Existing institutional investor Lombard Odier Asset Management is to inject a further £2mln into forestry and timber trader Obtala Limited (LON:OBT).
Proceeds are earmarked for immediate capex at its facilities in Gabon including upgrading 2 heavy-duty vertical bandsaws in the sawmill and the installation of a plywood manufacturing line within the veneer factory.
Paul Dolan, chief executive, said the investment in two new bandsaws would improve recovery rates by up to 20%, with an expected corresponding impact on gross profit margins.
The installation will take place in the third quarter of 2019.
The plywood line will also boost margins he said as composite veneer sheets can be created and incorporated within plywood boards from the material that is currently sold at a discount to standard sized veneer sheets.
“Serving the fast-growing market for construction plywood in Africa is a natural extension to our business,” said Dolan.