Sumitomo Forestry Co., Ltd.
1911・Prime Market・Construction
Timber and Building Materials Business
A foundational group business handling procurement, manufacturing, processing, and sales of timber and building materials
| Period | Current | Previous | Change |
|---|---|---|---|
| Sales (including intersegment) | ¥56,429 million | ¥58,245 million | ↓ |
| Sales to external customers | ¥51,403 million | ¥53,587 million | ↓ |
| Segment ordinary income (loss) | -¥1,058 million (ordinary loss) | ¥564 million (ordinary income) | ↓ |
Business Details
This segment procures, manufactures, processes, and sells timber (logs, chips, sawn lumber, laminated lumber, etc.) and building materials (plywood, fiberboard, wood-processed building materials, ceramic building materials, metal building materials, housing equipment, etc.). It comprises the domestic distribution business and domestic/overseas manufacturing businesses (Indonesian plywood, Vietnamese particleboard, U.S. sawmilling, etc.), and also contributes to value chain integration by supplying materials to the group's housing business. Key affiliated companies include Sumirin Crest Co., Ltd., PT. Kutai Timber Indonesia, and Nelson Pine Industries Ltd.
Recent Overview
Reorganization of domestic distribution and production delays at the U.S. sawmill led to lower sales and a swing to an ordinary loss
In Q1 FY2026 (January-March), the Timber and Building Materials Business posted sales of ¥56,429 million (down 3.1% year on year) and an ordinary loss of ¥1,058 million (compared with ordinary income of ¥564 million in the same period of the prior year). In addition to the decrease in sales resulting from the transfer of consolidated subsidiary shares to Geo-Live Group Corporation as part of the reorganization and strengthening of the domestic distribution business, production delays at the U.S. sawmill acquired in the prior fiscal year weighed on earnings, causing a swing from profit to loss. Note that following the organizational restructuring in January 2026, reportable segments were reorganized into five categories, and prior-year comparisons are based on the revised segmentation.
Key Products
Growth Drivers
- Full-scale realization of group synergies (timber supply to the housing business) as production normalizes at the U.S. Louisiana sawmill
- Establishment of an independent supply chain for the distribution business through the capital and business alliance with Geo-Live Group Corporation
- Advancement of the timber combinate business through the operation of the domestic cedar sawmill in Iwaki City, Fukushima Prefecture
- Capturing demand for interior building materials backed by solid orders and sales in the domestic housing business
- Boost to ordinary income from negative goodwill arising from domestic and overseas M&A
Risks
- Continued weakness in timber and building material sales due to an ongoing decline in new housing starts in Japan
- Cost pressure from persistently high raw material prices (timber, plywood raw materials, etc.)
- Risk of declining sales volume in the Indonesian plywood business and price declines in Vietnamese particleboard
- Impact of U.S. trade policy (tariff increases) on timber procurement costs and export conditions
- Risk of prolonged production delays at the U.S. sawmill
- Environmental lawsuit against Indonesian subsidiary PT. Mayangkara Tanaman Industri (MTI) (filed January 2026, claim amount equivalent to ¥3,234 million)
Last updated: May 8, 2026