The company's history started in 1945 when all forests in Hungary were nationalized. To coordinate the work of the newly created forestry directorates, a supervising authority, the Central Directorate of Public Forestry Directorates in Hungary was also created. Forests in the vicinity of Kecskemét belonged directly to CDPFDH, with Tőserdő in Szikra and Nyíri Forest belonging to the local forestry directorate in Kecskemét.
1948 saw CDPFDH, with headquarters in the town of Szeged, uniting the above territories and creating the Kecskemét Public Forestry Directorate.
In 1950, the central directorate was abolished and independent local forestry authorities were created, like the Kecskemét Public Forestry Authority. In 1952, the Bugac and Szabadszállás forestry authorities were also annexed to it.
Although the authority kept its name after it was merged in 1958 with the Délkiskunság Public Forestry Authority, in 1970 it was renamed to Kecskemét Forestry and Wood Processing Authority.
KEFAG's (Kiskunság Forestry and Wood Processing Inc) immediate legal precursor, Kiskunság Forestry and Wood Processing Authority (registry number 03-01-000006) was founded 15 May, 1986 by the minister of agriculture and food industry (order 50.165/2/1985).
The Board of Directors of the National State Holding Agency established government supervision over the Kiskunság Forestry and Wood Processing Authority 8 April, 1992. The company's restructuring planwas duely submitted prior to the 28 February, 1993 deadline to the forestry affairs director of the NSHA. HIB Ltd acted as counselor in creating the plan.
KEFAG was founded 1 July, 1993. The corporation's founder and 100% owner was NSHA (17B Bánk bán Street, H-1115 Budapest, Bánk bán u. 17/b.) exercising ownership rights on behalf of the Hungarian state. Act XXXIX in 1995 established Hungarian State Holding Company (31-33 Újpesti rkp., H-1133 Budapest) as NSHA's legal successor. The owner changed the company's form to closed corporation (hence the term 'Zrt.' in the company Hungarian name) by decree number 170/2005. (XI.03.).
Prior to privatization, the company used only its own assets strictly in carrying out the tasks of its operation. Later, its production assets, heavy machinery and repairs divisions were privatized and apported to two ltds (Sáskalapos Forestry Ltd and Erdőgép Ltd). These companies merged in 1998, forming Kiskunság Erdőgép Ltd with headquarters in Bugac. Its responsibilities include providing heavy machinery related and shipping tasks for KEFAG and sell its free capacity on the market.
To carry out the required wood processing tasks, KEFAG turned its Jánoshalma wood processing plant in 1992 into Bács-Fa Ltd, changing the name to ÖKOPAL Ltd in 1999. ÖKOPAL Ltd merged into KEFAG again in 2006.