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Vapo to become a shareholder in Harvestia

Vapo Oy strengthens its fuel wood business and combines its wood procurement organisations by acquiring one third of Harvestia’s share capital.

According to the wood procurement contract made in the acquisition, Harvestia will in the future procure the pine and spruce logs required by Vapo as well as an increasing share of the fuel wood required by Vapo. This arrangement will improve the shared use of Finnish fuel wood, timber, and peat, as well as Vapo’s ability to serve its clients. In the acquisition, the Vapo Timber wood procurement organisation and business will become a part of Harvestia. The operations will already start in full scale from the beginning of January 2011.

“It is very important for Vapo to be able to maintain the company’s cost competitiveness and delivery reliability in the vastly expanding field of the procurement and delivery of wood fuel. Harvestia has quickly established itself in industrial wood procurement. Our objective is to grow our fuel wood business in pace with the growth of the market, according to the European Union’s emission reduction targets,” says Esa Koivula, the Business Area Director of Vapo Biofuels.

“We wanted to ensure the wood management of the sawmills and the continuous service of our clients by partnering with Harvestia. This will secure in the future the raw material management of the recently decided investment in the Hankasalmi sawmill. In addition to Hankasalmi, we have sawmill operations in Nurmes, Lieksa, and Peuravuono in Inari,” says Juha Hakala, CEO of Vapo Timber.

“Vapo uses approximately 1.5 million logs and supplies approximately one million square meters of fuel wood to its clients. Combined with these, the pulpwood procurement of Myllykoski and Savon Sellu corresponds well to the felling opportunities provided by the Finnish forests. Harvestia will be even more active in purchasing stands marked for final and intermediate cutting as well stands marked for fuel wood. Our ability to offer the forest owners all-around service is therefore improved. The total amount of timber is estimated to increase to five million square meters. Together, Vapo and Harvestia will build a competitive supply chain for the procurement of fuel wood,” says Pekka Kauranen, CEO of Harvestia.

Approval from the competition authorities is required for the contract to come into force.
For more information, please contact:
– CEO Juha Hakala, tel.+358 40 585 2332, Vapo Timber
– Business Area Director Esa Koivula, tel. +358 40 702 4728, Vapo Biofuels
– CEO Pekka Kauranen, tel. +358 500 442 062, Harvestia

Vapo is the leading supplier and developer of bioenergy in Finland and the Baltic Sea area. The four business areas of the Group are Vapo Biofuels, Vapo Bioheat, Vapo Environment, and Vapo Timber. The Finnish Government owns 50.1 per cent and Suomen Energiavarat Oy 49.9 per cent of the share capital of the parent company Vapo Oy. Vapo is a modern expert organisation that produces energy from peat, fuel wood and field biomass and supplies sawn goods and environmental business solutions. In its market area, Vapo is an integral part of the local energy infrastructure.

Harvestia Oy procures the raw wood material required by its owner companies Myllykoski, Savon Sellu, and, in the future, Vapo. In addition, the company procures wood for its cooperation partners. The focus of the wood procurement operations is in Central, Eastern and Southern Finland.