NEW YORK (TheStreet) -- Ikea is making moves to gain control over its raw materials. The flat pack furniture giant has purchased woodland in Romania and the Baltics to coordinate its own forestry management and wood production.
The Swedish company's investment will allow the retailer to stabilize its timber costs, at a time when prices are on the rise. Ikea has been vocal about its commitment to sustainable and low-cost production. Back in 2012 it announced a sales target of $55 billion by 2020, almost double its production volume requirements.
The company's forest acquisition in the Baltic states totals almost 10 thousand acres and, according to reports, Ikea is also looking to buy in several other other markets. As part of its sustainability targets Ikea's designers are working on utilizing as much of the tree as possible to minimize waste.
This also involves altering the density and thickness of certain designs. Recycled wood is becoming a larger part of the manufacturing and designs. In addition, by 2020 the company is aiming to use only recycled or certified sustainable timber in all of its products.
Ikea caused controversy last year when it was banned from logging in Russia's Karelia forest. The Forest Stewardship Council, or FSC, accused an Ikea subsidiary of violating its sustainability agreement. The suspension was lifted a month later.
An Ikea spokesperson told The Wall Street Journal: "We are committed to responsible forestry and to the principles of the FSC. In accordance with our forestry standards, we do not harvest in high-conservation-value forests-as defined by the FSC unless they are certified as responsibly managed."
Ikea's woodland portfolio now includes forest in Estonia, Latvia and Lithuania. At its current rate the furniture giant used around 530 million cubic feet of wood last year, minus its cardboard and packaging requirements.