Following directives from the State Audit Office and the Competition Council, as well as decisions made by the Riga City Council and the company's supervisory board, an assessment has been completed regarding the exit of SIA Rīgas meži from the roundwood processing business. Four potential scenarios for separating the Norupe sawmill from the company were identified and analysed: separating the sawmill from Rīgas meži into a separate subsidiary followed by the sale of its shares, selling the sawmill’s assets, selling the sawmill business, and leasing out the sawmill’s assets.

The assessment was carried out by SIA KPMG Baltics, a consultant selected through a public procurement procedure. As a result of the in-depth analysis, Rīgas meži has identified the sale of the sawmill business or the separation of the sawmill from Rīgas meži into a separate subsidiary followed by the sale of its shares as the most advantageous scenarios.

With the aim of attracting investors and executing the most advantageous sawmill sale transaction for the company, while adhering to good governance principles and the findings of the assessment, Rīgas meži will seek a transaction consultant in early 2023 through an open procurement procedure to attract potential investors and implement the transaction.

Toms Auškāps, Chairman of the Supervisory Board of Rīgas meži, emphasises that in the process of preparing and making any decisions regarding the exit from the roundwood processing business, the company’s actions must continue to be based on principles of good governance, legality, transparency, and sound calculations. It is also essential for Rīgas meži to continue safeguarding both the company's reputation and the interests of the sawmill employees.

At present, it is not possible to accurately predict when the exit of Rīgas meži from the roundwood processing business might take place. Experts have concluded that it will not be before 2024.

The Rīgas meži structural unit, the Norupe sawmill, was established ten years ago, with a total investment of more than ten million euros. The sawmill's equipment is in working order, but in order to modernise it and increase productivity, investment is required, as is raw material, which is not available to Rīgas meži in the necessary quantities.

Specifically, in accordance with the State Administration Structure Law, Rīgas meži is only permitted to process roundwood obtained from territories owned or managed by the company. Furthermore, in 2021, the company approved amendments to its Forest Management Plan. As a result, timber harvesting volumes have been reduced, including the raw materials available to the sawmill. At the same time, the plan places greater focus on the protection and development of recreation and biodiversity areas.