Jump to content

Vapo to enhance the efficiency of its land use

Vapo Oy currently owns approximately 100,000 hectares of land and additional leased areas. The land owned by the company includes land suitable for peat production, but also forest land, former peat production areas that are suitable for agricultural use, as well as various reserves and supporting areas for production areas. 

In summer 2016, Vapo Oy had approximately 35,000 hectares of land in peat production. About one third of this total was leased from other land owners. Obtaining new peat production permits for the right geographical locations has become substantially more challenging in recent years. The company owns certain underused land areas acquired for peat production in some regions while suffering from a shortage of suitable raw material sources in other regions.

For these reasons, Vapo Oy has initiated a survey aimed at optimising the company’s land ownership in accordance with its future needs. Raw material resources will be evaluated not only in terms of the current use of peat, but also with an eye on the expected future uses of peat.

The goal is to implement an ownership arrangement in which Vapo gives up nearly all of its land ownership and continues to utilise its previously owned land as a tenant.

Vapo Oy has selected Sisu Partners Oy as its advisor in this project, largely because the company has an in-depth understanding of Vapo and its needs, as well as excellent client references and investor contacts in Finland and internationally.

According to Pasi Koivisto, Business Area Director for Vapo Fuels, the goal is to complete the arrangements concerning Vapo Oy’s land assets by next summer. “The potential changes in land ownership structure will not result in any changes to our existing practices regarding land use. Vapo Oy will continue to be responsible for its production areas in the same way as before, regardless of the land ownership arrangement used. Vapo Oy will apply for production permits and assume responsibility for the design and construction of water treatment systems and compliance with monitoring obligations pursuant to permit conditions,” Koivisto explains. “In peat production, land-related know-how will continue to be a core area of expertise regardless of who owns the land,” he adds.

Koivisto says the change is primarily aimed at achieving flexibility and efficiency in raw material sourcing, enhancing balance sheet efficiency and releasing capital from excess land assets for use in business development.

More information: Pasi Koivisto, Business Area Director, Vapo Oy, tel. +358 20 790 5829