Developing a sustainable wood products industry in rural Costa Rica


Nandayure, Guanacaste, Costa Rica

About the project:

After decades of unsustainable timber harvesting, the tropical semi-humid and dry forests along Costa Rica's Pacific coast were exhausted by the 1970s. With no trees left, timber companies fled the country's Guanacaste region, taking jobs and economic opportunity with them. Now, after decades of planting trees to restore land, Initiative 20x20 partner Forestry and Climate Change Fund (FCCF) is working with local entrepreneur Nestor Baltodano and his two companies to sustainably manage 400 hectares of new secondary forests and create a thriving rural wood products economy.

To ensure that the supply of wood products continues for decades, Operaciones Forestales Sostenibles (OFS), one of Baltodano's companies, provides the necessary expertise to conserve the region's secondary forests. OFS works with local landowners by helping them sustainably manage, harvest, and sell their trees, lightening the burden on farmers by marketing their products for them. By sharing their profit with landowners, OFS has also built trust with local leaders.

As part of its mission, the company is also protecting and restoring trees around the Guanacaste Dry Forest Conservation Area, home to 2.4% of the world’s total terrestrial biodiversity. By managing the land well, OFS is also reducing risk from forest fires, which are common in dry forests, and protecting local communities.

Now that OFS has acquired the timber from landowners, what happens next? Here is where BluWood, Baltodano's other company, comes in.

BluWood takes that timber and produces solid and engineered wood flooring, decking and other high-end products for local and export markets for local and international markets, employing people living in nearby communities and building a rural manufacturing economy in Guanacaste. The company is currently exploring where it can expand to sell its legally and sustainably sourced wood. Buyers have a fully traceable supply chain, and local people benefit.

By working together, OFS and BluWood have pioneered a fair sourcing policy that ensures that forest owners receive an adequate price for their timber. The companies have larger ambitions, too. They plan to expand their own operations to 4,000 hectares in the next two to three years are also hoping to host other wood products companies in their underused facility to nurture this nascent industry. By keeping all stages of production from tree planting to finished products in the region, the two companies are creating a restoration economy that boosts incomes in this struggling region and harnesses the economic value of forests without destroying them.

Investment type

Project Overiew | Operaciones Forestales Sostenibles & BluWood Industries SA




$2 million, more forthcoming

Media contact:

Carla Navarro Díaz, Associate, Luxembourg Microfinance and Development Fund,