On February 13, 2025, Sumitomo Forestry Co., Ltd. (President: Toshiro Mitsuyoshi; headquartered in Chiyoda, Tokyo) and Daiwa House Industry Co., Ltd. (President: Hiroshi Takeuchi; headquartered in Minato, Tokyo) announced their agreement to collaborate on various business areas ranging from forest management to housing and real estate, aiming to boost corporate value and promote carbon neutrality.
The partnership begins with Daiwa House's investment in Kowanomori Co., Ltd. (President: Tomomitsu Anenaga; headquartered in Iwaki, Fukushima), which is a subsidiary of Sumitomo Forestry. This collaboration aims to develop stable supply chains for Japanese structural timber (dimension lumber) and increase the utilization and added value of domestic timber.
Historically, Japan has faced challenges, such as the 2021 wood shock, which led to significant shortages and price surges impacting material procurement. Although approximately 70% of Japan's land is forest, the domestic timber self-sufficiency rate remains around 40%, indicating insufficient utilization of local resources. Much of the post-war planted forest is reaching its harvest period, resulting in aging woodlands. There is now pressing need for enhanced domestic timber exploitation and the establishment of systems to provide stable supplies of structural materials.
Responding to this backdrop, Sumitomo Forestry and Kowanomori, alongside Daiwa House, are targeting long-term stability for the supply and procurement of domestic dimension lumber. Daiwa House will underwrite third-party allocations for Kowanomori’s capital increase. The new Koyakura plant, to be built in Iwaki and set to commence operations by March 2026, plans to process 110,000 cubic meters of raw timber annually, aspiring to be one of the largest dimension lumber manufacturing facilities in Japan. A portion of the produced dimension lumber is slated to supply Daiwa House's properties across the Kanto and Tohoku regions after 2026.
These initiatives align with the interests of both companies, with Sumitomo Forestry aiming to create reliable supply sources, and Daiwa House focusing on stable access to domestic materials. Enhancing the use of local timber supports sustainable forest management, rejuvenates forests through selective logging and replanting, and contributes to increased CO2 absorption, aligning with society's decarbonization goals.
The partnership's progression is underpinned by shared values and objectives related to carbon neutrality. Both Sumitomo Forestry and Daiwa House have engaged extensively to align their strategic directions, leading to this foundational agreement. The collaboration targets potential synergies across four designated business areas: overseas operations, domestic initiatives, Kowanomori and domestic timber-related projects, and various additional business fields.
Each company’s president commented on the significance of this alliance. Toshiro Mitsuyoshi from Sumitomo Forestry emphasized the company’s long-term vision known as “Mission TREEING 2030,” which aims to simultaneously advance three values: the earth’s environment, society, and the market economy. Mitsuyoshi noted the commitment to enhancing the wood industry’s value chain and leveraging domestic timber to invigorate local forestry.
Meanwhile, Hiroshi Takeuchi of Daiwa House highlighted the company’s dedication to diverse real estate and service ventures, stating their history with domestic timber utilization began back in 2007. Takeuchi expressed optimism about collaborating with Sumitomo Forestry to contribute significantly to carbon-neutral initiatives.
The formation of Kowanomori aims to capitalize on Japan’s unique environmental assets by focusing on the sustainable production of construction timber. The company, established on November 1, 2023, is dedicated to managing and producing domestic timber and other wood products.
This collaboration puts both companies at the forefront of Japan’s efforts to address timber shortages and environmental challenges, all the meanwhile promising economic growth.