Nordea credits timber company

Nordea Bank has extended additional financing to Swedwood Latvia, a timber company, to the tune of 12.46 million euros, Kristians Pudans, a spokesman for the Latvian branch of Nordea Bank, said.

Pudans said the total amount of loan made by Nordea Bank to Swedwood Latvia, which is a part of the IKEA furniture production and wood treatment group, was 19.87 million euros.

The company will use the additional financing to build a new sawmill, refinance previous investments in sawmills, expand furniture production and purchase new equipment.

Pudans said that some 50 percent of the loan would be plowed into construction of the new sawmill, while the rest would be used to restore and buy new equipment and supply timber materials.

Swedwood Latvia director Johan Padel said it was vital to secure timber material and furniture parts production in appropriate quality and amounts amid growing sales by IKEA and expansion of its shopping outlets in the world.

Padel said Swedwood Latvia had three production facilities and supplied 10 percent of volumes sold at IKEA stores.

"The investment in a wood treatment plant will ensure handling of a significantly larger volume of products and new jobs for Latvia's people," said Padel.

Founded in 1995 Swedwood Latvia is one of the largest wood treatment companies in Latvia.