Sustainable timber industry in Latin America: Development of Gemhold Group

GEMHOLD Group mainly operates in Colombia, Ecuador and Peru, throughout the timber industry value chain: forestry exploitation, wood processing (sawn timber, medium density fiberboard, plywood and chipboard) and the retail sale of furniture building materials. It has 110 outlets in Latin America, mainly in Ecuador, Colombia and Peru – where it achieves the bulk of its turnover –, but also in Guatemala, Honduras, Salvador, Nicaragua and Costa Rica.

Proparco’s loan will contribute to financing the first phase of GEMHOLD’s 2013-2020 expansion plan in Latin and Central America. It will mainly be earmarked to finance the opening of new outlets in Latin America and the construction of a production plant in Ecuador, to increase the group’s production capacity upstream in the chain. All the plantations of the subsidiaries of GEMHOLD and its related parties, in Ecuador and Colombia, are farmed in a responsible manner and are FSC-certified. The group has also undertaken to maintain an FSC control chain for all its products under the financing agreement.

This project will support the development of an FSC-certified (Forest Stewardship Council) timber industry, which is still in the minority in the international timber industry in Latin America. It will more generally contribute to the development of trade in the region. In addition, it will have an impact on employment, with the creation of some 800 new direct jobs in the coming years. It will also contribute to a transfer of know-how, thanks to the technical and management training programs for carpenters in GEMHOLD’s outlets.