Purchase contracts for plant in Concordia and sales structure signed on 17 July 2017
By acquiring the Masisa plant in Concordia, Argentina from Chilean company Masisa S.A., wood-based material manufacturer EGGER secures a production site outside of Europe for the very first time. Headquartered in St. Johann in Tirol, Austria, the company is consistently pursuing its strategy of continuing to grow on its own terms and to make itself future-proof through increasing internationalisation.
With a market share of 35%, Masisa is the number 2 in Argentina, with Masisa Argentina posting turnover of USD 131 million in 2016. The plant in Concordia has facilities for the production and lamination of chipboard and MDF boards. In 2016, it recorded production capacities of 165,000 m3 chipboard, 280,000 m3 MDF boards and 274,000 m3 lamination. An enterprise value of USD 155 million has been agreed for Masisa Argentina’s business. Masisa Argentina’s forestry activities are not to be taken over by EGGER, but a long-term wood supply partnership has been agreed.
“We are certain that it is an opportune time to invest in South America,” explains Thomas Leissing, spokesman of the EGGER Group Management, “Because Argentina is just coming out of its worst economic downturn, and following recent political developments, there is plenty of reason to hope that the economy will continue on its course to recovery.”
The goal: to become a major player in the South American market
For EGGER, owning a production site in the growth markets of South America is vital for tapping into the local market potential. The goal is to become a major player in the South American market. Though the wood-based material manufacturer has already had a sales office in Chile since 2012 and made its first forays into the South American market, EGGER recognises that without its own production capacities it would always have remained limited to a small niche.
Thanks to sharing a similar corporate philosophy and strategy, Masisa Argentina and the EGGER Group are a great match. Masisa enjoys broad market access through its distribution channels in DIY, distributors and industry. Masisa uses pull marketing techniques and social media activities to communicate with its customers, and it also has an established customer loyalty programme – Red M – which boasts some 9,500 members.
Alongside the plant and its distribution, EGGER will also go on to take over the established Masisa Placacentro Argentinian dealer network, which is independently run by 42 partners.
With the closing of the transaction EGGER will take over all 500 Masisa Argentina employees. “We are looking forward to welcoming the new, qualified and dedicated colleagues who will support us in our further growth in South America, and who will gain clear opportunities for their future through this takeover,” explains Leissing.
With an annual turnover of USD 960 million in 2016, Masisa is one of the leading manufacturers and distributors of wood-based products in Latin America. Listed on the stock exchange of Santiago de Chile and employing some 9000 employees, the company has 10 production sites for chipboard and MDF boards in Chile, Argentina, Brazil, Venezuela and Mexico, a franchise-esque distribution network with 332 retails stores (Placacentro) and a forest enterprise with 246 thousand hectares of useful woodland.
The family company founded in 1961 employs approximately 8,000 people. At 17 plants across Europe, they produce an extensive product range of wood-based materials (chipboard, OSB and MDF board) as well as timber. The company generated a turnover of EUR 2.34 billion in the 2015/2016 financial year. EGGER has global customers in the furniture industry, wood construction and flooring retailers, as well as DIY markets. EGGER is a full-range supplier for the furniture and interior design industry, for wood construction, as well as wood-based flooring (laminate, cork and design flooring) industries.
Takeover of Masisa Concordia, Argentina
|→ Internationalisation in line with the EGGER Group’s strategy→ Securing the future through market diversification and new application opportunities for European plants
→ Goal: become a major market player in South America
|→Masisa has a 35% market share and the number 2 place in the Argentinian market→The Concordia plant has a capacity of 165,000 m3 chipboard, 280,000 m3 of MDF boards and 274,000 m3 lamination.
→All 500 Masisa employees will be transferred upon the closing date.