May 19, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Ingka Investments Forest Assets NZ Ltd. –  a unit of Ingka Group, the parent company of IKEA – has acquired Stoneridge Farm, a sheep and beef breeding operation in Porangahau, from the Martin family, with the intention of converting the property into a production forest. 

The property has been owned in its entirety since 2010 by Jeremy and Caroline Martin, and Jeremy’s parents, Alison and Stuart Martin. Due to how steep the property is, Jeremy Martin told the New Zealand Herald that forestry is really the only viable option for a new buyer. However, the family was adamant that they did not want to sell to any buyer looking to farm carbon.

“It was a tender process and we had multiple offers, several from different forestry groups including Ingka,” said Martin. “There were also a couple of offers from carbon farming entities. We were adamant that we did not want to sell to carbon farming.”

Ray Raiesmaa, operations manager, Ingka investments forestland portfolio and acting country manager, stated that Ingka Investments intends to pursue a course of afforestation – planting production forests that will then be managed by applying “principles of responsible and prudent conversion to a production forest”.

Arrival on the South Island

In September of last year, Ingka Group made its first acquisition on New Zealand’s South Island, buying 5,500 hectares (13,591 acres) of land as part of its long-term responsible forest management strategy. 

Ingka Group stated that its plan for the property, which is called Wisp Hill and located in Otago, entailed the planting of 300 hectares with radiata pine by the end of 2021. In the longer term, more than 3 million seedlings are to be planted on 3,000 hectares (7,413 acres), with the remaining 2,200 hectares (5,436 acres) to be left to revert to native bush in order to help regenerate the local ecosystem. 

“We are delighted to expand our forestry portfolio into a new country and this investment demonstrates our long- term commitment to New Zealand,” said Krister Mattsson, managing director at Ingka Investments, in September 2021. “Responsible forest management, reforestation and afforestation all form part of the solution for climate change, and we are committed to enhancing carbon removal through our forests.”

Today, Ingka Group owns and manages approximately 250,000 hectares of forestland in the U.S., Estonia, Latvia, Lithuania, Romania, and now, New Zealand. Between September 2019 – August 2020 the group planted nearly 7 million seedlings across its global holdings, with an increasing focus on afforestation, or the intentional creation of new forests by planting trees in previously bare areas.

This initial deal in New Zealand (and the subsequent acquisition of Stoneridge Farm), follow Ingka Group’s 2019 announcement of its opening IKEA stores and creating a digital presence in New Zealand for the first time. (However, Ingka Group-owned forests do not currently directly supply raw materials for the production of IKEA products.)

IKEA remains committed to the Paris Agreement and to limiting the global rise in temperature to 1.5 degrees above pre-industrial levels. In the same spirit, Ingka Group stated that as guarantee that its management meets the highest and environmental standards, audits will be conducted by the Forest Stewardship Council (FSC®) for all of its portfolio holdings. 

Mattsson concluded, “Our commitment to responsible forest management means taking proper care of the environment, respecting the needs of the local communities and setting high standards for the business partners we work with.”

~ Lynda Kiernan-Stone is editor 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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