Obtala, the African focused agricultural and forestry company, reported $8 million contracted sales for the Q1 2018, and 3.6 thousand m3 lumber production.
The company’s new veneer factory in Gabon has moved into test phase with production anticipated to commence early in Q2 2018. Company expects veneer to be its highest margin business line. Achieving capacity output is a priority for 2018 and resources will be allocated accordingly. Some additional custom-built engineering modifications have been incorporated, which will allow for the addition of a plywood making line to be added in the future. Any additional investment will be funded from free cash flow.
On 28 March 2018 company acquired two brand new bulldozers and three MAN trucks, financed via the recent equity raise. This new equipment will facilitate the transportation of volumes of timber from company’s concessions sufficient for the veneer factory to run at capacity. The achievable volume of sawn timber production from the company's sawmill in Gabon has, to date, been constrained by the amount of timber received from concessions, which is a function of available harvesting equipment. The aforementioned, recently purchased bulldozers and trucks, in addition to supplying veneer factory, will also supply additional timber to sawmill, sufficient to increase output by ~20%, company said in a statement.
The sawmill in Nampula, Mozambique came online in Q1 2018, with the arrival of brand new Wood-Mizer processing equipment from South Africa and some older equipment moved to Nampula from the existing sawmill in Uape. No harvesting is permitted in Mozambique from January to March each year but testing of production lines at the new sawmill is being conducted on timber harvested from concessions during Q4 2017.
