Consolidating to build high quality Estonian forests

Dasos’ investment in Estonian forestry goes back to 2010 and is based on the buy and build concept where large property holdings are built up by acquiring smaller properties from numerous sellers, including private individuals, companies and the Estonian State. “Through this investment, we aim to consolidate fragmented forests in the country and to increase the quality of forests. What’s more, all of our forests which are located close to local forest industry and ice-free ports in northern Estonia are PEFC certified,” says Olli Haltia, CEO at Dasos. Forest ownership in Estonia is generally very scattered with an average private forest holding size of only 12.5 hectares which is not enough for commercial use or conservation.

“Our forests produce pine, spruce and birch saw logs as well as pulpwood which are sold an annual basis to wood buyers. For wood sales, Dasos co-operates with locally based forest industry companies which can process high quality products and services for their clients. This cooperation provides the local forest industries with stable, secure and certified high-quality wood supply, encouraging them to expand and invest in added value products,” Haltia adds.

Dasos follows a sustainable harvesting programme that aims to maximize the value of the standing forest taking into account wood production as well as environmental factors. For instance, they harvest at a lower rate than the trees’ biological growth rate, replant whenever possible and carry out timely thinnings. This guarantees favourable growth conditions for the new stand and allows obtaining high quality and healthy forests in the future. Dasos also owns and manages forests for recreational uses and biodiversity enhancement.

Combining economic interests and biodiversity in Eastern Finland

In the municipality of north Savo in Eastern Finland, Dasos invested in 2010 and 2012 in 6 702 ha of mixed semi-natural forests dominated by pine, spruce and birch. Today, these are in active commercial use. The timber produced is sold to Finnish industry on long-term wood sales contracts. Some 75-85% of the wood sales revenue is sourced from the sales of saw logs to local sawmilling industry while the remaining revenue comes from smaller scale pulpwood and various wood grades for bioenergy production including forest residues. Recent changes in Finnish construction regulations have also lead to an increased market for high-quality sawn wood which is used by local housing and wood-based architecture.

Dasos has also identified sites for recreation and wildlife. In addition to an efficient wood production, Dasos is taking measures to promote biodiversity and environmental values on its properties. All of them have been certified according to the PEFC certification with a majority of the area being also double-certified with FSC certification.

Furthermore, Dasos has established nature conservation areas according to the Forest Biodiversity Programme for Southern Finland (METSO). This programme aims to halt the ongoing decline in forest species and habitats and establish favourable trends in forest biodiversity by 2016. The programme connects protection and economic use of forests. In addition to protecting natural forests, it aims to guarantee the natural state of the geological formations and wetlands located within the areas.

Regenerating forests in Malaysia

Further east, in 2010 Dasos invested in a Malaysian timberland company that grows Acacia trees on a 25 000 ha area. The asset holds FSC certification in an area which has suffered from deforestation during recent decades.

Today, the country holds competitive advantages supplying wood to the region where the domestic production is lagging behind the regional wood consumption with an ever widening gap, mainly driven by the demand by China, India and Vietnam.

Hickory wattle trees are planted, cultivated and grown based on a saw log regime to provide valuable raw material for wood-working industries, including the furniture manufacturing and housing.

Just a year after investing in this Malaysian company, the acacia plantation located on the island of Borneo was FSC certified. It also grew from 76 employees in 2010 to 118 four years later.