Our Group companies KTI and VECO distribute free tree seedlings to local communities guaranteeing that the companies will buy logs as raw materials at the current market value once the seedlings grow into harvestable woods. In November 2015, KTI's aforementioned operations were recognized by the Indonesia Ministry of Environment and Forestry and awarded the Minister's Prize for contributing to local communities by generating stable income while protecting communal societies as well as environments.

KTI organized Koperasi Serba Usaha Alas Mandiri KTI (KAM KTI)^*, which is a community forestation cooperative association. In 2008, KTI obtained the first FSC®-FM certificate for the 152-hectare planted forest and has expanded its certification to 1,005 hectares in 2015. Koperasi Bromo Mandiri-KTI (KBM KTI)^*, which is a second reforestation cooperative with the same certification, acquired a certificate for 206 hectares in January 2017. In 2021, the area expanded to 1,330 hectares and it has been supplying logs to KTI. The area of certified forest has reached a total of 2,335 hectares. These certified forests will strengthen the manufacture and sale of products with high environmental value based on a growing supply of certified timber.

* KAM KTI: FSC-C023796, KBM KTI: FSC-C133562

Since 2013, Sumitomo Forestry has teamed up with the Japan International Cooperation Agency (JICA) to engage in forest management activities with Dien Bien Province in Vietnam, including forest conservation and planting of deforested areas. Our comprehensive support has also included livelihood assistance to help reduce excessive dependency on forests. Among Vietnam's poorest areas, Dien Bien has suffered severe forest depletion due to practices by local residents such as expansion of farmland and burning of fields. Given its importance as the location of a hydroelectric generator dam and sources of water crucial for all of Vietnam, however, we assist with a portion of the support that JICA provides to the province, such as the formation of organizations to protect forests, conservation activities, forest planting, fruit tree and vegetable cultivation support, as well as helping to provide feed for fish and livestock. This project ended in fiscal 2020, and Sumitomo Forestry supported it for approximately seven years. Our work, such as providing a total of roughly 45,000 seedlings to the local people, contributed to the revitalization and conservation of forests in the region, including about 29 ha of reforestation across six sites.

In Dien Bien Province, where open livestock grazing has been the local custom, the resulting damage to planted tree seedlings has become an issue as it prevents them from taking root and growing. Sumitomo Forestry is therefore promoting a forestation model that introduces the use of protective barriers. The seedling survival rate has increased compared to previous forestation models, thus confirming the effectiveness of the forestation model using protective barriers. The results have been acknowledged by the provincial Rural Agricultural Development Bureau, and received an award in October 2018.