IKEA owns 50.000 ha of forests in Romania, twice the size of Bucharest

by Romanian Reporter - Friday, February 5, 2021 10:39 AM


IKEA owns 50.000 ha of forests in Romania, twice the size of Bucharest

Ingka Group, one of the 11 groups of companies that own and operate IKEA stores under franchise agreements with Inter IKEA Systems B.V., acquired 50.000 hectares of forests in Romania since 2015. During this time the company planted 2.6 million trees.

In the last two years, Ingka Investments Romania, which owns the forests, harvested 193.000 cubic meters per year. According to Constantin Moisa, country manager Ingka Investments Romania, the quantity represents 64% of the annual forest growth, which is about 307.000 cubic meters.

Therefore, the net volume growth of IKEA forests in Romania is estimated at 224.000 cubic meters annually, declared the country manager in an interview for economica.net.

The wood harvested by IKEA is sold on the free market, 80% going to local companies.

2.6 million trees, planted since 2015

In the last two years, the company planted 400.000 trees in 2019 and 250.000 in 2020. The vast majority of trees were planted for ecological reconstruction projects of some artificial habitats, planted in the 1970s with spruce trees outside of their natural area. A small portion of trees was planted for completing the natural regeneration or for improving the density of the trees in newly acquired forests.

Forests for sale

Over 1.200 ha of forests are being put up for sale by IKEA. According to the company representative, the reason for sale is their relatively small size and the location. The lots are scattered outside the regions where the majority of forests owned by IKEA are located, so the optimization opportunities are limited.

Ingka Investments Organizational Structure

Ingka Investments BV is the investment arm of Ingka Group and manages IKEA investments in 6 different areas:

  • Secure liquidity for the business (bonds, listed shares, and alternative investments)
  • Business development and digitalization (development opportunities that benefit IKEA Retail)
  • Renewable Energy (wind and solar energy)

IKEA's commitment is to produce as much clean energy as they consume in IKEA Retail and Ingka Centres operations. The company owns 547 wind turbines in 14 countries, two solar farms in the US, and over 920.000 solar modules on the roofs of the stores and warehouses. IKEA announced that they exceeded their goal in 2020.

Ingka Investments acquired 80% of the shares in 7 wind power plant projects located in Romania in 2019, having an aggregate installed capacity of 171MW.

  • Circular Economy (changing waste into resources across IKEA operations)
  • Forestland

At the present, Ingka Investment BV owns 248.000 ha of forests in Romania, Lithuania, Latvia, Estonia, and the United States.

  • Real estate (investments in commercial real estate, enabling IKEA Retail to open IKEA stores in city centers)

Ingka Investments Romania

Ingka Investments Romania is a branch of Ingka Investments BV. The company is controlling three Romanian legal entities:

  • Ingka Investments Assets SRL - the holding company of the 50.000 ha forests portfolio in Romania
  • Ingka Investments Management SRL - the company managing the forest investments
  • Ocolul Silvic Ingka Investments - the company managing the majority of the forests from Ingka's portfolio. Out of the 79 employees of Ingka Investments Romania, 62 are employed at Ocolul Silvic, founded in 2015 in Vrancea county

Photo by Baciu Cristian Mihai on Unsplash

 


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