Although quebracho wood is absolutely impervious to rot, and may thus be used in building, for piles, quays, sleepers, etc., it is exploited more especially for the production of tannin, as more profit is made by so treating it. A sleeper requires a good-sized log, considerable time, and much labour, to say nothing of the loss of wood; while the quebracho extract may be obtained from logs of any size. To-day the value of a sleeper, loaded on the track, is worth 6s. 2d., while three times as much may be made by extracting the tannin. For this reason the principal companies engaged in the quebracho trade have abandoned the manufacture of sleepers, so that certain railway companies——the Buenos Ayres Western, for example——have had to content themselves with iron sleepers.
Until quite lately quebracho wood was sawn into large round or squared balks, which were then sent abroad, chiefly to Germany, where the tannin was extracted. During the five years, 1899-1903, 1,044,000 tons of logs were exported; in 1903, 200,201 tons; in 1904, 252,723 tons; in 1905, 285,897 tons; in 1906, 230,000 tons; in 1907, 246,514 tons; and during the first six months of 1908, 127,609 tons. Various foreign and native companies were formed, with large capitals, to convert the wood into extract of tannin, and to export it in this form.
These companies are: the _Compañia Industrial del Chaco_, with a capital of £348,000 and two factories; one at Las Toscas, in Santa Fé, with a monthly output of 1000 tons of extract, and one at Calchagin, in the same Province, which produces 600 tons per month. These factories are equipped with German plant.
This company enjoyed a season of great prosperity in 1904; although its factories produced only 12,000 tons of extract instead of 36,000, as they could have done, a dividend of 42 per cent. was declared. Since then the lack of outlet and the low prices have paralysed the development of this industry.
Another tannin factory, able to produce 250 tons of extract, has been established by Herwig Brothers at Pehuajó, Province of Corrientès.
The Compañia Industrial del Chaco is also about to erect, at Resistencia, a factory with a capacity of 300 tons of extract per month.