Latvijas valsts meži (LVM), Latvia’s state-owned forest management company, has completed its largest land acquisition to date, purchasing nearly 5,000 hectares of productive forest in the eastern region of Latgale from Swedish owners.
Changes registered with the Register of Enterprises at the end of last week confirm that LVM has become the owner of two Latvian-registered companies whose sole assets consist of land previously owned by Swedish citizens.
Under Latvian law, the transaction required approval from the Cabinet of Ministers, which was granted on 30 June, the Ministry of Agriculture said.
As a result of the investment, LVM will take over the management of almost 5,000 hectares of productive forest land in Pasiene Parish, Ludza Municipality. According to the ministry, the acquisition will strengthen the long-term sustainability of Latvia’s state forests while providing additional high-quality timber resources for the country’s economy.
The total investment amounts to €26.385 million, representing an average purchase price of approximately €4,500 per hectare. The transaction covers 5,800 hectares of land, including around 4,800 hectares of forest.
The newly acquired forest consists primarily of spruce (approximately 1,600 hectares), birch (around 1,500 hectares) and pine (about 600 hectares), while the remaining area is covered by other tree species. Around 80 hectares are located within protected nature areas, and a further 600 hectares consist of agricultural land.
Minister of Agriculture Uldis Augulis described the acquisition as a strategically important investment with long-term benefits extending beyond forestry.
“This transaction will have a significant impact on sustainable forest management, regional economic development and national security. Managing such a large forest area will create long-term demand for local services, provide employment opportunities for Latvian companies, generate stable income for families in Latgale and stimulate economic activity along Latvia’s eastern border,” Augulis said.
He added that strengthening the state’s economic presence in Latgale is particularly important given the region’s strategic location.
“In the coming years, active forest management will create well-paid jobs for local residents and generate contracts for Latvian businesses in forestry, timber harvesting, transport and related industries. Every euro invested in the region contributes not only to forestry but also to the broader economic development of Latgale,” the minister noted.
According to LVM’s long-term forestry management plan, the newly acquired forests are expected to produce approximately 3.45 million cubic metres of high-quality timber, as well as biomass for energy production, over the next 120 years.
The company plans to carry out forest thinning, forest protection measures and other forestry operations aimed at increasing productivity, enhancing the long-term value of the forests and ensuring the sustainable use of forest resources for future generations.
Although LVM has been purchasing land from private individuals and companies since 2007, this represents the largest acquisition in the company’s history, encompassing nearly 5,000 hectares of contiguous forest stands within a single region.
Before completing the purchase, LVM forestry specialists conducted a comprehensive assessment of the property, analysing the condition of the forest stands, their development potential, location, accessibility, management restrictions and expected economic returns. The company concluded that the portfolio consists primarily of productive forest land with high-quality stands of varying ages.
The transaction was supported by Eversheds Sutherland Bitāns and KPMG Baltics, which advised on transaction structuring, risk assessment, due diligence and portfolio valuation.
According to LVM, large-scale forest acquisitions in the Baltic Sea region are commonly structured through the purchase of company shares rather than hundreds of individual real estate transactions. Following the acquisition, LVM plans to merge the two purchased companies into its own corporate structure through a reorganisation process.
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