2% of Latvia is on the market! The Swedes are preparing to sell 153,000 ha of Baltic forest – will the state get involved?
"Södra" is Sweden's largest forest owners' association and forest industry group, and it also owns large forest areas in the Baltic States and is engaged in logging and timber trade, selling forest properties and related companies in the Baltic States, according to a statement on the company's website .
We sometimes worry that Scandinavian pension funds own our forests, on which they earn their citizens' future pensions. But in a truly Latvian spirit - we want to get angry again and ask questions - what is encouraging the Swedes to abandon their previously safe investment? Is it concerns about possible geopolitical changes or local economic policy? We don't know that yet. Meanwhile, experts - also in a purely Latvian spirit - call not to speculate about the reasons for the intention, that is, not to delve into it, but to encourage taking over into state ownership or partnership, because such large areas do not often come up on the market.
The Södra Group of Companies is one of the largest forest managers in Latvia and manages a total of 132,428 ha of land, of which 107,120 ha is forest land. The Södra Group in Latvia unites the following companies specializing in forestry: SIA Södra Forest Latvia, SIA Alfredsson Latvia, SIA Fragaria, SIA Myrtillus, SIA Ruda, SIA Zilupe Mežs. As well as – Södra Mežs. Including Estonian forests, the group owns 153,000 ha of forest land in this region. This is according to the information on the website .
According to the official version, the Södra Group wants to take care of its members' forests and manage them, not be their owners. The Baltic forests, including those in Latvia, were purchased primarily to manage them, generate income from logging, and obtain raw materials for its pulp mills in Sweden. Now, investment plans may have changed, and the sale of some of the shares would provide funds for new investments abroad, for other projects. There is no rush until the right buyer appears.
Meanwhile, Agriculture Minister Armands Krauze tweeted that Latvia should seize the opportunity and purchase the offered forests as a matter of national interest, national security and economic security. And finally, Latvia could safely invest in its forests.
pension fund funds in state forests, which has been talked about for a long time.
This is also emphasized as an excellent opportunity by Kristaps Klauss, Vice President of the Latvian Wood Industry Federation (LFF), commenting on this fact to the Leta agency and referring to la.lv. , because such large land properties – currently 2% of Latvia's total area – appear on the market once every decade.
The vice president of LKF admitted to LETA that Södra is currently selling its forest land because the market situation is favorable in order to get a good price, and the group may currently have large investments planned outside the Baltic States. He mentioned that in 2018 Södra bought part of the property that is currently being put on the market, and the value of this part at that time was 324 million euros. The total value of the land currently put on the market by the group could reach more than 500 million euros.
The only question is how to implement this acquisition, given the chronic lack of money for sensible things? It is being mentioned as an idea that a new, partially state-owned company could be created that would attract capital through the stock exchange. In turn, the minister sees this as a safe investment for Latvian pension funds.
In Klaus's opinion, this land can only be recovered for this amount with the involvement of the state, because - who would have that kind of money right away? Even the state And "Latvijas Valsts meži" does not have it and should think about how to attract funds. It is possible that it could be purchased by AS "Latvijas Valsts meži" (LVM), but then the Latvian state would no longer be able to withdraw the maximum funds in dividends for the needs of the state budget, as he sees the situation. Klaus also sees as a possibility that a hybrid model could be implemented, in which the holders of the second pension fund and AS "Finanšu institucija "Altum"" would be involved, which would to some extent buy out this land as a financial asset and, for example, transfer it to LVM for management, earning a return. However, in this case, over time, such property would have to be re-released on the market. As potential capital attraction options, he mentioned the listing of bonds on the stock exchange, or the creation of an LVM subsidiary and the public offering of shares (IPO).
Let us remind you that the Swedes are the dominant owners of private forests in Latvia. In addition to the Södra Group, large forest areas are also owned by the Billerud Group (packaging manufacturers that have merged with Korsnäs), the IKEA Group (which, although registered in the Netherlands, unites such Latvian forest-owning companies as IRI Forest Assets Latvia, Ingka Investments management, Ingka Investments Latvia), and Isnaudas Forest Holding (including SIA Austrumu Mežs, SIA ISTALSNAS MEŽS, SIA ŅUKŠU MEŽS and SIA SILMALAS MEŽS).
"Södra Forest Latvia", part of the Swedish concern, owned by "Södra Skogsagarna ekonomisk forening", was registered in 2003, share capital: 106.026 million euros. In 2023, it operated with a turnover of 3.887 million euros, which is 17.3% more than the year before, but suffered losses of 207,084 euros. LA .lv reports
Check out older articles about TOP forest owners in Latvia:
Poirot.lv
LA.lv
blog.lursoft.org
Scandinavians dominate the forests of Latvia. LA.lv
Prepared based on information available on the Internet
Photo: @abctimber.com