We Make Forestry Matter

Proteak

8. Decent Work and Economic Growth 12. Responsible Consumption and Production 13. Climate Action 15. Life on Land 17. Partnerships for the Goals

Overview

The innovation developed by Proteak is a model of vertical integration in the production of wood, going from tree plantation to the board manufacturing process. The company develops forests where there is none. Proteak broke the traditional wood extraction model and managed to raise long term funds from investors to develop profitable and sustainable woods in the southeast of Mexico, a region facing an unprecedented social and economic crisis.

Authors

Luis Evaristo Hinojosa Robles

Luis Evaristo Hinojosa Robles

Ricardo Ramirez Corona

Ricardo Ramirez Corona

Maribel Galindo

Maribel Galindo

Miguel Angel Naranjo Carmona

Miguel Angel Naranjo Carmona

School

EGADE Business School Tecnologico de Monterrey

EGADE Business School Tecnologico de Monterrey

Professor

Christiane Molina

Christiane Molina

Innovation

The strategy behind this innovative business model is focused on growing forests that serve as a sustained source of wood and reduce the deficit of the forestry sector. Commercial forest plantations are long term projects (20 years for Teak and 5 years for Eucalyptus) therefore the relationship with the communities is fundamental and critical for the company, as well as is environmental protection. Proteak aims for the development of the communities where it has a presence and seeks to preserve and care for the flora and fauna where the company establishes its plantations.

We Make Forestry Matter

Inspiration

In 2002, Hector Bonilla (founder) made a trip to Tabasco state and saw a small plantation, as a result he began to investigate and wondered why Mexico was not a major forestry producer if it had all the natural resources for that sector to grow. That is how, together with family and friends, Hector started a fund to grow Teak plantations in Nayarit. Over the years, he understood the forestry sector deeply and the potential of Tabasco state so he decided to change to a more ambitious project looking for institutional investment (mainly Long Term Funds). It was a challenging process, but in 2010 he made an IPO in the Mexican Stock Exchange and that is how he started to develop the forestry industry in Tabasco.

As his operations increased, he became more and more involved with local communities and realized how important it is to have an inclusive business model. Therefore, he began to develop a business model that was financially, socially and environmentally sustainable. The pillars of Proteak are:

1. Commitment to communities and long-term environment.

2. Development and improvement of life quality in the communities.

3. It will promote the economic development of the communities through the small producers program, promoted by CONAFOR, the State Government and the company.

4. Protection and preservation of Flora and Fauna.

Overall impact

The business model has impacted thousands of families both directly and indirectly in Tabasco State over these 21 years creating direct employment to more than 800 families, trained and generated growth within the company, constantly supporting communities with the rural school program, also a talent development program with some local universities.

It has promoted the fair employer program, also developed and promoted the small producer program with support from CONAFOR and the State Government. Small producers learn how to work with plantations in obsolete land and subsequently Proteak buys them the wood, promoting the local economy.

Business benefit

Proteak business model has allowed it to grow and have a sustained presence in Tabasco state.

The industrial business unit is very dynamic, every year Eucalyptus are harvested and planted to produce Medium Fiber Density (MDF ) board for the national market. Teak plantations are long term and for international market, exporting mainly to Asia.

More than 8,000 hectares of Teak planted all with FSC® certification. Proteak has a competitive advantage in the Asian market by having certified plantations.

More than 7,000 hectares of Eucalyptus planted all with FSC® certification. Proteak has the only MDF board plant in Mexico that supplies certified commercial forest plantations. This business model has allowed it to substitute imports of MDF Board in Mexico and be the second player in the market despite only having been operating for 3 years in Mexico.

Social and environmental benefit

One of the points in which Proteak has environmental impact is in the reduction of greenhouse gases affecting the climate change by generating 245,000 Verified Carbon Units (VCU), covering 4,000 hectares of teak plantations.

Another point is to promote the preservation of biodiversity in its forests. Currently, Proteak has over 3,800 hectares of conservation areas in Costa Rica and Mexico, and more than 400 hectares of High Value Conservation Forests. These areas are a shelter for endangered species and the surrounding planted areas serve as transition forests in which the species can move from one forest to the next one without being at risk.

Socially, Proteak has had a great impact in the communities where it operates. It runs Rural School Programs in which it delivers infrastructure improvements to rural schools and provides them with teaching materials. Proteak has also created an agreement with universities in order to support the development of young students, opening its doors for them to do internships within

Proteak has helped the communities in many other ways, for example diversifying the economy of communities that were totally dependent on the petroleum industry. 29 small land owners have joined programs to become producers of wood and providers of Proteak with formal contracts. Currently these programs have impacted over 1,100 hectares planted.

For the employees, Proteak offers a formal contract, adhesion to banks in the payroll and Social Insurance, besides taking care of its employees by ensuring proper work and safety conditions, in some cases even transporting them from the work place to the communities.

Interview

Kristina Diaz Paterson, Forestry matter

Photo of interviewee

Keep this story going! Share below!

Proteak

Proteak

Mexico City, Mexico City, MX

Business Website: http://www.proteak.com/index.php/es/

Year Founded: 2000

Number of Employees: 501 to 1000

Proteak, which is listed on the Mexican Stock Exchange (BMV), is a company that breaks the traditional business model. In 2016 the Expansion magazine defined Proteak as an example of a disruptive initiative that created a new business in an industry with no tradition in the country.

Proteak’s mission is to create a forest where nothing exists. The business model considers to establish Teak and Eucalyptus plantations on lands that were previously transformed by the primary industry (agriculture and livestock), always protecting the flora and fauna found within the land. The company promotes sustainable forestry practices that benefit the environment and also the society around them, with the objective that commercial forest plantations become a sustainable alternative to wood extracted from natural forests.