February 29, 2024

By Lynda Kiernan-Stone, Global AgInvesting Media

Japanese global trading and investment company Mitsui & Co. and Brazil-based Suzano S.A., the world’s largest paper and pulp producer, have forged a non-exclusive Joint Collaboration Agreement focused on exploring the manufacture and sale of next-generation biomaterials and derivatives, such as biofuels. 

A foundation for the venture is Suzano’s vast forest resources, which stand as the largest in the world spanning 2.6 million hectares (6.42 million acres), or about 12 times the area of Tokyo. The company plants trees, develops its own forests, and operates a sustainable business manufacturing pulp-based products and others, using its forest resources that were recently expanded when the company acquired 70,000 hectares in Mato Grosso do Sul planted in eucalyptus of various ages, for R$1.826 billion (US$370 million).

Together, through this collaboration, the companies will study the potential for developing bioproducts using Sezano’s sustainably-farmed eucalyptus biomass and the residue by-products from the pulp production process. 

Toward their end-goal of creating a new market by jointly manufacturing and selling forest-derived biomaterials and biofuels such as low-carbon methanol and bioethanol, etc., they will leverage Mitsui’s global business networks, customer assets, expertise in chemicals, performance materials, and energy, along with Suzano’s leadership in large-sale, sustainable production of biomass through the farming of eucalyptus trees. 

As part of the three-year venture, the companies will establish project teams that will collaborate to conduct feasibility studies and due diligence for a number of potential opportunities across the bioeconomy landscape. 

For Mitsui, this deal is an expansion upon its recent acceleration into forestry resources. 

Mitsui has been investing in Australian forestry since the 1990s to supply wood chips to the Asian pulp and paper industries, but it wasn’t until 2016 that Mitsui first became a shareholder in New Forests, when it agreed to acquire a 22.5 percent stake in the forestry and land investment manager. 

In January 2022, Mitsui & Co. announced it had invested in an Australia-based carbon offset fund jointly developed with New Forests, which was to manage the fund. 

The following year, in May 2023, Mitsui and Nomura, a global financial services group with a network spanning more than 30 countries and regions, agreed to fully acquire New Forests — the second largest forestry investment manager in the world and the largest in the timber and plantation sectors in Asia-Pacific — as part of their shared mission to address climate change, conserve nature, support the shift to a circular bioeconomy, and contribute to the local communities where New Forests operates.

Then in August 2023, Mitsui and Nomura joined forces again to invest in Tropical Asia Forest Fund 2, a Southeast Asian forestry resource fund managed by New Forests Asia, a wholly owned subsidiary of New Forests.

For Nomura, this capital commitment marked the first investment in a forest fund managed by New Forests, stating at the time that it was seeking to obtain a share of excess carbon credits generated through the fund’s investments in forestry and carbon projects, along with financial returns. 

Together with these tie-ins with New Forests, Mitsui explained that its move to partner with Suzano aligns with its theme of Creating Sustainable Futures set in its Medium-Term Management Plan 2026.

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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