Investment case

Investment case

1. Demand for wood fibre set to explode while supply faces challenges

The on-going shift away from fossil-based materials (plastics, textile etc) is gaining momentum by the day. This development paired with tougher restrictions facing forestry in the northern hemisphere create a demand-supply gap for wood fibre. This is where responsibly managed and certified plantations with fast-growing trees, like eucalyptus that grows to full-sized trees in 5-8 years compared to around 80 years for a pine tree, will play an important role for the international raw wood commodity market.

2. Demand for biomass is growing for every day

The Brazilian market for wood chips is one of the largest in the world. And it’s growing every day – 2023 being a new record year. A major contributing factor is the focus on green energy and biomass. Most bigger production facilities are self-sufficient when it comes to energy production due to the country’s challenges with its power distribution grid and there´s a fast shift from fossil fuel to bioenergy, leading to a huge demand for wood chips delivered to major industrial players own facilities around the country.  

3. Sourcing is key – our unique sourcing capability is ready to be scaled to meet the demand

Due to the supply gap in the raw wood market sourcing is key – what you can harvest you can sell. Eternali has already (during the last 5 years) surveyed existing forest assets across Brazil and invested in and developed a completely unique platform with direct connections to official land databases which form a unique search engine for access to the right land and raw material. We call this platform Terroá. With exclusive access to this platform, we get a great advantage in the sourcing of raw wood materials and plantations – both for wood logs and for residues for wood chip production. Our teams on site in northern Brazil also have established strong relationships with most sawmills in the local surroundings to further source residues for our wood chip facilities.  

With Terróa and our senior team on site we have a strong sourcing advantage and are ready to scale up to meet the demand.  

4. Strong customer agreements in place

Eternali has proven its capacity to both source forest products and run its own production facility in Brazil that meet the stringent quality standards our customers. For its production of wood chip, Eternali already have signed agreement with big clients in Brazil for larger volumes. For our sourcing and trading of wood logs, Eternali is set to sign long-term agreements for its product with some of the largest buyers in the paper production industry, awaiting finalized FSC-certification of plantations.

5. Sustainability at the core

The team tasked with managing Eternali draws on decades of experience in sourcing and managing international distribution chains as well as running local production for domestic and international supply. The team is fully committed, as employees and individuals, to make Eternali a trustworthy supplier of wood-fibre and biomass. Therefore, sustainability and ESG is at our core: The world needs more wood to substitute plastic and oil, so let´s focus on producing more wood from where it grows 5-6 times faster than in Europe or the US. The world needs more forest for carbon sequestration, so let´s support planting trees on degraded land. The world needs to protect biodiversity, so let´s demand best-in-class sustainable value-chains. The world needs greener energy, so let's contribute to the shift from fossil fuels to biomass from wood. And let´s do all these things while maintaining modern ESG standards.