All data are collected in the Fiscal Year of 2008-2009.

DRC / Manufacturing

The group is one of the world’s biggest producers of hardwood veneers as well as one of the biggest international traders in tropical roundwood, sliced wood and veneers. The Danzer Group has its origins in 1932, when Karl Danzer founded his first veneer trading company in Paris. After the Second World War, Danzer started to build an industrial veneer empire, opening his own veneer mill in Reutlingen, Germany in 1949. From these early years, Danzer combined the production of tropical veneers with the operation of his own logging concessions in Africa. Since its foundation, the Danzer Group has always been led by a member of the German Danzer family. Since 1962, Danzer Group’s international trade in tropical timber has also been based in Switzerland, through Interholco AG.

Interholco’s main procurement area is Africa, and it buys from other group companies such as Société Industrielle et Forestière du Congo (SIFORCO) in the DRC, as well as from numerous third party suppliers. Danzer Group subsidiary SIFORCO was founded in 1976 as a joint venture between the Danzer Group and the German governmental development agency DEG (Deutsche Investitions-und Entwicklungsgesellschaft). SIFORCO operates one sawmill and one veneer factory and owns 4.7 million acres (1.9 million hectares) of forest concessions. Approximately 131,000 cubic yards (100,000 cubic meters) of wood are processed every year. About two-thirds of this is earmarked for veneer and lumber production; the rest is exported as round wood.

Greenpeace International accused the group of declaring losses in its local subsidiary to avoid being taxed while at the same time transferring immense amounts of cash into its offshore accounts. The Greenpeace Report is based on a Danzer's internal documents. It offers evidence to show that Danzer has been falsifying its accounts since the late 1990s. It also appears from the report that officials in the three subsidiaries have been going to great pains to hide the true nature of their operations.

The Danzer Group denies the accusations. The company says it pays taxes and invests 3 million euros ($4.5 million) annually in both DRC and Congo-Brazzaville. The company also says that Greenpeace had filed cases in Switzerland against it in 2004 and 2006 but the charges were dropped by the Swiss Attorney General's Office.

SIFORCO passed the legality review of its nine forest concessions. The Swiss auditing firm Société Générale de Surveillance (SGS) granted a Legality of Production certificate, which confirms that all timber from SIFORCO concessions is of legal origin. At the same time, Ernst & Young commissioned by Danzer Group with an independent review has confirmed that SIFORCO in the past has operated in conformity with the local laws concerning export prices and the taxation of salaries. Furthermore, Ernst & Young confirmed in its statement that the company has not gained from tax incentives on investments, which were not realized.

SGS also verified that taxes and social contributions have been paid by SIFORCO and that all required licenses and documentation are properly obtained and managed. In addition, the SGS-TLTV Chain of Custody certificate from SIFORCO assures the traceability of logs from the forest to the harbour of export. The successfully completed audit is an important step towards the certification of sustainable forest management in SIFORCO’s concessions.

Société Industrielle et Forestière du Congo, B.P. 8434, Kinshasa I, DRC:
Telephone: +243-88-46910
Telefax: +243-88-03019

Danzer Group is a wood processing company specializing in the manufacture of veneer and sawn timber from high-quality hardwoods. Danzer veneer is used as a decorative wooden surface in a wide variety of applications. The product serves the furniture, door, automotive, boat and aircraft industries, and is used for interior decoration. Danzer lumber is used primarily to create natural and exclusive designs for interiors and furniture. In addition, the company is involved in the timber trade and in forest management.

Danzer Group employs a workforce of 4,700 staff of which 1,200 are employed in the DRC.

Annual sales of over € 500 million

In the DRC, 75 per cent of timber exports are controlled by four foreign companies-Danzer Group (which accounts for 40 percent), NST Group of Portugal, Olam of India and the Lebanese company, Trans-M.

Danzer Group’s goal is to manage its forests well and sustainably to secure a long-term supply of high-quality wood.

Sector-specific marketing: Danzer’s customers come from many different sectors and branches of industry. To meet different requirements, the company focuses on expanding its product range, fine tuning its approach to sales and developing solutions tailored to customers’ specific needs.

Focus on sustainable growth: The Company acts independent from outside stakeholders and is not impacted by the volatility of the financial markets. Danzer Group is a family-oriented company with horizontal hierarchies. At the same time it maintains a close relationship with employees and customers. The company believes that as a result it is able to take speedy decisions which facilitate correct decision making which in its turn assit in growing the company’s assets and revenue.

Quality manufacturing: Through regular investments in the latest technologies the company continually develop new processes and manufacturing procedures in order to improve the quality of products and services.

SIFORCO is wholly owned by the Danzer Group. The Danzer Group is 100% owned by private German shareholders. Interholco is a wholly owned subsidiary of Danzer Group.

The DRC government which place a moratorium on the award of logging licences in 2002, completed its legal review of logging companies in 2009. An Inter-Ministerial Commission, which has been evaluating the reviews of companies carried out by a government appointed Technical Working Group, has decided that Danzer will retain its concessions.

With regard to conservation, the Department of the Environment, Nature Conservation and Tourism manages protected areas and is also in charge of the National Institute for Nature Conservation.

In August 2002, a new Forest Code was adopted by the Interim Government of DRC. The Code sets out the basic ‘framework’ for the DRC Government’s forest policy, such as that the government continues to assert state ownership over all areas of forest.

The code replaces the previous legislation dated 1949. It introduces major innovations in DRC including: protected areas are to cover 15 percent of the national territory; mandatory implementation of forest management plans; public auctioning of forest concessions with the distribution of 40% of the resulting receipts to decentralized entities; rights for local communities to directly manage their own forest concessions; and the setting up of Forest Consultative Councils at national and provincial levels. Detailed regulations are still to be defined.

The new Forest Code establishes that 40 percent of the tax revenues from legal logging will go directly to local authorities in order for the local population to share in the benefits of forestry activities. In addition, forest communities are expected to obtain additional benefits through formal contracts with the central government and forest companies. Benefits will include investments such as dispensaries, schools, and feeder roads.

In addition, the code provides for the preservation of the customary rights of local communities in the framework of any concession contract with logging companies, as well as consultation with local communities as a mandatory step for all procedures leading to the designation of forest areas.

The company has introduced its Procurement Rules for African Timber, comprising questionnaires for suppliers, legal documentation requirements, second- and third-party field audits of suppliers and other measures. This system has been developed in consultation with SGS. For the implementation and management of this system within the Group, an independent function has been created which also control compliance in all Group companies active in African wood species. A binding time schedule has been set up to establish targets related to improved sustainability for own concessions, as well as the sustainability and legality of third-party suppliers.

The next stage in the process is for SIFORCO to draw up comprehensive forest management plans for its concessions in accordance with ISO 14001:2004 which is scheduled for the end of 2009. Danzer Group and WWF intend to cooperate in setting up the management plans for SIFORCO.