Triple Bottom Line & The Patagonia

We continue to diligently work towards building upon our triple-bottom line culture and company.  This sustainable business model consists of three main components:

  1. Profit
  2. People
  3. Planet

While achieving any real Profits has been difficult for all of us over the last 3-5 years, Windsor Mill has certainly continued its commitment to People and Planet.  Two recent examples:

  • People: after the Chile quake, we invested significantly in helping to rebuild damaged and destroyed homes in local communities;
  • Planet: all WindsorONE fiber is either FSC-certified (over 70%), or from an FSC-controlled source.

We are clearly committed to environmentally sound supply-sourcing and manufacturing techniques. 

For some time now we have been aware of an international controversy regarding plans to dam rare river ecosystems in the Chilean Patagonia.  We are concerned that the Patagonia dam controversy would conflict with our environmental commitment and somehow be linked to our brand and products.

Therefore, as we buy raw material in Chile, we will endeavor to reduce material linked to the Patagonia dam controversy and to source more from MASISA, and other FSC-certified suppliers (& controlled sources).

For those interested in the sustainable Triple-Bottom-Line business model, this is a very simple image explaining the concept:

Arauco Sawmill Reopens

Take note of where the fiber will be going…

[article/pic taken from Lignum al Dia, a Chilean online publication]

“With the presence of Seremi Labour, local authorities and company executives, this morning was made the official reopening of the Sawmill Horcones Arauco II.

Through a tour of the facilities, it marked the official resumption of operations of the sawmill, located in the Forestry Industrial Complex Horcones, located in the town of Arauco.

The reactivation of the Arauco Mill Horcones II has meant hiring 165 workers. The resumption of operations of the industrial facility is a contribution to the creation of stable employment in an area particularly hard hit by the earthquake and tsunami on 27th February.

This production unit was closed since December last year, resulting from the crisis affecting the sector. When you restart operation, it hired 120 employees in the operation, mostly from the province of Arauco, Arauco communes and Curanilahue, and 45 persons from casino personnel, porters and guards.

The monthly production capacity Horcones II regime will be 14,500 m3 of green wood, and the main destinations of its output will be the domestic market, the Middle East, Asia and Central America.

Thus, of the 35 facilities Arauco who were detained since the earthquake, or in the case of Sawmill Horcones II from before, 34 and are operating normally.  It remains to Line 2 of the Pulp Mill Horcones, in which case it is not yet possible to specify the date on which restarted production.”

Another Chile Quake…

Not too much damage done, and none to our ForAction plant… 

USA Today Report

ForAction team reported back safely to us today, including our stateside team (Ruben and Jerry) that are in Chile now, working with Marcelo (GM), to finish updating components of our primary & secondary automated wood processing equipment.

USA Today Report was sent to me via www.ThomasontheBoard.com – cool concept.  It’s worth a click…  Let Your Builders Be Known.

In Solidarity,

Craig

Chilean Port Status, 4/26

Our ForAction team in Chile is reporting the following:

“The actual situation of the port is:

– San Vicente , working to 100%

– Lirquen, working to 100%

– Coronel, working to 100%”

Great to hear that things are back to 100% at all three ports…

Chile: Rebuilding The Country, an Update

Chile’s government shared it would take the country up to four years to recover from the earthquake.  Chile’s new President Sebastian Pinera is in charge of the country’s earthquake recovery work, and has prepared an emergency bill and a reconstruction law.  Pinera has estimated reconstruction will cost approximately 30 billion dollars and plans to build thousands of makeshift houses and tents, and dozens of hospitals to accommodate affected regions. Damaged roads, bridges, ports, airports, and other infrastructure are also in the process of being repaired.  Swiss Re, the world’s second largest reinsurer, has estimated that the earthquake in Chile may cost insurance companies an additional 7 billion dollars.

The reconstruction program will be implemented in three phases.  The first, called the emergency reconstruction period, has ended in late March (took 30 days to complete).  The second, the winter reconstruction period, will primarily be for the re-settlement and heating for the affected people during winter time.  The final phase will focus on reconstruction throughout the country, and is expected to last four years.  According to Chile’s Interior Minister, these costs will be covered via five financial sources: fiscal austerity, state savings, donation from private sectors, public bonds, and tax adjustment for big companies.

Arauco Producing…

Good news for the industry, Arauco has resumed operations at many facilities.  The below message is from Mark Young of Arauco (Atlanta Offices), March 17th:

“Beginning this week, Arauco has resumed the operation of the following industrial facilities:

Sawmills: Of the seven sawmills that will operate in Chile, five are operating – Valdivia, El Cruce, Vinales, Nueva Aldea and Cholguán.

Remanufacturing Plants: Of the five remanufacturing plants, four are operating – Vinales, Valdivia and 2 in Cholguán.

Panels Plants: Of the four, two have initiated their operations:  Trupán has begun a line of MDF, and Nueva Aldea has started up two lines of plywood.

The Arauco energy plant in Nueva Aldea has initiated its operations, and is producing electrical power for the grid  – Sistema Interconectado Central (SIC).   The Arauco Valdivia energy plant is operating providing electrical power for the grid as well

Pulp: The five pulp plants continue the process of accessing damages and are working to standardize their operations for start up.

Ports:  Activity has begun in the ports. San Vicente is loading containers, Lirquen has loaded a Break Bulk Vessel for Mexico and the port of Coronel is preparing a container vessel to be loaded beginning on March 20th.

Arauco continues to support the numerous relief efforts to aid its employees and their families, as well as the affected communities.

In a joint effort with the communities, machinery was made available to clear the streets and highways and to provide basic services. Additionally,  land was donated for the temporary installation of one thousand emergency homes.

As the surrounding communities, our employees and their families work to resume their daily lives, the company will now focus on the remaining industrial sites which will mainly consist of debris removal and cleaning and repairing the affected production facilities to get them back on their feet.

Please visit  http://www.arauco.cl for additional updates.”

Insights into Infrastructure, Pricing

We reported on 3/10 that infrastructure and roads to ports from our Foraction plant had been damaged; and that luckily we had found a work-around, albeit 4-times as long, which would increase inland freight rates and cost of fiber.  The good news today is that our normal routes have been repaired (or are being repaired), and WindsorONE products will no longer incur the additional freight cost.

There are still many factors, however, that could increase the cost of our products; we’re gathering as much information as possible now, to see exactly if, how or when our cost structure might be impacted.  We should be able to provide more Insights into pricing come Monday of next week.