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© Inter IKEA Systems B. V.2000

IKEA WOODEN MERCHANDISESUPPLY CHAIN

Sofie BeckhamForestry Coordinator, IKEA GroupPwC Global Forest and Paper Industry Conference, May 11, 2006


OUR VISION… is to create a better everyday life for the many people


OUR BUSINESS IDEA… is to offer a wide range of well designed,functional products at prices so lowthat as many people as possiblewill be able to afford them


SALES14.8 billion euro, FY 200515% sales increase from previous year


HOW WE CREATE LOW PRICESClose co-operation:• Suppliers• Product developers• Designers• Sales staff in stores• Customers


PURCHASING1,300 suppliers in 53 countries

Swedwood Group: 35 industrial units in 9 countries


PURCHASING

Top five purchase countriesChina 18%Poland 12%Sweden 9%Italy 7%Germany 6%

North America 3%

Asia 30%

Europe 67%


RANGE


Social & EnvironmentalRESPONSIBILITY

Low price, but not at any price.


OUR VISION… is to create a better everyday life for the many people


6.4 million m36.4 million m3roundwoodroundwood

WHYWHY should IKEA care aboutforests?


1

Entrylevel

2

Minimum demands

3

4Wood

4

Level 4 standard

IKEA ForestryStaircase Model


TransparencyTransparency, , TraceabilityTraceability, , LegalityLegality


What are our global goals?

•100% supplier compliance with IKEAminimum requirements (2009)

•3.6 million m3 certified on Level 4 ofour staircase model, FSC (2009)


Creating the right conditions forthe supply chain…LOCAL focus

• Working to affect change in ourkey sourcing countries

• Building capacity to support ourlong term objectives


Forest Projects: Building Alliances

• Strategic cooperations

• Projects linked to business,develop conditions for doingbusiness


IKEA Forest Projects

• Illegal logging

• FSC capacity building

• Responsible forestmanagement practices


WWF and IKEA Cooperation-Russia

• Education and training

• Developing tools – maps

• Supporting uptake of sustainable forestpractice concepts

• Practical approaches to illegal logging


GlobalForestWatch

Intact NaturalForests ofKareliaRepublic andMurmanskRegion



→ Transparent supply chains

→ Illegal logging

→ Changing forestland ownership

→ Corruption in regulatory mechanisms

→ Need for simple and robust tools!

Many challenges...


• Engagement in global dialogue.

• Innovative solutions appropriate tolocal conditions.

What lies ahead?

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