Woodbois, has announced the signing of a profit share agreement with Future Earth II LLC a US company with substantial concessions in Mozambique, where Future Earth will fund, manage and operate Woodbois' Mozambique concessions, employees and equipment producing sawn lumber and veneers, which will then be sold by Future Earth.
The Agreement is for 3 years, with optional breaks after 12 and 24 months at Future Earth's discretion. All costs during the term of the Agreement will be funded by Future Earth with a 50:50 post-cost profit share from products sold from Woodbois' concessions. Should Future Earth proceed with years 2 and 3 they will pre-pay Woodbois $1 million each year, to be deducted from the Woodbois share of profits for each respective year. Profits will be distributed quarterly.
The Company has been seeking ways to recommence operations since the concessions were put on ‘care and maintenance’ two years ago and believes this agreement with Future Earth provides benefits to both parties, not least from the economies of scale from Woodbois' 300,000 hectares and Future Earth's 620,000 hectares of concessions.
Management therefore believes the new agreement enables the Company to capture a greater portion of the value chain, create new employment opportunities while reducing the carbon footprint by producing in-country.
Woodbois CEO Paul Dolan said: "Woodbois and Future Earth share strong sustainability values and I'm delighted to announce this agreement which I believe will prove beneficial to both parties. The agreement will allow Woodbois 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."
Lenny Shibley, industry veteran and Chief Operating Officer of Future Earth, said: "In 30 years in the industry, I have seen no better opportunity to deliver economic value, coupled with step-change social uplift for local communities, than through the environmentally responsible use of Mozambique's timber resource. We very much look forward to further developing our relationship with Woodbois as we add the management of their timber resource to our operations."
About Future Earth
Future Earth has built sustainable industry programmes in Mozambique since 2006 and processes timber into lumber and finished products through its sawmill and veneer manufacturing facilities in Mozambique. Future Earth is the recipient of many national awards including the Presidential Award for "Best Exporter of Value-added Timber Products" and the "Best Rural Industrialization Project in Mozambique".