New Forests, a global investment manager of nature-based real assets and natural capital strategies, is announcing its Tropical Asia Forest Fund 2 (TAFF2) has made its first investment in timber processing infrastructure in Vietnam by investing in the Tavico Group, one of the country’s leading suppliers of solid wood lumber and logs.
Tavico was founded in 2005 as a log trader and sawn timber mill with annual production capacity of 12,000 m3 of lumber per annum, which is equivalent to approximately 800 medium sized houses.
Since then, Tavico has increased its annual production capacity to approximately 250,000 m3, equivalent to supplying wood for 16,500 medium sized houses. Tavico has also expanded its operations to include a distribution centre, home furniture wholesale market, warehousing and modular wooden home construction.
TAFF2’s investment in Tavico will seek to establish a platform for an integrated timber processing and plantation business across Laos, Cambodia and Vietnam, using Vietnam as a focal point. Tavico will look to expand into higher-value segments including finger-joint panels, flooring, furniture, glue laminated timber, and FSC-certified wood pellets.
Tavico has established a 3,200-hectare FSC certified community forestry program with small holder farmers which provides employment and revenue sharing opportunities for local communities. The investment from TAFF2 will look to expand this program for smallholder farmers in Vietnam.
The investment marks the fourth acquisition for New Forests’ TAFF2 strategy, which is continuing to deploy capital after announcing in April that it has acquired a majority stake in Burapha Agro-Forestry, a Laos-based timber plantation forestry company.
New Forests is a global investment manager of nature-based real assets and natural capital strategies, with $8 billion in assets under management across more than 4.2 million hectares of investments.
