Providing the global market with sustainable wood resources
New Zealand / Russia / Chile
Managing forests for the stable procurement of wood resources
It was in the 1950s when imported wood began to attract attention in Japan. Sumitomo Corporation started its wood business by importing wood into Japan to support the high economic growth of the country. The company has now expanded the business to include forest management, with a view to securing and utilizing forest resources in a more sustainable manner. Within the wood business we are targeting not only Japan's matured market, which does not have much room for remarkable growth, but also markets with high growth potential in China, India and ASEAN countries.
We aim to become a major player in the Pacific Rim and are working to build a system to sell wood resources procured mainly in the region to the global market.
Supplying raw wood produced in New Zealand to China and other Asian countries
In March 2013, Sumitomo Corporation acquired forest in New Zealand and subsequently began to manage it. Called the Summit Forests New Zealand, it extends over about 40,000 hectares on the North Island. Here, Radiata pine is grown and harvest to be exported to China and other Asian countries.
The management of a forest entails much labor, such as thinning out and pruning. There are also management risks to consider, including damage caused by fires and storms. Moreover, managing a forest means it might also be necessary to establish roads, port and other infrastructure. Despite these challenges, Sumitomo Corporation is engaged in the management of forests in order to ensure a stable supply of wood on a long-term basis.
In the Summit Forests New Zealand, trees are planted, grown and harvested in a cycle of 30 years to supply wood resources in an environment-friendly manner. For this forest, Sumitomo Corporation employs local inhabitants. They have long been engaged in forestry and have vast knowledge of forestry. They are therefore efficiently sharing the work of planting, growing and harvesting trees in the plantation. On an annual basis, trees are hauled from the forest in the volume of about 600,000 m3 (equivalent to the volume of 900 25-meter pools). Nature is preserved in the forest, with wild horses running free. Sumitomo Corporation is thus managing the forest in harmony with the local environment, instead of just trading wood from the forest, and this approach is highly evaluated by the local people.
Achieving great results in Russia and Chile
Sumitomo Corporation also manages forests in Russia and Chile to ensure the stable supply of wood resources.
In Russia, we have a large forest surrounding a port town named Plastun, which is nine hours' drive from Vladivostok. The huge forest extends over about 2.85 million hectares. The forest business is conducted by Terneyles, in which Sumitomo Corporation has held a 49 percent stake since 2007.
It is very cold in winter in Russia, and both softwoods and hardwoods grow well, some for more than 100 years. In the forest managed by Terneyles, trees are harvested while leaving surrounding parent trees intact so that they can drop seeds to allow new trees to grow naturally. It takes 100 years for trees that have sprouted this year to grow tall enough to be harvested, and the forest business therefore needs to be passed down over two or more generations. Terneyles also operates four factories to process the logs into veneer, laminated wood and lumber, which are exported to Japan, South Korea and China as value-added products.
In Chile in South America, Sumitomo Corporation manages a eucalyptus forest. The forest is located about 650 kilometers south of Santiago, the capital of the country. We began planting trees in the forest in 1992 and started to fell them in 2002. Thus trees are planted, grown and harvested in a cycle of about 10 years in this forest. At present, the third round of planting is already under way. The raw material is transported from the forest to the factory, where it is processed into chips, which are mainly exported to Japan as material for the manufacture of paper. In the future, the volume exported to China, where demand for the chips is due to rapidly expand, will also increase.
Aiming to become the top company in the Pacific Rim in the business of wood resources
Wood represents a recyclable resource because trees can be planted, grown and harvested repeatedly. In addition, wood is one of our most familiar resources. In Asia, where countries are achieving high economic growth, demand for wood resources will continue to increase. In response, Sumitomo Corporation will work to ensure the stable supply of wood resources in the Pacific Rim by capitalizing on its long-term experience of importing wood into Japan.
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