Sustainable Forest Holdings says it will consider selling its logging rights to clear forests in the controversial Santo Antonio hydroelectric power plant project in Brazil following labour disputes.
The Hong Kong-listed timber firm, which owns forests and logging rights in Brazil and Russia, previously estimated it would book a gross profit of HK$135 million from the project, which has attracted criticism from local and international environmental and human rights organisations.
Brazil wants to build its second largest hydroelectric facility there. However, the work site was occupied by the military last year after thousands of workers went on strike over poor work conditions, according to press reports.
Construction of the plant has stopped for months.
Sandy Fletcher, the chief financial officer of Sustainable Forest, said that while the strikes were over, the operating schedule had been affected.
As a prudent measure, Fletcher said the company had written off some inventory to reflect the impact.
The firm has a five-year contract to clear 200,000 hectares of forest for the power plant's artificial lake and plant sites. Fletcher said the contract could be transferred to third parties.