ELB Timbers had lost M$2.4m in the six months to December 2006, due to big log price increases.

The division relied on logs, which are 130% more expensive compared to three years ago, to make veneer for plywood and furniture component production.

It said further log price hikes of about 30% were predicted in the coming months, which would not enable it to trade profitably enough.

ELB Group said shut down costs amounted to about M$16m.