By Gerelyn Terzo, Global AgInvesting Media
New Forests, a Sydney, Australia-based investment manager specializing in natural capital, is expanding its reach north and into Southeast Asia. Through its Tropical Asia Forest Fund 2, New Forests has made its inaugural investment in Vietnam’s timber processing sector, backing Tavico Group, a supplier of solid wood lumber and logs in the country. With the capital, New Forests is looking to create a platform for an integrated timber processing and plantation business across Laos, Cambodia and Vietnam, the latter of which will serve as the main hub.
New Forests’ Tropical Asia Forest Fund 2 is an investment vehicle focused on sustainable forestry in Southeast Asia. Its latest investment, the fourth of its kind, comes on the heels of its acquisition of a majority stake in Laos-based Burapha Agro-Forestry, a timber plantation company. Fund 2 held its first close in March 2022, raising $120 million in capital commitments, and held its final close at year-end 2023, with total commitments of $130 million, falling shy of its early target of $300 million. The investor lineup includes sovereign wealth as well as corporate, philanthropic and development finance capital from Australia, Europe, Japan, the Philippines, Singapore and the U.S.
Founded in 2005, Tavico began as a log trader and sawn timber mill with a modest annual production capacity of 12,000 cubic meters of lumber—enough for roughly 800 medium-sized homes. Since then, Tavico has dramatically scaled its operations, now boasting an impressive annual output of approximately 250,000 cubic meters, capable of supplying wood for around 16,500 homes. The company has also broadened its reach, expanding into distribution centers, a home furniture wholesale market, warehousing, and modular wooden home construction.
New Forests’ strategic investment in Tavico aims to forge an integrated timber processing and plantation powerhouse spanning Laos, Cambodia, and Vietnam, with Vietnam serving as the central hub. Tavico plans to expand into higher-value segments, including finger-joint panels, flooring, furniture, glue laminated timber and FSC-certified wood pellets.
Beyond its commercial ambitions, Tavico has championed sustainability through a 3,200-hectare (7,907 acres) FSC-certified community forestry program. This initiative not only provides employment but also offers revenue-sharing opportunities for local communities. The fresh capital from New Forests is earmarked to expand this program, further empowering smallholder farmers in Vietnam. Notably, the Restoration Seed Capital Facility (RSCF) played a crucial role, supporting Fund 2’s due diligence and helping ensure the project delivers substantial environmental and social benefits that surpass conventional industry standards.
New Forests Senior Managing Director of Emerging Markets Geoffrey Seeto stated, “We are excited to be announcing our first investment in Vietnam, partnering with Tavico, a company with significant scale and network for timber processing across the country. This collaboration reflects a shared vision for creating long-term value through innovation, sustainability, and positive impact on local communities.”
Tavico Group CEO Vo Quang Ha commented on the partnership, saying, “With their support and global expertise in sustainable forestry, we’re well positioned to expand our impact, strengthen our value-added capabilities, and continue leading the way in responsible wood sourcing in Vietnam. Together, we aim to help elevate the entire Vietnamese wood industry by promoting higher sustainability standards, encouraging the use of certified wood, and supporting the development of a traceable, high-value supply chain that benefits both local communities and the environment.”
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