New Forests Makes First Foray Into Vietnam With Investment in Tavico Group

New Forests, a global investment manager of nature-based assets and natural capital strategies, announced on Wednesday that its Tropical Asia Forest Fund 2 (TAFF2) has made its first investment in timber processing infrastructure in Vietnam by investing in the Tavico Group (Tavico), one of Vietnam’s leading suppliers of solid wood lumber and logs.

Tavico was founded in 2005 as a log trader and sawn timber mill with annual production capacity of 12,000 m³ of lumber per year, which is equivalent to approximately 800 medium sized houses. Since then, Tavico has increased its annual production capacity to approximately 250,000 m³, equivalent to supplying wood for 16,500 medium sized houses. Tavico has also expanded its operations to include a distribution center, home furniture wholesale market, warehousing, and modular wooden home construction.

TAFF2’s investment in Tavico will seek to establish a platform for an integrated timber processing and plantation business across Laos, Cambodia, and Vietnam, using Vietnam as a focal point. Tavico will look to expand into higher-value segments including finger-joint panels, flooring, furniture, glue laminated timber, and FSC-certified wood pellets.

Tavico has established a 3,200-hectare (7,900-acre) FSC certified community forestry program with small holder farmers which provides employment and revenue sharing opportunities for local communities. The investment from TAFF2 will look to expand this program for smallholder farmers in Vietnam. Tavico’s ambitions for supporting and growing the availability and supply of high-quality, certified wood resources from community-based farms at scale aligns with New Forests’ and TAFF2’s vision to deliver sustainable, long-term livelihood impact through scaled, commercial activities.