Swedish group IKEA buys forests in Romania

Swedish furniture producer and retailer IKEA Group has decided to buy 33,600 hectares of forests in Romania, thus consolidating its investments in the country. The acquired woodlands are mainly located in central and north-eastern Romania. IKEA hasn’t disclosed the value of this investment, but given that forests in Romania sell for EUR 3,000 to EUR 4,000, according to data available in the market, the Swedish group might have spent about EUR 100 million. Romania thus becomes the first country in which it has the whole cycle, starting with its own timber resources, furniture production via its direct cooperation with Romanian suppliers, and ending with the retail business via its stores. “The investment in woodland is a way for us to diversify our assets. We are happy to expand our forestry activities to Romania, a country that’s important for our furniture production,” said Frederik de Jong, Chairman of the Board, IRI Investments SRL, IKEA’s subsidiary that manages this investment. According to IKEA’s representatives, the group works with over 20 suppliers in Romania, which produce sofas, armchairs, tables, chairs, baby articles and pottery. “More than 14,000 people work for our suppliers in Romania, and the value of the products IKEA group purchases from Romania is over EUR 400 million per year,” said Violeta Nenita, Purchasing Operations Manager South East Europe IKEA Purchasing. IKEA’s retail division operates a store in Romania, located in northern Bucharest, which opened in 2007. The group recently purchased a land plot in eastern Bucharest for a second store. IKEA Romania had a turnover of EUR 88 million and a net profit of EUR 2.5 million last year, according to official data from the Finance Ministry. The company has 470 employees. Ikea Romania makes 7% of its sales online IKEA reveals location of its second store in Romania Andrei Chirileasa, andrei@romania-insider.com