MEXICO - Proteak, the largest forestry company in Mexico reported that sales of its MDF and Teak businesses reached MXN 284MM in the fourth quarter of 2019 (4Q19), excluding other income and revaluation of plantations, this result is 9% lower against 4Q18.

In the MDF business, sales decreased 6% vs. 4Q18, however, in the 2019 annual result, growth of 10% vs. 2018 was obtained. The quarterly decrease in sales is due to lower volume and price pressure on raw MDF throughout the year. Even so, these decreases are partially offset by the improvement in value-added MDF sales.

In accordance with the company’s strategy focused on the growth of value-added products, in 2019 an increase of 77% in total sales volume was obtained in this category against 2018. The quarter closed with sales of MXN 266MM, and a volume of 48.2M m3, 8% less than 3Q19 and 9% less vs 4Q18.

In 4Q19, the percentage of melamine sales was 17% in Mexico, with an increase of 89% against 4Q18. According to the strategy, exports to the United States decrease, reaching 9% of the total volume.

In 4Q19 total revenues decreased 5% vs. 4Q18, however, at the end of 2019 revenues grew 9% compared to 2018. The decrease in total sales is due to the fact that in the last quarter there was a slowdown in aggregate demand in Proteak's business sectors, mainly generated by the economic situation and the contraction of the construction sector in Mexico. Furthermore, in the global market, the pressure on prices continues and the increase in imports, mainly from Brazil.

Tecnotabla maintains a solid total market share with 21%, ranking second, after the integration of Arauco with Masisa, which combined became leaders in the sector. It is important to highlight that, in the value added boards segment, participation improved considerably, reaching 26% vs. 17% in 2018.