Woodbois hails the restart of forestry operations in Mozambique after agreeing a deal with US firm

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Woodbois hails the restart of forestry operations in Mozambique after agreeing a deal with US firm

2:56 CAT | 19 Mar 2020

The 300,000 hectares of trees have been on care and maintenance for over two years after an export embargo was put in place. Future Earth will combine the Woodbois operation with its own 620,000 hectares to create significant economies of scale, the UK firm told investors. [File photo:Proactive Investors]

Future Earth II will fund, manage and operate the AIM-listed group’s concessions in the country to produce sawn lumber and veneers

Woodbois Ltd (LON:WBI) has inked a deal that will see the restart of the forestry and timber trading specialist’s operations in Mozambique.

US group Future Earth II will fund, manage and operate the AIM-listed group’s concessions in the country to produce sawn lumber and veneers.

The 300,000 hectares of trees have been on care and maintenance for over two years after an export embargo was put in place.

Future Earth will combine the Woodbois operation with its own 620,000 hectares to create significant economies of scale, the UK firm told investors.

The agreement is for three years with break options at 12 and 24 months and a 50:50 post-cost profit share.

If the partnership moves into years two and three, Future Earth will prepay Woodbois US$1mln each year deducted from the profits.

The American company has built a sustainable lumber and finished timber business that operates facilities in-country rather than exporting semi-finished product.

This business model captures a greater portion of the value chain locally, creating more employment and reducing the carbon footprint of finished goods, which has been recognised by multiple Mozambique Presidential Awards.

Woodbois chief executive Paul Dolan said: “The agreement will allow [us] to start realising value from our substantial assets in Mozambique without diluting management focus or financial resources, which can now be fully concentrated on bringing our operations in Gabon to optimal capacity and on our international timber trading business.

“I hope that this signals the start of a long and fruitful relationship between our respective companies as well as our hardworking and dedicated teams on the ground in Mozambique.”

Source: VOX Markets