Japan’s Sumitomo Forestry Co has picked up a 26 per cent stake in Indian modular furniture manufacturer Spacewood Furnishers, for about $13-14 million (₹84.5-91 crore).

Following the investment, the companies would also set up a new manufacturing facility for production of pre-hung doors in Nagpur.

Sumitomo Forestry is a forestry, housing and timber and building materials trading company.

“This association has brought significant opportunity of growth to Spacewood. As far as I know, this is the first FDI investment in our industry. Home segment is currently dominated by carpenters, however, there is a major shift towards readymade products and Spacewood is a major player in this category,” said Kirit Joshi, co-founder, Spacewood.

The alliance will enable Spacewood to increase its retail footprint to about 50 stores from 15 stores and introduce a full line of products in the country.

“The investment and technical collaboration from Sumitomo Forestry will help us leverage our position in the segment to become the largest furniture producer in India,” said Vivek Deshpande, co-founder, Spacewood.

KPMG Corporate Finance was the exclusive financial advisor and DSK Legal was the legal counsel for Spacewood Furnishers.

Nomura Research Institute was the lead financial advisor and Anderson Mori & Tomotsune and J. Sagar Associates were the legal counsels to Sumitomo Forestry.

The company founded in 1996 by Kirit Joshi and Vivek Deshpande, has its factories in Nagpur, with a total production capacity of about ₹800 crore per annum.

Following this investment, Spacewood in association with Sumitomo Forestry’s fully-owned subsidiary Sumitomo Forestry Crest Co, will set up a new manufacturing facility for production of pre-hung doors.

The new facility will also be set up in Nagpur, with the companies investing about ₹25-30 crore.

“India has become an important strategic market for us and we will continue to invest and look for opportunities here,” said Itaru Ozaki, General Manager, Sumitomo Forestry.