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Higher harvest volume, increased production volumes, higher yield

Increases in volume and yield

The harvest volume was 156 100 m3, 1.1 % more than in the previous year. The sawmill processed 155 300 m3 of logs, 27.5 % more than in the previous year. PW Amazon was once again able to increase yield. This resulted in a 33.0 % higher sawn timber production of 34 350 m3 (previous year: 25 820 m3). The production year began in mid-January. The annual maintenance work could be carried out as scheduled and staggered throughout the year, so that production was only marginally restricted.

The harvest area was divided into two different sectors in 2019. The ministry granted us the harvest permit for the new sector too late, but fortunately this caused only insignificant delays in the work. Harvesting activity was much more impacted by early and heavy rainfall, which began in September already. Normally heavy rains begin only in December, when the timber has already been harvested, but the logs have not yet been completely transported out of the forest. These exceptional weather conditions meant that we were unable to complete the harvest on schedule in mid-November, but instead had to work until the end of December and this under difficult conditions. The log transport should have been completed in February 2020 according to the schedule. However, this was prevented by a wrongful blockade of logistics by the ministry. This obstruction is once again a clear case of abuse of authority and corruption, which will lead to further legal action on our part. Already in 2019, we filed a claim against the government for damages in the amount of approximately EUR 0.9 million, due to the impairments and events that took place in 2018.

The investment volume in Brazil was about EUR 0.8 million. This was spent on the expansion of the road network, new infrastructure, renovation measures at the sawmill, and transport equipment.

The local currency (BRL) increased in value by about 2.7 % against the euro. 85 % of sales are made in EUR, 10 % in USD, and 5 % in BRL, while nearly 100 % of costs are in BRL. This had a slightly negative currency impact on the income statement.

Legal rules and our commitment to the sustainable use of tropical forests require our company in Brazil to harvest many different species of timber. This constitutes also a great challenge and also entails greater complexity for our operational activity. Our ongoing task is to establish and promote lesser-known and lesser-used timber species on the export markets, to examine their areas of application and to increase their familiarity. On the local market, prices remain very low, and transport costs to the populated areas in the south of the country are high. There is also a lack of awareness in regard to legally produced timber, and we are competing in the domestic market with illegally harvested and therefore cheaper sawn timber. As a consequence, our competitiveness on the local sales market remains limited. We are all the more pleased that we are regularly able to gain new customers in Europe, the United States, and Asia for the use of lesser-known timber species exported from Brazil. Increasingly, we are successful in educating customers, persuading them to buy these timber species, entering into promising partnerships, and opening up markets for products with specific applications for the wood.