In an interview for the STA Slovenian Press Agency, Alex Brownlie, Chairman of the BSW SI Board of Directors, spoke about the progress of the investment into a Slovenian wood processing centre. BSW Timber expects to have all permits for the construction of a €41m facility in Gomilsko in the coming months and to launch production in 2020 as scheduled.

Mr Brownlie stressed that the postponement of construction, planned for September, was a result of administrative procedures, but he noted that a public examinsation of the spatial plan is underway.

“We will need a detailed spatial plan and a building permit, and we need to know what will be in the facilities so that we can properly design them,” he said.

May 2020 as the target for the first log to be cut and pellet facility in Šoštanj is scheduled to follow a month later.

BSW is to secure the €41m via an equity mixture that includes the company’s own funds, an already-approved loan by the Royal Bank of Scotland, and loans from Slovenia.

Mr Brownlie said that BSW intends to be “an active participant in the economy of Slovenia” and he echoed the points made by Economy Minister Zdravko Počivalšek, who believes each industry needs small, medium-sized and large companies to be successful.

Processes will be put in place to ensure BSW buys raw products from existing Slovenian sawmills, adds value to them and then sends them to the international market, where BSW has a strong presence.

Mr Brownlie also pointed to Slovenia’s wood processing industry strategy from 2012, which envisaged three large, modern sawmills, and said he that BSW was already engaged with sawmills around the county.

He understood the concerns of smaller mills but noted that “an appropriately scaled industry that can flex” and “keep the value here in Slovenia” – and he highlighted the inability of the current industry to react to the December 2017 windthrow.

As to why BSW picked Slovenia, Mr Brownlie spoke of the country’s geostrategic position, the strong in-country logistics, a long history of sustainable forest management, and its eurozone membership.

Asked about the new ruling coalition’s plans to increase capital gains taxation, he said that BSW was following the developments but that “something of that nature is for the country to decide”.

He added: “We’re encouraged by the overall business climate in Slovenia which is very positive to business and commerce. Taxes will evolve over time as they do in all countries. We’re relaxed about that; we’ve been at this for long time and have seen lots of different tax regimes.”

Reiterating that BSW is in Slovenia for the long-term, Mr Brownlie stressed that BSW is also interested in working with other Slovenian businesses, “particularly around the construction sector”.

Existing companies in the country involved in wood products “need security of supply, which gives them confidence to invest in developing their products and expanding their product range”, he said.

Commenting on BSW’s business results, Brownlie said “the picture has improved” after three difficult years, with the sector, cyclical in nature, having gone “through some tough times globally”.

The industry is resurging as the economies around the world are picking up and, while Brexit is creating some uncertainty, “overall the economy in the UK is strong and has a good degree of resilience”.

Mr Brownlie also feels that the general outlook for the wood processing industry is very good and he noted that Slovenia has a strong hand to play due to its large quantities of quality timber and its knowledge of how to manage it sustainably.