Japanese Sumitomo Forestry picks up 26% stake in Spacewood

Japanese housing and wood products firm Sumitomo Forestry has announced its foray into the Indian market by picking up 26 percent stake in Nagpur-based furniture firm Spacewood for up to $14 million (about Rs 90 crore). Sumitomo Forestry Crest Co, a fully-owned subsidiary of Sumitomo Forestry, would set up a new manufacturing facility for production of prehung doors by investing Rs 30 crore.  “Our investment for Spacewood is between $13-14 million and we have picked up 26 percent stake,” Sumitomo Forestry General Manager Itaru Ozaki told PTI. Sumitomo Forestry will have a nominee on Spacewood’s board of directors. Spacewood co-founder Kirit Joshi said the investment by Japanese partner would be used for opening new stores besides setting up of a new door factory. “We are planning to set up the factory at Nagpur,” he said, adding the funds would also be used for current factory modernisation and expansion at two other units. Spacewood plans to increase its sales network by over three-fold to 50 stores in the next three years from its present count of 15 stores located in seven cities. “We would be primarily in tier I and we may have stores in certain cities as Ahmedabad, Lucknow, Chandigarh and Kochi but we would restrict up to 11 cities,” said Joshi. Spacewood has stores in Delhi, Chennai, Hyderabad, Mumbai, Kolkata, Bangalore, Nagpur and Pune. Established in 1996, presently Spacewood has two product lines - housing furniture and modular kitchen. It will start another one for building materials after the investment. “We are entering into the building material with its first product is hanging doors. The company would set up a new unit at Nagpur and invest around Rs 30 crore in it,” he said. Established in 1691, Sumitomo Forestry owns and manages 46,247 hectares of forest land in Japan, and manages 200,000 hectares overseas. It has 72 consolidated subsidiaries and 21 associated companies. PTI