Luminor Bank has provided EUR 1.5 million of financing to the logging and wood processing company SIA Krauzers for developing a new sawmill and adjacent territory. The Company forecasts that improvements in the timber processing process will facilitate doubling the production in the future. 

The construction of a new sawmill and development of the adjacent infrastructure has been taking place since 2019, and the project completion is planned for 2022. So far, EUR 2.5 million have been invested in the project where EUR 1.5 million is funded by Luminor and EUR 1 million is the Company’s own resources. In the next year, it is planned to invest EUR 3.5 million more in the project.

The sawmill upgrading is carried out in several stages. The acquisition and improvement of production buildings has already been completed, the packaging line consisting of a chisel for sawn timber and sawmill equipment has been received. At the same time, the work is under way to establish a wood sorting line for which the Luminor funding is being used. In the final stage of the project, it is planned to purchase and install new sawing lines at the plant.

“2020 has been a contrasting year for the logging and wood processing industry, however we are pleased that the implementation of the development plans started by our customers has not been put on hold. We are happy to get involved and help entrepreneurs in the implementation of such large-scale long-term projects carried out gradually. Development strategy chosen by Krauzers, implementing the project sequentially and starting work on the next phase only after completion of the preceding one indicates good planning and risk assessment.  It is also positive that the Company found sales channels and potential customers before making the investment”

– says Ilze Zoltnere, Head of Luminor Corporate Department in Latvia.

In addition to the production of garden and fence elements, industrial packaging materials, split and packed firewood, SIA Krauzers is engaged in logging, sale and transportation of logs, production and sale of wood chips. The Company has gained over 15 years experience in the forest industry. In 2020, the turnover of SIA Krauzers reached EUR 17 million, and the Company currently employs about 200 people.

“The new sawmill and creation of the adjacent infrastructure corresponding to the needs of the plant is a strategic and important step for the developing our Company. Currently, we sell about 4.5 thousand finished products per month, and next year, when the project is completed, the volume of finished products could reach seven thousand cubic meters. This will help meeting the growing market demand for construction materials. Thanks to the funding provided by Luminor, we are confident that we will be able to continue operating at full capacity in the future, while giving a positive contribution to the Latvian economy,”

– points out Andis Araks, Chairman of Board.