- TIMBERBIZ.COM.AU - A La Une - 09/Jul 00:30

Ikea invests heavily in New Zealand pine forests

Ikea has bought up more South Island farmland to plant in pine forest, as the Government moves to stop the emissions trading scheme slashing food production. Source: The Press The Swedish-founded global furniture and homewares giant, which will open its first New Zealand store in Auckland this year, is one of the world’s biggest users of timber. Through its subsidiary Ingka Investments, the Ikea Group has bought almost 1500 hectares of land in Marlborough and Otago in the past few months after gaining permission from the Overseas Investment Office (OIO). It has paid about NZ$18 million for the farmland. The purchases bring the total amount of rural New Zealand land owned by Ikea to 27,000 hectares, which accounts for about 8.5% of all its forestry land globally. Most of the company’s timber is grown in Europe. Last month the Government introduced its Climate Change Response (Emissions Trading Scheme – Forestry Conversions) Bill to Parliament, which is expected to take effect from October, with some rules retrospective. The new law would tighten rules allowing productive farmland to qualify for the carbon emissions trading scheme when planted in non-native forest. Recent research shows more than 300,000ha of New Zealand farmland have been converted to forestry since January 2017, resulting in the loss of more than two million stock units. Conversions have accelerated as farmers rush to plant forest or sell land to beat the law change. Ikea’s Marlborough farmland purchase is a 1282ha block of land on Saltwater Rd in the Wairau Valley. While the exact price has not yet been disclosed, it is understood to be in the region of NZ$11m. Most of the property is in use as a sheep and beef grazing farm. According to the OIO report, Ingka Investments will convert 1136ha into a commercial radiata pine plantation. Ingka has also bought 812ha of a property called Skyeburn Farm, in the Owaka Valley in Clutha District in Otago. The price paid was NZ$6.84m. The property includes 643ha used for sheep and beef breeding and as a finishing station. Ingka will plant 657 hectares in pinus radiata. Planting on both the Wairau Valley and Owaki Valley blocks will begin this year. Ikea spokesman Felix Őstman told The Press they will sell the timber harvested in New Zealand on the open market, and only some of it will go into Ikea products. He said they have chosen New Zealand because it presents a good inter-generational investment opportunity, “but also to take a leadership position in responsible forest management in the country”. Őstman said while Ikea mostly buys existing forests, it has recently bought farmland when established forestry is scarce. It was planting mostly pine but would set aside about 10% of forest for other species it would not fell including redwood, beech, totara and manuka, he said. “We do not purchase or plant forests to participate in carbon farming to generate and sell carbon credits from its forestland. “We are not in it for carbon credits. Our focus is on ensuring these forests are managed responsibly and contribute positively to the local environment and communities.” “We do not purchase or plant forests to participate in carbon farming to generate and sell carbon credits from its forestland. “We are not in it for carbon credits. Our focus is on ensuring these forests are managed responsibly and contribute positively to the local environment and communities.”