Company history
1990 Precious Woods is established by a group of Swiss investors with the support of forestry
experts from Costa Rica; Precious Woods Costa Rica begins to reforest abandoned pas-
ture land.
1994 Precious Woods Amazon develops the first sustainable forest management operation in the
Amazon – operative from October 1996.
1997 Precious Woods Amazon is certified in accordance with the criteria of the Forest Steward-
ship Council (FSC).
2001 Precious Woods Pará is established together with A. van den Berg B.V.
2002 Precious Woods is listed on the SWX Swiss Stock Exchange.
2003 Precious Woods Nicaragua is founded.
2005 A wood-chip fired power plant in Itacoatiara is acquired and Precious Woods Energia
is founded.
2005 Acquistion of A. van den Berg B.V. (Precious Woods Europe).
2006 Precious Woods sells its first Carbon emission rights.
2007 Precious Woods acquires forestry and wood-processing companies in Gabon and a
minority interest in a forestry group in the Democratic Republic of Congo.
Overview
Precious Woods developed the first sustainable forest management operation in the Amazon Precious Woods sold first carbon emission rights from reforestations
Precious Woods at a glance
Precious Woods is a world leader in the
sustainable management and use of
tropical forests. Based in Switzerland
with some 2 300 employees, our com-
pany has subsidiaries in Brazil, Costa
Rica, Gabon, Nicaragua, Holland and
Switzerland.
Sustainable management of existing
forests: In Brazil and Gabon we man-
age tropical forest in a sustainable and
low-impact manner, thereby ensuring
its long-term preservation. Precious
Woods Brazil is certified in accordance
with the criteria of FSC, in Gabon we
are in the process of a FSC-
certification.
Reforestations: In Central America we
reforest pastureland according to FSC
with a mosaic of teak and various in-
digenous species.
Timber industry and trading: Our prod-
ucts find applications in the construc-
tion, industrial, furniture, and do-it-
yourself sectors, with customers in
Europe, Brazil, Asia and the USA.
Renewable energy and carbon rights:
The use of waste wood to produce
energy and the sale of CO2 emission
rights are integral parts of our approach
to the sustainable management of
forests and the timber industry.
View of our company’s own bay in Garza, Costa Rica, in 1994.
Cautionary note on forward-looking statements: This brochure contains forward-looking statements that reflect Precious Woods current views
with respect to future events. These forward-looking statements are based on assumptions and involve risks and uncertainties with regard to
future global economic conditions, foreign exchange rates, regulatory rules, market conditions, environmental factors, the actions of competitors
and other factors. These risks and uncertainties could cause actual results to differ materially from those contained in the forward looking state-
ments. Precious Woods does not assume any obligation, to update information or forward-looking statements set forth in this document.
Vision and mission
Vision of Precious Woods
Through the sustainable management
of natural forests and plantations in the
Tropics and the marketing of the result-
ing products, Precious Woods wants to
contribute – as an economically suc-
cessful company – towards the perma-
nent preservation of tropical forests.
Mission
By managing forests in a sustainable
manner and marketing timber and
wood products, Precious Woods cre-
ates economic, social and ecological
added value in equal measure. By
developing and marketing non-timber
products – including carbon credits –
Precious Woods is also a force for
innovation, helping to expand the op-
portunities to create value from tropical
forests.
Economic added value: By utilizing a
natural resource – tropical timber – the
company generates sustained reve-
nues which provide it with financial
room for manoeuvre and guarantee
shareholders an appropriate return on
their investment.
Sustainability as our core business
Social added value: The production
and processing of the raw material
timber in developing countries creates
opportunities for employment and helps
to improve the socio-economic condi-
tions in these countries.
Ecological added value: By contributing
to the lasting protection of tropical
forests and preserving their value, Pre-
cious Woods also helps to preserve
biodiversity, the microclimate and im-
portant forest functions such as water
cycle regulation and carbon sequestra-
tion.
Global challenges
About half of the forest that was
present under modern climatic
conditions has disappeared, largely
through the impact of man’s activi-
ties. Deforestation, mainly through
conversion of forests to agricultural
land, continues at an alarmingly
high rate – and each year about 13
million hectares are lost. The net
forest loss in the period 2000-2005
is estimated at 7.3 million hectares
per year, an area about the size of
Sierra Leone or Panama (FAO
2005). Increasing concentrations of
atmospheric carbon dioxide result-
ing from human activity are respon-
sible for the climate change. Ap-
proximately 25% of the increase in
carbon emissions is due to defor-
estation.
The same view taken in 2004.
> 0.5 % Decrease per year
> 0.5 % Increase per year
Change rate below 0.5% per year
Sustainability
Economic
Social
Environmental
Africa and South America continued to have the largest net loss of forests
Reduced impact logging
Properly harvested trees hardly
damage the neighbouring trees or
young growth. Moreover, timber
losses due to logs splitting during
felling operations decrease. Finally,
competent logging means more
safety for the felling crews.
For all these reasons we apply so
called low-impact logging tech-
niques in Brazil. In this way, the
timber quality of the fallen trees is
preserved, the surrounding flora is
undamaged, the canopy remains
mostly undisturbed and nature is
able to close any gaps in a very
short time.
After the felling operations the logs
are winched by cable to the
nearest skid trail at 100 meter
intervals. The logs are then taken
to collection points by tractors and
skidders which remain on the trails
at all times. They are then picked
up by trucks. As a consequence,
the impact on the forest soil is
very low.
Operations
Brazil
PW Amazon began practising sustain-
able forest management on its own
land near Itacoatiara, 250 km east of
Manaus, in 1996. Since then, the
amount of land owned by the company
in this area has risen to 4 500 km2. PW
Pará was established in Belém in 2001.
PW Pará has acquired the possession
rights (“rights of use”) to manage 763
km2 of forest along the Rio Pacajá. The
forest is managed in a manner ap-
proximating nature, thus ensuring that
its biodiversity is preserved. In each 25-
year cycle only 3 to 6 trees per hectare
are harvested, i.e. fewer than simulta-
neously grow back. The timber har-
vested is processed into sawnwood,
planed goods, pilings and finished
products at the company’s own saw-
mills and manufacturing facilities, and
exported to Europe, the United States
and Asia.
Gabon
Precious Woods expanded to Gabon in
2007 and acquired majority interests in
the companies CEB and TGI which are
domiciled in Libreville. The two compa-
nies employ around 700 people in total.
CEB manages existing forest in Eastern
Gabon in a concession area of 600 000
hectares. Around 200 000 m3 of round-
wood are harvested annually. Since the
mid-nineties, CEB has a forest man-
agement plan, which guarantees that
no more wood is harvested than can
simultaneously grow back; it consti-
tutes important pioneering ecological
work within Central Africa’s forestry
industry. CEB operates a sawmill in the
forest concession and a small moulding
factory in Libreville. TGI operates a
veneer factory in Libreville.
CEB has been Keurhout certified for
many years. The Precious Woods
Group wants to secure FSC certifica-
tion for its new subsidiary in Gabon as
soon as possible.
Forest belonging to Precious Woods Brazil, four years after harvesting.
Teak lots planted in 1998 with excellent growth at the Peñas Blancas finca in Costa Rica.
Sales Precious Woods Brazil 2006
18%
71%
5% 5% 1%
Sawn timber
Industrialized products Piles Biomass Other
Area planted and profit Central America
0
1'000 2'000 3'000 4'000 5'000 6'000 7'000
97 98 99 00 01 02 03 04 05 06
USD '000
0
1'000 2'000 3'000 4'000 5'000 6'000 7'000
ha
Net Profit (USD '000) ha planted
Central America
Precious Woods has been planting
valuable species of timber on former
pastureland in northern Costa Rica
since 1990. First commercial thinnings
take place when the trees are between
8 and 14 years old. Final harvesting,
from which Precious Woods Central
America will derive its main revenue, is
scheduled for when the trees reach the
age range of 18 to 30 years. The har-
vested land will be replanted immedi-
ately. Precious Woods estimates that
income from the sale of timber from
these plantations will provide an annual
return of 10-11% across the whole
lifecycle of the capital invested. In 2003
Precious Woods began reforesting in
southern Nicaragua. To date Precious
Woods’ plantations in Central America
include 4 996 ha teak, 917 ha Pochote
and 320 ha of various indigenous spe-
cies, comprising over six million trees in
total.
Europe
Precious Woods Europe (PWEU) is the
biggest FSC tropical wood trader in
Europe. PWEU possesses technical
expertise regarding lesser-known spe-
cies of timber, timber drying and plan-
ning. The company has an extensive
customer base, ranging from small
timber merchants to medium and large
scale timber processing businesses,
do-it-yourself shops, garden centres,
construction firms and government
agencies. PWEU aims to selectively
target the most interesting customer
segments with higher value products
and to continuously increase the pro-
portion of total sales represented by
FSC-certified products. At present,
66% of the sales are from FSC certified
timber. PWEU aims to achieve a FSC-
rate higher than 90% within 2010.
Carbon and Energy
During the last years Precious Woods
has built up a significant amount of
know-how regarding the complex pro-
cedures of validating, registering and
verifying of carbon credits. The carbon
credits of Precious Woods originate
from reforestation activities in Costa
Rica (Carbon Financial Instruments,
CFI), from the reduction of methane
gas emissions of scrap wood and from
the replacement of diesel generators by
a woodchip-fired power plant (Certified
Emission Reductions, CER).
The 9 MWel power plant on the property
of Precious Woods Amazon has been
operating since 2002 and provides
electricity for the own sawmill and for
around 70’000 inhabitants of the city of
Itacoatiara. It is completely integrated
into the saw mill at Precious Woods
Amazon. The facility is unique in North-
ern Brazil and is recognized as a model
example.
Precious Woods Europe possesses a 20,000 m3 stock of sawn timber in Niewerbrug a/d Rijn, Holland.
The woodchip-fired power plant in Itacoatiara generates CO2 emission certificates and produces electricity
for around 70,000 inhabitants.
Sales Precious Woods Europe 2006
1%
3%
3%
10% 46%
4% 21%
9%
3%
Furniture Floors & stairs Industrialisation Contractors Trading
Construction Waterworks Doors & Windows
Other
Summary of the current CO2 projects (Production in tons CO2e)
Power plant Brazil Reforestation Costa Rica Reforestation Nicaragua Total tons
Until 2005 400 000 221 000 0 621 000
2006–2007 330 000 200 000 24 000 554 000
2008–2012 825 000 500 000 292 000 1 617 000
Total 1 555 000 921 000 316 000 2 792 000
FSC-Certification
FSC provides a truly independ-
ent, international and credible
labelling scheme on timber and
timber products
Certified according to the FSC
The Forest Stewardship Council (FSC)
is an international non-profit organisa-
tion. It was founded in 1993 to support
environmentally appropriate, socially
beneficial, and economically viable
management of the world's forests. Its
members are environmental and social
groups, indigenous peoples’ organiza-
tions and representatives of the timber
trade and the forestry profession. It
provides a truly independent, interna-
tional and credible labelling scheme on
timber and timber products.
In 1997 Precious Woods Amazon was
the first company in the Amazon to be
certified according to the criteria of the
FSC. In spring 2002 Precious Woods
Pará was also certified. Precious
Woods’ Costa Rican plantations were
first awarded the FSC certificate in
2000 and Nicaragua is expected to
achieve certification mid 2007.
Growing market for certified timber
Both business and government buyers
in Europe and North America have
been significant drivers of demand for
certified wood and paper. Businesses
concerned about the environmental,
social or economic impacts of their
forest product purchases often seek
out certified products as part of the
solution.
Wood is becoming increasingly recog-
nized as a renewable, recyclable, bio-
degradable and non-toxic material by
design professionals, and programs
such as the Green Building Initiative in
the US include certification as a crite-
rion.
The area certified by accredited certifi-
ers of the Forest Stewardship Council
(FSC) reaches 91.6 million ha in 2007
(in 2005 12.8% of certified forests were
tropical).
Rate of worldwide increase of FSC certified forest over time (Source: FSC)
Mosaic principle in Central America: Teak plantations in pre-existing vegetation.
Accurate planning and precise documentation are essential elements of sustainable forestry.
FSC-Area Costa Rica (1000 ha)
76.3
90.5%
8.0
9.5%
Other FSC-Area
Forest areaPrecious Woods
FSC-Area Brazil (1000 ha)
524.7
9.6%
4948.3
90.4%
Other FSC-Area
Forest area
Precious Woods
Expansion projects
Congo project
In 2007 Precious Woods acquired a
minority interest in the Liechtenstein-
based company Nordsüdtimber (NST).
With this step the Precious Woods
Group has laid the foundation for a
potential expansion into the Democratic
Republic of Congo (DRC). The NST
Group holds majority interests in four
large forestry companies in the DRC
and in several trading and service
companies in various European coun-
tries.
Precious Woods acquired its stake by
participating in a capital increase con-
ducted by the NST Group, thereby
providing the company with fresh
funds. The contract includes an option
for Precious Woods to substantially
increase its participation at a later date.
For Precious Woods, the investment in
NST secures medium and long-term
access to extensive, high-quality timber
resources. At the same time, Precious
Woods aims to play an active part in
the development of a sustainable for-
estry industry in the Congo Basin.
NST’s subsidiaries are already prepar-
ing their operations for certification
according to the criteria of the Forest
Stewardship Council (FSC) and Pre-
cious Woods will lend its support to this
process. The fresh capital provided by
Precious Woods is used to improve
NST’s logistics in the DRC and to ex-
pand processing capacity.
Drivers for expansion …
… from an economic point of
view:
- Growing market demand for
FSC certified wood
- Diversification in timber
species
- Geographical diversification
- Growing demand for carbon
reduction and sequestration
… from a social and ecological
point of view:
- Conserving tropical forests
- Creating jobs
- Building leadership in sus-
tainable forest management
in Africa
Wengé logs of high quality.
The forestry and timber industry creates jobs … … and a brighter economic future for the local population.
Precious Woods moves up the value chain
Forest
resource
base,
harvest
Primary
processing
Secondary
processing
Distribution
wholesale
Carbon
assets
Expansion of resource and processing base
1990 -
Plantations
and primary
forests
Non
timber
products
2005 -
Biggest
European
FSC-tropical
timber trader
2006 -
Renewable
energy and
carbon
credits
1996 -
Poles,
sawnwood
2000 -
Industrialized
products
Key figures
Precious Woods Holding Ltd.
Baarerstrasse 135
CH-6301 Zug
Phone +41 41 763 55 51
Fax +41 41 763 55 52
www.preciouswoods.com
Branch Office:
Militärstrasse 90
P.O. 2274
CH-8021 Zurich
Phone +41 44 245 80 10
Fax +41 44 245 80 12
Stock exchange listing
The shares of Precious Woods
Holding Ltd. have been traded on
the SWX Swiss Exchange since
18.3.2002.
Type of share: Registered Share
Nominal value: CHF 50.00
Security number: 1 328 336
ISIN: CH0013283368
Ticker symbol: PRWN
Reuters: PRWZn.S
Share performance (3.1.2006 - 30.5.2007)
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CHF
Precious Woods registered share SPI adjusted
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