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Forestry Business Overseas
Basic Policy
The Sumitomo Forestry Group is expanding its forestry business in consideration of local communities and the environment. The Group contributes to a stable supply of wood and regional economic development while maintaining a wider environment through the management of "working forests" which are planted forests for wood production and the preservation of "conservation forests", which are essential for ecosystem conservation and CO2 absorption and fixation, as well as through coexistence with surrounding local communities.
Overseas Managed Afforestation Area (unit: ha)
| Country | Name of Forestry Business | Managed Area | Production Area | Afforestation Area in FY2025 |
Logged Area in FY2025 |
|---|---|---|---|---|---|
| Indonesia | PT. Mayangkara Tanaman Industri (MTI) | 70,584 | 10,563 | 1,177 | 1,750 |
| PT. Wana Subur Lestari (WSL) | 40,751 | 11,545 | 2,601 | 2,517 | |
| PT. Kubu Mulia Forestri (KMF) | 9,270 | 5,440 | 1,101 | 298 | |
| Jelai Lestari Abadi (JLA) | 29,794 | 10,264 | 0 | 0 | |
| PT. Kutai Timber Indonesia (KTI) | 3,800 | 3,800 | 33 | 166 | |
| PT. Bina Ovivipari Semesta (BIOS) | 9,797 | 0 | 0 | 0 | |
| Subtotal | 163,996 | 41,612 | 4,912 | 4,731 | |
| Papua New Guinea | Open Bay Timber Ltd. (OBT) | 31,260 | 11,681 | 290 | 201 |
| New Zealand | Tasman Pine Forests Ltd. (TPF) | 35,665 | 27,637 | 770 | 959 |
| Total | 230,921 | 80,930 | 5,972 | 5,891 | |
Forestry Business Overseas
The Sumitomo Forestry Group is taking three approaches to forestry business; industrial tree plantation, environmental reforestation, and social forestry. The purpose of industrial tree plantation is to produce wood and increase the supply of raw materials from planted forests. By zoning its managed land appropriately, the Group aims to achieve both the conservation of valuable ecosystems and the development of local communities through forestry business.
In addition, the Group conducts environmental reforestation, planting trees for environmental conservation. It aims to contribute to environmental conservation through the expansion of forested areas and the fulfillment of the ecosystem services function of forests, by actively planting trees on land where natural regeneration would be difficult.
The Group has also been engaged in "social forestry" which shares the economic benefits of afforestation with local communities while enlisting the cooperation of local residents.
Distribution and Area of Overseas Forestry Business Sites (as of end of December 2025)
Forest Certification and Sustainable Forestry Business
For about two-thirds (about 20,000 hectares) of approximately 31,000 hectares of planted forests owned and managed by Papua New Guinea‘s Open Bay Timber (OBT), OBT has received FSC® forest certification*. After harvest, the company ensures afforestation is carried out, and in fiscal 2025, 290 hectares of trees were planted.
Also, the entire area of approximately 36,000 hectares of forests managed by Tasman Pine Forests Ltd. (TPF) in New Zealand has been FSC®-FM certified*. In fiscal 2025, TPF implemented 770 hectares of afforestation.
We will continue to practice sustainable forest management in harmony with local communities and environment.
*OBT holds CW certification FSC-C019117, FM certification FSC-C103694 and TPF holds FM certification FSC-C132002
Forestry Business in West Kalimantan, Indonesia (Industrial Tree Plantation)
In 2010, Sumitomo Forestry established PT. Mayangkara Tanaman Industri (MTI) and PT. Wana Subur Lestari (WSL) in collaboration with Alas Kusuma Group, an Indonesian forest management and plywood manufacturing company. They launched large-scale afforestation projects in West Kalimantan Province under "License for Industrial Afforestation and Timber Product Utilization Project (UPHHK-HTI)*1" issued by the Indonesian Ministry of Environment and Forestry. Regarding the management form, the investment ratio was sequentially increased, and WSL and MTI became 100% subsidiaries of the Sumitomo Forestry Group in July 2021.
In addition, since 2020, we have started forestry business at Kubu Mulia Forestry (KMF), which is close to WSL and MTI.
Since 2022, PT. Bina Ovivipari Semesta (BIOS) (Headquarters: Kubu Raya District, West Kalimantan Province, Indonesia) has been working to create blue carbon credits through conservation of mangrove forests.
Background
The afforestation sites of WSL, MTI, and KMF cover areas in which forest degradation has advanced due to commercial harvesting from the 1960s to the mid-1990s in addition to repeated illegal logging and slash-and-burn farming practices.
We believe that from a sustainability perspective, it is a very significant project to responsibly conserve forests with high conservation value and provide local residents with an economic foundation through our business, while producing wood as a profit-making activity on these types of lands.
The land used in these operations is located in tropical peatlands which play an extremely vital role in the carbon and water cycle on a global scale.
Sustainable Forest Management
We launched these operations by conducting topographical surveys, and boring tests to understand the peat distribution, over five years. Based on the survey results, sustainable water storage-type peatland management was achieved by creating waterways and dams that were designed with consideration of the terrain.
We also entered into an advisory agreement with the International Finance Corporation (IFC), a World Bank Group institute, in 2012. In accordance with the concept of High Conservation Value Forests (HCVF)*2, Sumitomo Forestry conducted assessments on its operational properties with the IFC and investigated whether the property use plan is implemented as stated and adequate consideration is given for biodiversity and the livelihood of local residents. The survey report has also undergone peer review by a third-party organization, and the valuable feedback from these stakeholders has contributed to zoning areas for forest conservation and afforestation projects, management according to each area's role, and the establishment of "green corridors" that allow rare wildlife to move freely. Our Group also held public hearings in 2013 where stakeholders such as local residents, companies in the communities, academics, NGOs, and government officials were invited to share the results of the investigations.
Our employees' unified efforts have succeeded in building a unique peatland management model that stabilizes the underground water level throughout the year. Stabilization of the underground water level helps reduce greenhouse gas emissions and forest fires, while maintaining proper hydrological cycles, thereby making a significant contribution to climate change mitigation. Our peatland management model has been highly praised worldwide.
These and surrounding areas also isolate ecosystems where rare plant and animal species live in an island-like shape. To prevent this type of isolation, the Sumitomo Forestry Group works together with neighboring local business proprietors to preserve the entirety of the ecosystem.
The Sumitomo Forestry Group regards tropical peatlands and the ecosystems existing throughout the peatlands as one type of important natural capital. Going forward, we will conduct business while achieving a balance between industrial tree plantations and environmental protection, thereby enhancing their value as natural capital and helping resolve global issues.
*1Business license issued by the Indonesia government. It is required for engagement in industrial tree plantation operations in Indonesia
*2Under this concept, forests are evaluated objectively based on their diverse values, including not only their value as absorbers of greenhouse gases but also as habitats for rare, endangered animal species, as water resources, as providers of essential natural services such as soil erosion control, and as land that has an intimate relationship with the lifestyles and cultures of local communities.
History of Enhancing the Value of Natural Capital
According to the Annual Report on the Environment, the Sound Material-Cycle Society and Biodiversity in Japan 2014, natural capital means the stock of soil, water, air, forest and other bioresources created by nature.
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Forest Fire Prevention Measures at Each Work Site
Indonesia
Conventionally, reforestation in peatlands*1 was done by managing the water level with drainage to push water out of the soil. However, while drainage-type water level management works well for plants, it has dried out the land, decomposing organic matter in peat soils and releasing greenhouse gases, as well as leading to large peat fires that are difficult to extinguish.
WSL and MTI, on the other hand, manage stored water levels based on precise surveys and peat studies, thereby maintaining a water level that allows plants to grow while preventing the land from drying out.
Real-time measurements of peat thickness have revealed that peat thickness has not decreased in the long term as a result of previous efforts. In other words, it reduces peat-related greenhouse gas emissions while also helping to avoid fires.
Sumitomo Forestry is implementing a demonstration project to restore and manage degraded peatlands in Central Kalimantan Province based on the memorandum of agreement concluded with the Japanese Ministry of the Environment and the former Indonesian Ministry of Environment and Forestry, on the memorandum of cooperation and the basic cooperation agreement between Sumitomo Forestry Indonesia and the Indonesia Ministry of Forestry and under the G-to-G framework.
The demonstration project area is located within an area where the Mega Rice Project*2 was carried out and where peat fires have frequently occurred due to the improper water channel design of that time, when not enough knowledge was available for the design.
For three years from 2025, based on the peatland management technology that it developed in West Kalimantan, Sumitomo Forestry will work to obtain peatland data in the project area, create highly precise local maps by using AI, drone and other advanced technologies, and foster infrastructure development, tree planting, and forest management toward the sustainable management of the peatlands in the area. The project is intended for technological demonstration, economic demonstration, reduction of fire risks, measurement of greenhouse gas emissions, establishment of a method to reduce the emissions, and improvement of regional socioeconomic situations. Also, we are implementing the project for the global standardization of GHG emission reduction methods, with a focus on the Joint Crediting Mechanism (JCM) methodology and the future issuance of JCM credits. We are implementing this project, being subsidized by the Japanese government under the Global South Future-Oriented Co-creation Project (large-scale demonstrations in ASEAN member countries) implemented by the Ministry of Economy, Trade and Industry.
Regions where peatlands thrive, such as the Amazon, the Congo Basin, and Indonesia, have the largest amount of rainfall throughout the world. The soil of peatlands is made up of 80% to 90% water. Tropical forests and peatlands store a large amount of rainwater in the ground during the monsoon season and disperse the water into the air through evapotranspiration. The tremendous evapotranspiration from these rainforests and peatlands has the potential to act as a necessary water cycle function on a global scale. The collapse of the world's water cycle will result in abnormal weather and adversely impact agriculture, which will cause even greater food shortage issues. Sumitomo Forestry highlighted the importance of proper tropical forest and peatland management for the reason that these regions act as the “heart of the Earth” by circulating water throughout the planet at its presentation at the Seventh Tokyo International Conference on African Development (TICAD7) held in Yokohama in August 2019.
We are striving to establish a technology to globally manage tropical peatlands based on the concept of “simple, low-cost and easy maintenance.” We aim to achieve decarbonization, food security and disaster control by promoting this initiative as a reproducible model for the solution of global issues.
*1Peat soil found in peat swamps is known to emit enormous amounts of greenhouse gases, typically carbon dioxide and methane gas, if the soil is inappropriately exploited. Based on the results of joint research conducted by Japanese and Indonesian academic institutes, we are striving to minimize the dissolution of peat soil and resulting greenhouse gas emissions in our development projects.
*2In 1996, the Indonesian government launched a project aimed at converting one million hectares of peat swamp forest in the southern part of Central Kalimantan Province into rice paddies to address food security issues. The project ended in failure due to a lack of knowledge about peat ecosystems and management techniques. Later, repeated peat fires caused the forests to disappear, with only a small portion remaining.
Peatland management plan (to zone the land into plantable areas, animal trails, and conservation areas)
Monitoring the water level in peatlands
The Water Cycle in Peat Wetlands
Papua New Guinea
Open Open Bay Timber (OBT) keeps track of the fire hazard levels by analyzing temperature, rainfall, and humidity every day, as well as by preparing firebreaks and organizing forest residues to prevent the spread of fire in the planted forest. In areas with a high risk of fire, OBT increased the frequency of work site patrols from once to twice a day to meticulously check for signs of fire. Thanks to these initiatives, only two minor forest fires occurred in its managed forests in 2025.
New Zealand
Tasman Pine Tasman Pine Forests (TPF) is working with New Zealand’s national fire authority Fire and Emergency New Zealand (FENZ), local municipalities, neighboring forestry associations and other relevant agencies to continuously conduct awareness-raising activities about fire in the local community, in addition to taking other proactive fire prevention measures. Specific measures include setting up a Fire Index bulletin board that shows the fire risk level; distributing leaflets to evoke caution in the local community; creating a system to always have fire-fighting helicopters on standby when the risk of fire is high; stockpiling fire extinguishing agent; appropriately placing and managing water reservoirs; intensively pruning at forest edges to prevent the spread of fires; purchasing fire-fighting equipment and providing relevant training; conducting patrols; and improving forest roads. On days with a significantly high risk of fire, TPF imposes various restrictions, including limiting the logging hours and restricting entry to its forests for recreational purposes. Thanks to these initiatives, TPF achieved zero forest fires in its managed forests in fiscal 2025.
Mangrove Conservation Business
In December 2022, Sumitomo Forestry acquired 100% ownership of PT. Bina Ovivipari Semesta (BIOS), which owns and manages 9,738 hectares of mangrove forests, making it a wholly owned subsidiary. Sumitomo Forestry aims to create high-quality blue carbon credits by maintaining and managing the mangrove forests of BIOS, which are globally valuable ecosystems, as "conservation forests" rather than "working forests" that undergo a cycle of logging and afforestation.
We utilize the know-how we have cultivated over many years in the sustainable management of peatlands in West Kalimantan Province to engage in wide-area ecosystem conservation projects, regarding mangroves on the border between sea and land and peatlands and tropical forests in inland areas as connected ecosystems. By doing this, we will realize Nature Positive* through biodiversity conservation, water purification, and improvement of water retention and water circulation functions.
*To stop and reverse biodiversity loss and put it on a recovery track
Full view of mangrove forest of BIOS
Mangrove conservation activity
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