80% OF PRODUCTION EXPORTED

Ecuador 2020 | INDUSTRY | VIP INTERVIEW

TBY talks to Ignacio Bustamante, General Manager of Novopan, on wood exports, social responsibility, and new trade policies in Ecuador.

What role has Novopan played in developing the wood exporting industry in Ecuador?

The wood industry in Ecuador is old, and Novopan has played a vital role in the market since the company started in 1979. We represent about 50% of Ecuador's panel wood exports. Novopan's history is slightly different from that of other regional companies because it started as a company focused on exporting. Between 1979 and 1982, we saw an impressive expansion of the industry with regular exports to Colombia and Venezuela. From 1982-1992, our export activity fell, as some countries started to limit imports. This period taught us to adapt to the circumstances. We started finding opportunities in the local market and eventually made two investments to improve quality of our product. We reached our highest production level of 30,000cbm a year in 2007, and since then have been growing. We moved to a different place in Quito that was better connected, and we installed a plant with a capacity of 300,000cbm. Currently, Ecuador offers interesting opportunities, as the country is adopting a more business-friendly approach. In 2019, we inaugurated a new plant taking advantage of the country's new regulation for investments. Our production capacity is now at 600,000cbm, and we employ 500 workers, with each direct worker creating on average 10 additional indirect jobs.

How does Novopan ensure its economic activity is in line with socially responsible practices?

The wood industry in the country has taken decisive steps to guarantee that its activity is sustainable in the long-term economically, socially, and environmentally. 60% of the wood we use comes from planted forests, while 40% is recycled wood. We receive up to 15,000 tons of recycled waste that before used to be a problem for communities. All the collection of these recycled wood is done through small entrepreneurs who started supplying these materials to us 20 years ago. We have more than 200 people working in the business of supplying recycled wood for us. When they started, they had old vehicles, and now each has brand-new trucks to collect the waste that they sell to us. In addition, we are one of the few industries that have a carbon-neutral effect. Any company that wants to look at 2030 and 2040 must not forget the social and environmental areas. For Novopan, that is clear; even the dust generated through our daily operations is used as fuel. We sell our products in Ecuador exclusively through our own franchise Novocentro, which has more than 50 stores across Ecuador. Families are our target profile for our franchisees. As a result, this has had a social impact across the country.

How is Ecuador's new trade policy expected to impact the wood industry and its export activity?

The wood board industry needs economies of scale, and Ecuador has a 16-million population; therefore, it is difficult to build economies of scale in a small country. Thus, we are competing globally. Novopan exports 80% of its production, and we compete with Colombia, Peru, Ecuador, Brazil, Bolivia, USA and Central America, among many others. Any step taken to facilitate trade with our neighbors is welcome by the sector, such as the case of Ecuador joining the Pacific Alliance. Our market is the American continent, so any further integration in the region can be beneficial. This will be one of Novopan's priorities in the short term: reaching out to new markets in an orderly fashion.