MagForestry revenue is generated from the sale of wood chips rather than round logs, greatly enhancing revenues and margins. Essentially all production has been sold forward for the next two years to fibre customers in Europe.
Consultants reports have indicate that the EFC forestry concessions can eventually provide up to 1,600,000 tonnes per year. Production of this amount of wood fiber, all within an 80 km radius of a deep-sea port, represents a very unique situation. While MagForestry has positioned itself to be a growing supplier of eucalyptus chips to world fibre markets, longer term consideration may be given to further steps forward in the value added chain.
A production volume of one million tonnes per year could readily support a world scale fibre board plant (MDF and/or HDF) or at 1.5 million tonnes plus, the volume would be sufficient for a high yield pulp (HYP) plant. Hardwood HYP is a major growth product within the worldwide pulp and paper sector.