an estimated installed capacity of 58 900 tons.

NTE undergoes change of ownership

1969 – 1970

In 1969, with the assistance of all the vegetable tanning extract manufacturers, the UK-based Slater Walker Group of Companies took over the sales section of the Forestal Group in London.

During this time, NTE sold its magnificent head office building (NTE House) in Loop Street to the Witwatersrand Gold Mines Employee Provident Fund in August 1970.

1973 – 1974

However, the UK’s 1973 recession saw the collapse of the Slater Walker Companies and in 1974 Anglo American Corporation acquired from Slater Walker Securities (SA) Ltd the entire interest in its wholly owned subsidiary, the Natal Tanning Extract Company Ltd.

 

1983

In 1983 NTE bought the NCS factory in Vryheid and closed the factory the following season with most production plant being transferred to Iswepe and Hermannsburg.

Company moves into the future under a new name

1987 – 1993

On July 23 1987 the name was officially changed to NTE Limited. The company traded under this name until January 1 1993 when Anglo American merged NTE Ltd into its Mondi Forestry and Paper Division and the company became a wholly owned subsidiary of Mondi Paper Company Limited.

The company traded under the name of Mondi Forests until October 1993 when it underwent yet another name change – this time to NTE, a division of Mondi Paper.

 

1997

In October 1997 the current NTE Company was purchased from Mondi – late chairman Bailey Bekker was instrumental in negotiating the purchase – and a new co-op, trading as NTE Cooperative Ltd Co-op, was formed.

2006

With changes to the Co-operatives Act in 2006, the NTE board of directors opted to convert to a company known as NTE Company Limited and in 2013 it changed again to NTE Company (Pty) Limited.

How NTE got its elephant logo

NTE’s elephant brand logo took its inspiration from the fact that the wattle tanning industry started in the land of the elephant – Umgungundlovu.

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