Furniture giant IKEA has made a substantial forestry investment thought to be in the region of 100 million euros.
The Swedish company announced this past week that it has bought 33,600 hectares of forests in Romania, where it already has investment heavy in sustainable forestry. While the cost of this investment has not been revealed, market data available on the price of forest land in Romania suggests it could be around 100 million euros.
The woodland that has been bought is located in central and north-eastern Romania. It means that Romania is now the first country to house the full life cycle of an IKEA product; the furniture items are made from Romanian timber, manufactured in the country and then sold in the nation’s outlets.
IKEA’s acquisition not only demonstrates a commitment to sustainable forestry, which Greenwood Management fully endorses, but also the financial sense in forestry investments.
Frederik de Jong, chairman of the board at IRI Investments SRL, which is the IKEA subsidiary that manages this investment, commented: “The investment in woodland is a way for us to diversify our assets. We are happy to expand our forestry activities to Romania, a country that’s important for our furniture production.”
Violeta Nenita, operations manager of South East Europe purchasing at IKEA, added: “More than 14,000 people work for our suppliers in Romania, and the value of products purchased by IKEA Group in Romania rose to 400 million euros per year. We have over 15 years of collaboration with our existing suppliers, during which most of them have registered increased sales and have significantly improved their production capacities.”