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Stora Sandön investing in long-term forest ownership in Latvia
Per Wendenfeldt visiting Latvia with his team from Stora Sandön. Photo: Private
In autumn 2023, Per Wendenfeldt took the step of investing in Latvian forest through his company, the Stora Sandön Group, a Swedish investment and management consultant company. The goal was to have at least 1000 hectares of forest and a continual return of six percent within five years. Two and a half years into the journey, we were curious about how things are going.
Per Wendenfeldt
“Today, we own a total of 21 forest properties, and we’re ahead of our plan to own 1000 hectares. The market situation in Latvia has been good in the past year,” says Per Wendenfeldt.
Within one year, Stora Sandön had already bought nine forest properties in the centre of the country.
“Many properties in Latvia are small. Today, we have two clusters around which we concentrate our purchases. In the past year, we have looked at and assessed some sixty properties and decided to buy twelve of them.”
Location and return potential important
Per Wendenfeldt explains that the three purchasing criteria they always apply are the property’s location, return potential, and the forest properties.
“For us, it’s important that the stand contains a good mix in terms of both tree species and age class distribution, that the property is close to our existing holdings, and that we can attain a return of six percent quite quickly,” he explains.
Building values
In the beginning, much of the mediation was done via Skogssällskapet’s personnel in Latvia, but once Stora Sandön had become established in Latvia, tips about suitable properties started coming directly to Per.
“I think the rumour spread that we are working long term with the forest. This has meant that some older people want to sell forest directly to us, because we work with building values and focus more on thinning and pre-commercial thinning than final felling.”
In Latvia there are examples of buyers that prioritise quick business, harvesting everything that can be felled before putting the property on the market once again.
“The Stora Sandön Group buys for long-term ownership, we don’t buy to sell. And I think people like that. That’s also something that fits in well with Skogssällskapet, working long term and creating values.
Joined the local hunting team
Per has joined the local hunting team and tries to participate in hunting when visiting.
“Our holding is close to Cēsis in central Latvia, where you can hunt moose, red deer, roe deer, and wild boar. There are also a lot of beavers in Latvia, so the population must be culled through hunting. The local hunting teams often help landowners by breaking up the beaver dams.”
In many ways, the landscape resembles northern Skåne and – apart from beaver hunting – the hunting is like that in Sweden. We wonder how the other hunters look on him as a ‘foreigner’.
“It’s pretty much the same as when Stockholmers come to Norrland – half of the team think it’s great and half wonder what you’re doing there,” he laughs.
After many years as CEO of what is now Business Sweden in Russia, Per can speak Russian, which makes it easy to communicate with many Latvians. This has opened doors, but he also emphasises that Latvia generally is a very open country.
“It’s a clear advantage if you want to move there as a foreigner and invest. And once you get to know the people, they are very open and generous.”
As well as hunting, Per Wendenfeldt also practices enduro, an interest he has taken with him to Latvia.
“I’ve actually built a small enduro track in the forest and have a motorbike standing there so I can train when I’m visiting.”
Financial support for afforestation
After the fall of the Soviet Union, a lot of farmland was abandoned in Latvia, and there is substantial financial support available for afforestation and young forest management for landowners, a scheme that Stora Sandön has taken advantage of.
The properties that Stora Sandön buys are managed by Skogssällskapet personnel in Latvia, a collaboration that Per says works very well.
“Skogssällskapet helps with all the administration around forest investments and then takes care of everyday forestry and management of the forest. I have every confidence in Skogssällskapet when it comes to both forestry and wood sales. It’s clear that the local office in Latvia keeps a close eye on the wood market and gets good prices for its clients,” he concludes.