Project detail - Acon Timber S.A.U.

Who is our prospective customer?

Acon Timber S.A.U (“Acon Timber”) is one of eight production units of Austrian HS Timber Group GmbH (“HSTG”), a leading global wood processing company. Located in Virasoro, in the province of Corrientes, Argentina, the sawmill was officially inaugurated in early 2024 and is a joint venture between HSTG and Belgian Forestcape Group. The modern sawmill is designed to process pine wood (Pinus taeda and Pinus elliottii) sourced from sustainably managed plantations in the region. It is equipped with cutting-edge and resource-efficient technologies. Currently, the sawmill has an annual production capacity of 370,000m3 of sawn lumber. Additionally, the facility can produce up to 132,000 m3 of ENplus certified pellets annually from wood chips, sawdust, and wood shavings, ensuring full utilization of all by-products and supporting a “100% zero-waste” design. Products are mainly exported to North and Central America, the Middle East, and Asia.

What is our funding objective?

FMO intends to finance USD 30 million in total, of which USD 10 million will be uncommitted. The proceeds from FMO’s loan will be used to finance capital expenditure to increase the sawmill’s annual cut volume capacity and to support general working capital.

Why do we want to fund this investment?

There are approximately 200,000 hectares of commercial pine plantations within a 100km radius of the Acon Timber sawmill. Yet the region lacks sufficient wood-processing capacity, leaving these planted forests underutilized and limiting economic potential. Acon Timber’s sawmill helps fill this gap by adding much-needed processing infrastructure and supporting a more stable local timber market, benefiting forest owners and the rural economy. The project aligns well with FMO’s forestry strategy and is backed by strong shareholders with deep industry expertise and a proven track record in the sector of over 50 years. The proposed financing is expected to qualify for a 100% Green Label under the Biodiversity category.

What is the Environmental and Social categorization rationale?

According to FMO’s Sustainability Policy, this is an E&S category B+ investment, as it involves significant adverse environmental and social (E&S) risks and potential impacts that may vary, but can be addressed through appropriate management plans. The main risks associated with this project are: (i) occupational health and safety risks; (ii) community health and safety risks due to truck traffic; (iii) potential impacts on modified and natural habitat along the supply chain (mostly due to forest owners without certification not respecting legally protected areas and not following sustainable forestry practices). While all IFC Performance Standards (PSs) are applicable to this investment, FMO’s environmental and social due diligence indicates that the investment will have potential impacts which must be managed in a manner consistent with: PS 1 - Assessment and Management of Environmental and Social Risks and Impacts; PS 2 - Labor and Working Conditions; PS 3 - Resource Efficiency and Pollution Prevention; PS 4 - Community Health, Safety and Security; and PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources.