The Estonian timber industry is getting more and more world-class companies on board, thanks to its sustainable forestry practices, strategic location, and strong infrastructure. This week, Ingka Investments, IKEA Group’s investment arm, has secured approval to purchase 153,000 hectares of Baltic forest land for €720M, reports ERR.
The Estonian Competition Authority has approved the acquisition of forest assets from Swedish-owned Södra Forest Estonia, which encompasses 18,000 hectares in Estonia and 135,000 hectares in Latvia.
The transaction is described as a strategic move by IKEA to strengthen control over its wood supply chain, while also committing to regional value creation. Tauno Kusma, forestland country manager at Ingka Investments Estonia, said the company aims to increase the proportion of wood processed locally to strengthen the Baltic forestry value chain.
The acquisition comes as Södra Forest Estonia, one of the region’s largest forest managers, divested nearly all its Baltic holdings. In Estonia, the company manages 18,000 hectares of land, approximately 90 percent of which is forested. Despite the huge size of the deal, the market is expected to remain stable — Priit Luts of Estonia’s State Forest Management Center noted that it will represent approximately 1 percent of the country’s total managed forest land.
Latvia’s competition authority is currently reviewing the merger, with a decision expected by December 12 following consultation with market participants.
Estonian timber companies have been long-term suppliers to IKEA, and around 1% of Estonia’s total timber harvest is used by IKEA suppliers, primarily birch and pine.
