The Japanese Iida Group Holdings agreed to acquire 75% of the shares of Russia Forest Products (“RFP”), the leading forestry company in Russia. The total investment amount is approx. 60 billion yen ($525 million), containing current share acquisition, the third-partly allotment and private financing scheme.
RFP is one of the largest forest companies not only in Russia but also in the world. Its areas with forest certification cover about 4 million hectares. The annual logging volume of roundwood, the official annual limit of which is up to 4.10 million cubic meters per year, covers 1.70 million m3, which is equivalent to the amount of roundwood the Company needs for construction of about 46,000 houses per year. RFP has several wood processing subsidiaries and has established an efficient and stable supply system based on the value chain from logging of roundwood to wood processing.
By acquiring RFP, Iida Group would be able to sustainably procure the lumber, which is the main material for house construction, even if the lumber market tightens or fluctuates affected by the incidents such as lumber shortage, and make detached house business, the Company’s mainstay, more competitive. Profitability of the Company’s building materials business is also expected to become higher by transferring the Company’s wood processing skills, which will make RFP’s products highly valued. In addition, wood, which is carbon neutral, is attracting much attention as an environmentally friendly material.
Therefore, Iida Group thinks that acquiring RFP, a remarkable holder of the wood resources, will play an important role in ESG management. In addition to securing stable supplies of construction materials, we intend to actively contribute to the achievement of the SDGs by utilizing stable sinks for CO2 through sustainable forest management for emissions trading and carbon pricing, which are expected to be institutionalized in the future, and by expanding of the on-going renewable energy business based on wood pellets.
For those reasons, Iida Group decided to subscribe for the third-party share allocation.
