Kushiro Wood Products, established by Cypress Sunadaya and Chubu Electric Power, engages in lumber business in Kushiro, Hokkaido

Cypress Sunadaya Co., Ltd. (Headquarters: Saijo, Ehime; President: Yutaro Sunada), which is a group company of Obayashi Corporation (Head Office: Minato-ku, Tokyo; President and CEO, Representative Director: Toshimi Sato), and Chubu Electric Power Co., Inc. (Headquarters: Higashi-ku, Nagoya; President & Director: Kingo Hayashi), announced in a press release dated July 1, 2024, that the two companies would begin preparations to launch a business for the production and sale of structural timber for residential use in Kushiro City, Hokkaido, with a target start date of April 2027.

On November 26, 2024, we established a new company, Kushiro Wood Products Corporation ("Kushiro Wood Products"), thoroughly verified the business scheme, revised part of the plan, and decided to aim for commercial production to start in April 2028.

Image of log yard (Photo: Cypress Sunadaya Toyo Industrial Park mill)

1 Current status of the domestic lumber market

The domestic market for structural timber for residential use is dominated by foreign products in terms of price and strength. Because of this, even when the time comes to harvest Japan's abundant forest resources, most of them are not being put to effective use, limiting their contribution to the recycling of forest resources and the realization of a decarbonized society.
In addition, many domestic laminated wood manufacturers rely on imports from Europe for their raw material, "laminar (sawn lumber)", and due to exchange rate fluctuations and the current uncertain global economic situation, it is difficult to predict stable procurement.

2 Overview of Business Scheme

Kushiro Wood Products will establish Japan's largest sawmill in Hokkaido, equipped with European-made lumbering machinery and kiln dryer. It will manufacture laminar from Hokkaido-grown logs such as Todo-fir, which are of the same quality as imported wood, and sell it to domestic laminated wood manufacturers. In addition to laminar, the company plans to sell dimensional lumber (2 x 4 lumber) and other products manufactured at this mill to housing manufacturers and other customers.
At the time of the announcement in July 2024, the initial plan was to establish a new laminated wood factory equipped with a laminated wood production line to mainly manufacture and sell laminar for residential structures, in addition to the above-mentioned sawmill. However, after verifying the profitability of the business, it was decided not to establish the laminated wood factory and instead to specialize in the manufacture and sale of laminar and dimension lumber.

Left: Todo-fir laminar for laminated wood (main product) Right: Architectural rendering of lumber mill line

In order to secure distribution volume and reduce costs, the mill will introduce large European-made machinery to enable mass production and stable supply. This will enhance its competitive advantage over imported woods in terms of quality, price, and distribution volume, leading to the promotion of domestic materials by housing manufacturers.

We will engage in lumber business in Kushiro, Hokkaido, with the goal of expanding the domestic lumber market, thereby contributing to the realization of a decarbonized society, the preservation of forest cycles, and the revitalization of the local economy.

Outline of sawmill

(Reference) New company: Kushiro Wood Products