Business update from Eternali CEO Andreas Forssell
From the start Eternali’s missions has been to produce and supply fast-growing wood fiber to paper and energy producers. With a strong focus on sustainability, and as a natural part of the green transition. During my time with the company it is clear, from all I hear from customers and potential customers, that Eternali’s position on the global market is truly an attractive one.
So far, 2023 has been an eventful year. Above all I’m very proud over the fact that we now have a completed customer order and are about to start operational activities. This is a commercial breakthrough, as for any start-up. To get to where we are today, a great deal of work has been put into preparing and building the logistics process that largely constitutes Eternali's core business. All this to be fully ready to take in customer orders and start delivering to the market and thus start the operational and cash flow generating business.
Building a logistics process for a forestry company with operations in northern Brazil is an extensive workload. During the year we have connected a series of important partners to us who all contribute in the logistical chain from plantation to customer. The chain that we call a "stream". Going forward, we want to develop as many streams as we can. Now we have done this once, we know we can do it several times with a lot less workload and thus scale up the business quickly.
Our partners contribute with deep knowledge of building so-called streams, not least from South America. Among them we have a global sales agent based in Portugal who helps us to secure profitable contracts with customers. Stable, long-term contracts with ongoing deliveries contribute to stable cash flows for Eternali. We have also partnered with a trading company which has long experience in delivering wood raw materials mainly in Europe and which contributes with strong expertise both in the logistics chain and with the delivery itself. Last but not least, through our new partners, we have a shipping company that takes care of logistics and delivery across the seas. With all these partners or components, Eternali can offer a complete solution for the delivery of wood raw materials anywhere in the world. To have done this during a 12-month set-up is impressive.
Being competitive in the wood materials market of today is about three things: Firstly, having the right type of wood that is sustainably sourced and managed. We know that the particular type of eucalyptus clone we offer perfectly matches the market´s requirements. Secondly, being able to offer short shipping routes is becoming increasingly important. We ship from Port of Santana in northern Brazil which saves a European buyer 20% distance, time, money and CO2 emissions compared to a harbor in southern Brazil, which is the more common route today. Finally, delivering thousands of tonnes of wood chips is a serious logistics excercise and this is where we have put all our efforts lately.
These efforts include negotiations as well as streamlining the whole work flow involving the harvest itself, the chipping of logs, the trucks going from plantation to river port, the barges taking the chipped wood from the river port to another port for building bulk and re-loading, then barge again to the deep port Port of Santana where the wood chips will be loaded from barge direct onto the ship. In this region, the Amazon river and its rivlets is seen as the natural means of transportation, great for both cost efficency and the environment as one barge carries the equivalence of 120 trucks at a 95 per cent CO2 reduction. This logistic work flow, as you can imagine, involves a lot of people and subcontractors; harvesters, truckers, barge operator, loaders, port operators, port auhtorities, port labor force, port unions…the list goes on and is what fills our work days. It is truly exciting to be so close to first delivery!
Since a lot has happened in the company we are now facing a very exciting period. The focus for the company and the management is now on getting deliveries started and scaling up the business. To achieve this, additional capital is required and we are now working with targeted activities for capital acquisition. Loans, issues and combinations thereof. It is not excluded that we will also be asking existing shareholders, as part of this process, before the end of the year. The capital raising is a crucial part the next months to be able to start the operations in the right way and at the right time. A future IPO is still on the map for Eternali but nothing that I as CEO focus on today. Instead my focus the next coming months is to continue to build a fantastic company and in doing that hopefully the opportunities for all our shareholders will follow.