UPM and Tornator PLC have announced that they have signed a Letter of Intent (LoI) on forest land sales and long-term wood supply in Finland.
Finnish forest industry major UPM and Tornator PLC, a Finnish forest investment company with timberlands in Finland, Estonia, and Romania have announced that they have signed a Letter of Intent (LoI) on forest land sales and long-term wood supply. The value of the agreements has not been disclosed.
Tornator will annually sell a significant volume of wood from its forests to UPM production facilities in Eastern Finland.
– Our mills in Eastern Finland use all wood assortments and Tornator owns a significant number of FSC certified forests in the vicinity with a versatile range of tree species. This agreement strengthens the wood supply to UPM mills and increases the FSC certified wood volume in our mills in Eastern Finland, said Sauli Brander, Senior Vice President, UPM Wood Sourcing and Forestry in a statement.
Forest assets change hands
Additionally, the companies have agreed on timberland sales whereby 23 000 hectares (ha) of UPM-owned forest estates in North Karelia will be sold to Tornator. The forests are located in the municipalities of Ilomantsi, Juuka, Lieksa and Polvijärvi and are certified according to PEFC and FSC. As part of the real estate portfolio development, UPM has for several years regularly sold forest assets located far from its mills.
– This forest land sale is different than our previous investor agreements as the buyer is an established forest owner in the vicinity of our mills and thus able to flexibly supply wood to UPM, remarked Brander.
– Our strategy is to grow as a forest owner and at the same time to be a responsible and competitive partner to our customers and stakeholders. The agreements with UPM support our goals extremely well. The UPM forest estates covered in the agreement are located in Tornator’s core area and bring along significant synergy benefits in forestry and improve our service capabilities in wood and lakeshore plot markets. Furthermore, they enhance our capability to supply double-certified wood to our current customers and do not affect our ownership or business model, said Sixten Sunabacka, CEO, Tornator PLC.
