Higher harvest volume – lower production
The harvest volume was 129 600 m3, 4.2 % more than in the previous year. The sawmill processed 120 400 m3 of logs, about 10 % less than in the previous year. The yield was increased by 1 percentage point. This resulted in a 5.6 % reduction in sawn timber production, namely 22 620 m3 (previous year: 24 000 m3). The volume of processing of 11 000 m3 per month was not reached. This was due on the one hand to the availability of logs, the wood species mix, and the associated sales opportunities, and on the other hand to the necessary maintenance work.
Supplies to the energy plant were in line with regular annual volumes, while compensation deliveries had been made in the course of 2016 due to an operational interruption. On 15 December 2017, a large-scale campaign was launched against the illegal trade in sawn timber. The Federal Police blocked the entire loading of containers at the Port of Manaus – a total of 440 containers, 64 of which were shipped by PW Amazon. Although of course all of PW Amazon’s containers met the requirements, the irregularities at other suppliers led to delays in delivery. No export sales could be generated during the months of December 2017 to February 2018. As a result, our working capital increased and there was a tight liquidity situation.
The investments of around EUR 0.7 million were used primarily for the expansion of the forestry road network and seasoning capacity. Various building extensions and technical adjustments to the sawmill production lines were carried out exclusively in-house.
The local currency (BRL) appreciated by around 10 % against the euro. Virtually all costs are incurred in BRL, which resulted in a negative impact on the income statement. This could not be offset by sales volumes or price adjustments.
Legal rules and our commitment to the sustainable use of tropical forests require that our company in Brazil has to harvest many different species of wood. This constitutes a great task and also entails greater complexity for our operational activity. Our ongoing challenge is therefore to establish and promote unused or underused species on the export market and to examine their areas of application. On the local market, market prices are very low, and transport costs to the populous areas in the south of the country are high. For that reason – and because we compete on the home market with illegally harvested and thus cheaper sawn timber – our competitiveness on the local sales market is limited. We are thus grateful that we are regularly able to gain customers in Europe and Asia for the use of new species of wood that are not very well known on the market, that we are able to convince them of the specific qualities of those species, and that we are able to enter into promising partnerships.