Sumitomo Forestry America acquires Teal Jones Louisiana sawmill, strengthening North American lumber supply chain

Sumitomo Forestry's acquisition of a key sawmill in the southern United States will directly affect China's SPF and southern yellow pine import supply chain. After the transaction is completed, the price and logistics arrangements of timber exports to China may be adjusted starting from Q2 2025.

Sumitomo Forestry America acquires Teal Jones Louisiana Holdings sawmill

Friday,Sumitomo Forestry Co., Ltd.announced that its board of directors has agreed to acquire the shares of Teal Jones Louisiana Holdings, LLC (TJLH) 100% through its wholly owned subsidiary Sumitomo Forestry America, Inc. (SFAM) and will initiate procedures to make TJLH its consolidated subsidiary.

The acquisition will be conducted in accordance with procedures set forth in Canada's Companies' Creditors Arrangement Act and Chapter 15 of the U.S. Bankruptcy Code and is subject to approval by the Canadian and U.S. courts.

After completing all due diligence, SFAM hopes to complete the acquisition in the second quarter of fiscal 2025. In addition, since TJLH's capital exceeds Sumitomo Forestry's capital by 10%, TJLH will become a designated subsidiary of Sumitomo Forestry.

Teal Jones-Plain Dealing, LLC (TJPD) is a Louisiana-based sawmill and a consolidated subsidiary of TJLH. By acquiring TJPD as its wholly owned subsidiary, Sumitomo Forestry aims to expand its business and establish a stable material supply system for its overseas housing business and real estate business through sawmill operations and sales of wood products such as dimension lumber in the southern United States.

LumberFlow Expert Interpretation

Impact on Chinese importers:

The acquisition could strengthen Sumitomo Forestry's control over lumber production capacity in the southern United States, one of China's main sources of imported southern yellow pine.
In 2024, China's timber imports from the southern United States accounted for approximately 35% of the total US imports. The supply chain stability may be improved after the acquisition, but the price negotiation space may be affected by vertical integration.
It is worth noting that after the acquisition is completed in Q2 2025, Sumitomo may adjust its sales strategy to Chinese customers - its Japanese parent company already has a mature residential business network in China and may give priority to internal supply.

Logistics special analysis:

Louisiana sawmills are close to the Mississippi River shipping system and are expected to continue to export through the Port of New Orleans. The port-to-China route will account for 62% of southern US timber seaborne transport in 2024.
After the acquisition, the logistics system of Sumitomo's existing Georgia factory may be integrated. Chinese buyers are advised to pay attention to the changes in the booking cycle of 40-foot containers on the Gulf Coast.

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