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Summary of further activities
Over the past fiscal year, we were largely able to keep our Covid situation under control. At the beginning of 2022, the number of individuals testing positive in our workforce increased. As of mid-February, we no longer recorded any new cases. The precautions and hygiene measures are still in place today and are being implemented rigorously.
The investment volume in Brazil amounted to approximately EUR 2.8 million, including the acquisition of MIL Energia Renovável. About EUR 0.9 million was spent on machinery, buildings, and vehicles.
The local currency (BRL) no longer fluctuated as much against the euro as in 2020. However, prices for consumables increased by about 18 % due to inflation. Salaries are based on the official inflation index and increased by approximately 7%.
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 continues to be 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, but it improved thanks to actions taken against the illegal timber trade. We regularly gain new customers for use of lesser-known wood species in Europe, the United States, and Asia. 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 or in connection with the special features of the wood species.
In the reporting year, there was no new information concerning the pending threat of two major fines dating back to 2002 and 2007. The threatened fine by the Brazilian environmental protection agency IBAMA and a threatened property tax fine continue to be legal cases that our lawyers are working on, and we expect that the matter can be resolved within the scope of provisions already set aside.
Precious Woods Amazon in brief
Precious Woods has been operating in the state of Amazonas, Brazil, since 1996. PW Amazon runs sustainable forestry operations on 493 597 hectares of its own land and concessions (as of the end of 2021) near Itacoatiara, 170 kilometres east of Manaus. PW Amazon also operates its own biomass power plant. PW Amazon has been certified according to FSC criteria since 1997. In December 2017, PW Amazon was additionally certified according to PEFC guidelines. Certified forests are managed sustainably on the basis of an audited harvesting plan under which only two or three trees per hectare of forest are harvested in a 35-year cycle. At the same time, this gentle and sustainable use generates a source of income for the local population, which in turn contributes further to the protection of the forest. The harvested timber is processed into sawn timber, planed timber, construction piles, and finished products at the company’s own factory. The wood products are exported to Europe, the United States, and Asia as well as being sold on the local market.