Swedish furniture giant Ikea has purchased 42,000 acres of pine forestland in East Texas and 18,000 acres in Southeastern Oklahoma - nearly doubling its land in the U.S. Ikea strategic partner Ingka Group was behind the acquisitions.
“Ingka Group is pleased to continue our forestland acquisitions in the U.S, as we see a good match between what the market has to offer and our high standards related to responsible forest management," said managing director Krister Mattsson. "The proximity to our current ownership also makes this an efficient addition to our current holdings."
Ikea did not disclose how much it paid. In July, the retailer acquired 17,000 acres of land in South Carolina for $58 million. And in early 2018, the company purchased 25,000 acres of land in Alabama - marking its first purchase of American forestland. Ikea now owns around 125,000 acres of forest in the U.S.
Ikea is currently set to open its first retail store in Mexico and a supporting 161,000-square-foot service center. Both are scheduled to open in 2020.
The company recently closed its only U.S. manufacturing plant in Danville, Virginia - laying off 300 workers and citing high material costs. The 930,000-square-foot manufacturing plant opened in 2008.
“We made every effort to improve and maintain the competitiveness of this plant – unfortunately the right cost conditions are not in place to continue production in Danville,” Bert Eades, site manager, Ikea Industry Danville, said in a statement.
Ikea recently invested $220 million on a "climate positive" sustainability strategy, which includes investments in green energy, reforestation, and forest protection efforts.
"Our ambition is to reduce more greenhouse gas emissions in absolute terms by 2030 than the entire IKEA value chain emits, while growing the IKEA business," said Inter IKEA Group CEO Torbjörn Lööf. "To reach this goal, we will continue to invest in areas that create impact. This investment will speed up the transition to using renewable energy across our supply chain and remove carbon from the atmosphere through reforestation and better forest management practices."
The company hopes its customers will notice its green push and reward it, as its operating profit fell 10 percent over 2019 to $2.2 billion. The loss appears to be largely due to the new sustainable initiative.
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