Buying 19 Russian Far East forestry companies — and the invasion five weeks later (2022)

Four million hectares cannot be brought home

At the core of this investment was not the question of where to buy timber but of whose hands to leave the swing in costs in. Since taking First Wood as a subsidiary in May 2014, Iida Group Holdings had widened the scope of in-house supply to window frames, fixtures and materials distribution. In the year after being shaken by the wood shock, the decision to put some four million hectares in Khabarovsk on its own books follows as an extension of that. Even the terms — a 75% stake — were secured over more than two years in order to hold the decisions from felling through milling in-house. The only difference from what had gone before was that the volatility it had been leaving to the market was moved inside a single country.

Taking control, however, also means carrying the decision of when to get out once conditions change. Trade with RFP amounts to only some ¥2bn a year, so stopping it would have little effect on consolidated results. Even so, the party that has committed roughly $546.5M (¥60bn) cannot simply let go of the holding, and this investment first moved as a number four years later, in the impairment for the year to March 2026. Procurement that walks back up the supply chain works only while the upstream and the downstream sit inside the same institutional order. What Iida Group Holdings now holds is not the volatility of timber prices but an asset whose timing and manner of exit it cannot decide for itself.