South of the billion business: it was a unique opportunity

"It was a unique opportunity that was revealed," says Olof Hansson, Business Area Manager for Södra Skog, about the acquisition of three billion in Latvia.

Södra therefore buys the entire company Bergvik Forest in Latvia. It concerns about 111,100 hectares of land, of which 80,300 hectares of forest. These will be added to the 15,000 hectares of forest land in Latvia that is already owned by Södra. Södra will therefore own five percent of the private forest land in Latvia.

– There is no ordinary Latvian forest that we buy. It is a very ambitious concern for these properties, where you have cleaned and planted a lot over the past ten years, "says Olof Hansson.

Lars-George Hedlund, CEO of Bergvik Forest in Latvia, says that a million day care workers have been taken care of. 500 people have worked throughout the year for ten years to create a good production forest.

"We are pleased that the job we have is appreciated by Södra and the others who participated in the process, it is a victory, he says.

Södra pays EUR 324 million, corresponding to SEK 3.3 billion for the company in Latvia.

Almost a billion of capital gains

Bergvik Skog & # 39; s semi-owner Stora Enso announces that it will make a capital gain of SEK 487 million on the deal. This means that the total capital gain will amount to almost SEK 1 billion with the purchase of Södra.

If you calculate the value of other land and agricultural land, the price for the forest will be around 35,000 SEK per hectare, or around SEK 275 per m³, according to Olof Hansson.

– Then you can make your own assessment if you think it is a good or bad company, but there are big differences with the prices we see in Götaland. We think it's a good deal, otherwise we would not have implemented it.

Bonni in the forest must be well aligned with that in southern Sweden and with sustained ambitious forest management, growth and harvest opportunities will increase even further in the future.

"We see it as an important part of the supply perspective, and Latvia is and will continue to be an important source of import for us, and now we provide part of the need we have," says Olof Hansson.

Can be sent to Sweden

Earlier, Bergvik Skog sold the wood as the root of the highest bidder. In the future, the timber will be sold to the industry in Latvia and, if necessary, the pulp will be sent to Södra in Sweden.

But the imports from Södra's own forests do not affect the prices of pulpwood in Sweden. Olof Hansson says that the 95,000 hectares in Latvia is a little bit compared to the 2.5 million hectares of forest that the members of Södra have.

"It's a small part and will not affect the whole in any way in Sweden, it's more likely to give our industry a chance to become profitable and to bring back profits generated by the industry for our owners," he says.

The sharpened security situation in Europe, where Latvia's neighbor Russia was displaying major ambitions, is nothing that Södra solves.

"We see Latvia as a very stable country, as EU members and also as members of NATO, we have been active in Latvia for many years and we do not see any major risks with Latvia from that point of view," says Olof Hansson. .

Facts Bergvik & # 39; s forest in Latvia

Area: 110,000 hectares

Productive forest land: 80 300 hectares.

Wooden floor: 10, 6 million m3sk.

Felling 2017: 239 415 m3fub.

Source: the annual report of Södra and Bergvik Forest

Source link