The American Mark crandall and the Uruguayan Matias Abergo became partners in 2020 to participate in the booming business of the mass timber (massive wood). Together they lead an investment group that, assuming the debt, turned over more than US $ 25 million for the purchase of the Frutifor Lumber Company (ex Urupanel) sawmill of Tacuarembó and since then it is in the process of expand that amount widely.
In dialogue with The Observer, Abergo detailed that they currently plan to invest US $ 6 million in the new drying plant, another US $ 6 million in the automatic table sorting plant and US $ 22 million in the CLT plant. “So apart from the purchase – which exceeded US $ 25 million – we reached about US $ 34 million “. That is, the total investment in the industrial project reaches an amount of almost US $ 60 million.
The company Arboreal, part of the Enkel Group business group led by Abergo, will install the production of mass timber in the old Frutifor plant with technology cross laminated wood (CLT for its acronym in English) that will allow high-rise buildings to be built in wood. Abergo explained to The Observer that the CLT technology originated in Austria allows that “instead of being able to make a house with two or three floors, you can make a building with 25 floors.” “This is a before and after in the country and in the region,” said the investor. It will be the second of its kind in Latin America and will be the largest on the continent, he said.
Following the acquisition of the Frutifor explant, exports doubled of the sawmill in boards, which today add up to a value of almost US $ 80 million.
“We are moving 400 containers per month“Said the businessman. In addition to that, the company aspires to the CLT plant is inaugurated in October 2022. It will process 30% of the wood in the first instance, raising the value of sales to more than US $ 105 million, according to the projection. The general manager of Arboreal confirmed to El Observador that, since the purchase of the sawmill, the workforce of direct workers doubled and so did the number of outsourced workers. Encompassing both groups, entrepreneurship today employs 200 people and will add around 50 more upon opening of the CLT plant.
An unusual investor
Abergo partner Mark Crandall was involved in the creation of the “oil desk” of Morgan stanley and was the founder of the colossus Trafigura Group, a multinational dedicated to the sale of commodities and the second largest independent oil trader in the world, with more than US $ 100 billion in annual income. He retired from the business about 15 years ago to turn to financing ecologically sustainable projects. By then, he was “moderately wealthy” as he told Bloomberg and became aware of “the strong ethical component” of the activity as evidence on climate change accumulated. The US media revealed that his net worth today is currently “less than $ 100 million. ” Abergo told El Observador that, although he cannot give percentages, Crandall’s contribution to the capital of the investment group is “very important”.
Abergo pointed out that changing construction materials to wood inputs involves addressing part of the solution to the problem of climate change. This, according to the businessman, is part of a path that begins with trees growing in forests. Through the process of photosynthesis, they absorb carbon dioxide (COtwo), while emitting oxygen. “If with those trees, instead of being energy or rotting in the field, you make buildings and houses, you are ‘sequestering’ that carbon for the useful life of those buildings, which in the mass timber is calculated by more than 100 years”, He assured. “For every cubic meter of wood you sequester a ton of COtwo. So, on the one hand you have a traditional construction that emits a lot of COtwo and, on the other hand, a construction that sequesters carbon for the useful life of buildings ”, highlighted the investor.
“In Uruguay we have approximately 1.1 million hectares of afforestation, of which 150 thousand are from pines and the rest is eucalyptus. The eucalyptus part developed very well with the pulp plants but we did not have the possibility of having the same industrial success with the development of pine ”, which is more appropriate for manufacturing processed wood. The investor complained that the best quality wood is currently exported as raw materials.
The income of dollars to the country generated by exports of forest products, not counting cellulose, will show a growth of 25% at the end of the fiscal year 2021 compared to US $ 350 million last year, according to estimates by the Society of Forest Producers (SPF) of Uruguay.
“We have fantastic natural resources that due to lack of industrialization we are exporting without any added value,” lamented Abergo.