Utilization of Japanese Timber

In Japan, the public and private sectors are working together to increase Japan’s self-sufficiency rate of wood for the country to achieve carbon neutrality and create a decarbonized society by 2050.
The Sumitomo Forestry Group promotes the use of domestic timber and contributes to sustainable forest management in Japan and the revitalization of the local timber market.

Establishment of an Industrial Complex to Promote the Use of Domestic Timber

The timber industrial complex*, which is upheld by Sumitomo Forestry in its long-term vision "Mission TREEING 2030," is a key initiative aimed at maximizing the added value of timber, promoting the use of domestic timber, and advancing cascade utilization.

For the establishment of the first timber industrial complex, a joint venture company, Kowanomori Co., Ltd., was established in Iwaki City, Fukushima Prefecture, in November 2023, and a new plant was constructed within the Yotsukura Core Industrial Park. The plant started commercial production in March 2026.

In February 2022, we signed a basic location agreement with Shibushi City in Kagoshima Prefecture, aiming to construct a new plant to produce high-strength structural materials suitable not only for residential buildings but also for non-residential construction.

Amid the declining trend in new housing starts in Japan, a timber industrial complex plays an important role. Through the initiative, we aim to increase the usage ratio of domestic timber and establish a stable supply system for domestic structural materials, thereby mitigating the supply uncertainties of imported structural materials for both residential and non-residential buildings in preparation against external disruptions such as "wood shock.

Sumitomo Forestry aims to improve its productivity in wood manufacturing and ensure a stable supply of wood products, thereby strengthening its price competitiveness. In addition, we will promote the creation of employment opportunities for forestry workers by increasing the added value of wood and the use of domestic timber, and contribute to decarbonization by increasing the period of carbon storage.

*By cascading the use of wood through applications such as timber use, energy use, and chemical use, the value of wood is enhanced, enabling long-term carbon storage.

Promoting the Use of Unused Forest Resources

Unused forest resources include trees left in forests as they are not suitable for use as timber as well as wood from thinning in forests. Following the introduction of the Feed-in Tariff (FIT) system for renewable energy, wood biomass power generation plants are operating in each area, and the demand for wood biomass is growing. By using unused forest resources, we can effectively increase the value of forests, while also promoting the use of renewable energy. In fiscal 2025, the Sumitomo Forestry Group used 401,000 tons of unused domestic forest resources at its power plants. We will continuously work to build a system for the efficient, stable collection of unused forest resources.

Use of unused forest resources from
domestic forests (2025)

401,000 tons

First Use for a Condominium of our Exterior Decorative Material Made from Japanese Cedar, SUSTIMBER-Gaiheki

SUSTIMBER-Gaiheki is an exterior decorative material developed by Sumitomo Forestry. It was adopted for Clio-Sakurashinmachi The Classic, a condominium developed by MEIWA ESTATE Co., Ltd. in Setagaya-ku, Tokyo.
SUSTIMBER is an exterior decorative material made from domestic cedar wood and coated with weather-resistant paint which helps to maintain the building’s aesthetic appeal for a long period. The material is used on the exterior walls (gaiheki) of the second and third floors of the condominium.

We will continue to leverage the results of the research conducted and the knowledge accumulated at the Sumitomo Forestry Tsukuba Research Institute to promote the use of wood in the properties developed by ourselves as well as for the residential and non-residential buildings constructed by other companies.

Utilization of Wood Resources

Converting Waste Wood Resources into Wood Chips

The Sumitomo Forestry Group contributes to resource recycling by converting offcuts generated during the wood milling process and wood waste from new housing construction and demolition sites into wood chips for use as a raw material for products such as paper and particle boards, and also as a fuel for power-generating boilers and other equipment.

As demand for the supply of fuel for biomass power generation continues to rise, we aim to further expand the use of waste wood as fuel by converting not only offcuts and wood waste but also thinned wood and other unused forest resources into wood chips.

Starting the Manufacture and Sale of Wood Pellets in Indonesia

Sumitomo Forestry entered the wood pellet manufacturing and sales business in Indonesia, and in January 2025 started the commercial production of wood pellets at PT. Biomassa Lestari Nusantara (BLN), a joint venture established with PT. Dharma Energi Investama in Indonesia.
BLN collects wood offcuts, unused small-diameter logs from nearby wood processing factories and forests, and other materials deemed useless in the past as raw materials to manufacture wood pellets. All pellets manufactured by BLN are purchased by the Sumitomo Forestry Group and then sold primarily to biomass power generation plants in Japan.
The production volume is 60,000 tons per year in the first phase and will be increased to 120,000 tons per year in the second phase, or by the end of 2026.
The Sumitomo Forestry Group promotes the cascade utilization of wood by making full use of wood with no waste in its business activities, thereby maximizing the value of wood for decarbonization.

Producing Woody Bioethanol by Using Construction Waste

Sumitomo Forestry has concluded a basic agreement on the production of woody bioethanol with Rengo Co., Ltd. We will use wood offcuts from the company’s housing construction sites to produce bioethanol as a raw material for sustainable aviation fuel (SAF). We are targeting the commercial production of 20,000 kiloliters of bioethanol per year.

Furthermore, Sumitomo Forestry is considering converting the construction waste generated at its housing construction sites around Shizuoka Prefecture into a CORSIA-certified material for fuel. In addition, we are also looking into producing a material for housepaint with the lignin generated in the conversion process. By building a business model that makes full use of wooden resources, we will contribute to the effective use of carbon-neutral wood and the reduction of CO₂ emissions.

We will pursue the possibilities of wood for use as biomass chemicals and biomass fuel to maximize the value of forest resources and decarbonize all of society.