KLP invests NOK 300 million in Norwegian forestry companies

13 July 2023

Investinor, KLP and the forestry industry are launching 3K6, a new investment fund that will invest in innovative companies within the Norwegian forest-related sector.

The fund, which is being established, will be the first of its kind in Norway. Investinor and KLP invest NOK 150 million each in the fund, while the forestry industry contributes assets through the company Shelterwood AS. The fund will be managed by Investinor, which has extensive experience with investments in the forest sector.

— Investinor will build tomorrow’s business world. The goal is to make Norway richer and the world greener. Sustainability and digitization create great opportunities for the traditional forest industry. But the need for competent capital and active ownership is great. That is why we are now establishing 3K6 together with leading private investors to ensure long-term industrial ownership and access to capital, says Acting Managing Director Ann-Tove Kongsnes at Investinor.

KLP’s CEO Sverre Thornes says that as a municipal and health pension company, KLP is keen to make good long-term investments and contribute to business development around Norway:

— Forests are an important natural resource with great potential as a sustainable input factor for value creation. We are pleased to be involved in establishing 3K6, which will be a fund that will invest in business development within the forestry sector in this country, says CEO Sverre Thornes of KLP.

Shelterwood is an investment company owned by key players in the forest industry as well as Investinor. It invests in companies in the early growth phase within the forest-related sector, and has, among others, Arbaflame and Store Norske Elementfabrikker in its portfolio.

— If Norway is to succeed with the green shift, we must invest in the renewable industries. Forest is one of them. We want to contribute to the transition towards a more sustainable future while creating growth and value creation in Norway, says Shelterwood chairman Anders Øynes.

Great potential for Norwegian wood

The volume of timber cut in Norway has increased in recent years. Around a third of the volume is exported. The export value is around NOK 80 billion over a 20-year perspective, while processing in Norway has an estimated value creation potential of NOK 3,600 billion in the same period. The fund’s name 3K6, an abbreviation for 3600, tells what the partners are working for: To reap the great values ​​that lie in the further processing and business development of Norwegian timber.

— Every year, Norway misses out on great value creation because we send untreated timber out of the country. By further processing timber, we can not only create great value, but also contribute to developing industrial workplaces and long value chains in Norway. This is green growth in practice, says Kongsnes.

A sector in strong growth

Several trends are working for Norwegian forests.

Sustainable construction is growing strongly, where wood is taking market share from other building materials and technical limitations for wood in construction have been greatly reduced.

At the same time, great progress is being made on the biochemistry and materials side, which means that renewable forest products can replace fossil-based products to a greater extent. This, in combination with increased automation and digitalisation, contributes to new market opportunities and increasing demand for the industry.

— In order to exploit the opportunities created by these trends, capital must be made available for profitable investments in the industry. The establishment of 3K6 is an important step on the way, says Øynes.

Source: KLP
Multiple reports with cicle diagram and text

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