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Michael Tome Business Reporter

Timber producer and processor Border Timbers says it anticipates a surge in exports stemming from regional demand of lumber and poles.

In its six months to December 31, 2019 trading update , Border Timbers, revealed that “there is growing demand” for their products in regional countries and beyond, a development that has potential to catapult the firm’s exports in the year underway.

Border Timbers, which still operates under judicial management, indicated that production and sales volumes for the said period reduced as a result of lower demand coupled by sharp power outages that led to a diminished  production of lumber and treated poles.

In the period, lumber production fell to 28 400 compared to 55 800 cubic metres recorded in June last year, while treated poles production fell to 6 000 cubic metres by December 31, 2019 from 12 600 cubic metres in the comparable period.

In a statement accompanying the half year trading update Peter Bailey, who is the Border Timbers judicial manager said:

“Currently there is increasing demand for our poles in the region and an increase in both production and sales is anticipated in the next quarter.”

He went on to outline that, “Lumber production was lower compared to same period prior year due to low production at the Charter Sawmill caused mainly by power outages, which in turn had a knock-on effect on sales volume as it resulted in lower sales compared to prior year.

“However, the improved quality and value addition at the mills resulted in improved average selling prices and better revenue.”

Revenue in the period under review grew to close the half year at $110,1 million from $13 million in December 2018.

Revenue saw positive improvement compared to prior comparable period mostly driven by better average selling prices (ASP) on both lumber and poles.

However, despite the improved revenue; profit for the year was lower, mainly attributed to exchange losses from a foreign loan with the net unrealised exchange loss of  $46,8 million.

The timber producing firm like many other enterprises bemoaned the shortage of continuous grid power resulting in the use of very expensive alternative sources of energy like diesel generators.

In the outlook the timber producer highlighted that it will continue to focus on maximising value of its biological assets.