The key to "profitable forestry" is large-scale production and total purchase
Updated by Kazuaki Hiraishi on June 03, 2025, 3:49 PM JST
Kazuaki HIRAISHI
（Platinum Initiative Network, Inc.
After graduating from the University of Tokyo in 1984 with a bachelor's degree in Civil Engineering, he joined Mitsubishi Research Institute, Inc. He served as Director of the Overseas Business Center, Director of the Policy and Economic Research Center, Deputy Director of the Policy and Public Affairs Division, Secretary General of the Asian Pipeline Study Group, Secretary General of the Northeast Asian Gas and Pipeline Forum, and Executive Vice President of MRI Research Associates, Inc. He has served as President of M.R.I. Research Associates, Inc. He specializes in infrastructure planning, transportation economics, and energy economics. D. in Engineering, Bachelor of Engineering (Construction).
Japan's forest resource potential is great, but the current state of the forestry industry, which is the upstream of the supply chain, is difficult. The labor force in the forestry and lumber industries is dwindling, and the industry has not been industrialized as a livelihood due to reliance on subsidies. The forests are understaffed and productivity is declining. In order to solve these problems and make forestry management sustainable, several measures have already been proposed, and the rest must be steadily implemented.
The key to reducing afforestation and logging costs and ensuring business continuity is to increase the scale of operations. In the process of consolidating forest lands using the Forest Stewardship Management Act, measures for forests with unknown owners are an urgent issue. Under the expansion of the area under operation, it is necessary to formulate a forest road maintenance plan in conjunction with the operation plan, and to steadily promote the maintenance of forest roads. Reforestation is also essential for the establishment of long-term forestry projects and for the preservation and enhancement of carbon dioxide absorption in the future. Furthermore, as demand for timber expands, there will be an even greater demand for funds on a nationwide scale than before, and cooperation with finance will become increasingly important. Forest CO2 credits have been traded both domestically and internationally, and have the potential to become an important source of revenue for forestry businesses along with timber production in the future.
Now is the time to move toward innovation in forests and forestry. The Platinum Forest Industry Initiative has proposed a business model that fully utilizes forest resources with the goal of quadrupling domestic timber production by 2050. It proposes a standard business model for "profitable forestry" based on a cycle of large-scale operations, main logging, and reforestation, and a "stockyard" that purchases all the materials produced. In considering the region and scope of the project, various factors were taken into account, including economic and production rationality, timber collection efficiency (means of transportation), collection, selection, and processing costs, local demand, distance to customers, and CO2 emissions.
As the nucleus of this model, a stockyard was set up to collect 100,000 cubic meters/year of logs (all purchased). Centered on the yard, the project proposes a 40-year cycle of main cutting and reforestation based on a forest area of 250 ha/year (10,000 ha per cycle).
In order to link with biomass chemistry and wooden cities, it is expected that a lumber and chip mill will be set up in the area adjacent to the stockyards, and a chemical plant for primary processing such as liquefaction of chips will also be installed. In western Toyama Prefecture, a business study council has been set up and is now in the case study phase, as part of efforts to implement this model in society. Starting with this initiative, we plan to expand it nationwide in the future. (Kazuaki Hiraishi, Executive Director, Platinum Network)
The book of the same title as this web media, "Forest Circular Economy" (edited by Hiroshi Komiyama) was published by Heibonsha on August 5, 2025. The book proposes a redesign of the economy, institutions, and local communities based on the three pillars of biomass chemistry, wooden cities, and forestry innovation in the cycle of "cutting, using, planting, and nurturing" forests. This practical book provides a point of contact between concepts and examples for those involved in policy making, social implementation, and the creation of businesses that make use of local resources.
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