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Short-term production adjustment at Södra’s sawmills

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Short-term production adjustment at Södra’s sawmills

November 13, 2019 - 11:33
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Södra has decided to extend production stoppages at its sawmills during the Christmas and New Year period.

The move is in response to lower demand for sawn timber in the months ahead. The stoppages are expected to reduce production by 30,000 m³.

Södra’s sawmills have processed a higher share of spruce over the past six months due to the infestation of spruce bark beetle. The assessment is that most of the year’s timber from forest infested with spruce bark beetle will have been handled by the end of the year. For this reason, Södra is able to adapt its production in the short term while fully meeting its obligations in relation to its members.

“We can see that sales have progressed at a normal rate during the year thanks to fruitful and long-term relationships with our customers. However, it has been a challenge to handle a larger share of spruce in production while the market for sawn timber has weakened during the year. We now believe that a short-term production stoppage around Christmas and the New Year, together with increasing sales in the US and Asia, will leave us in a good position moving into 2020,” said Jörgen Lindquist, President of the Södra Wood business area.

Södra’s exports to markets outside of Europe have risen by 15% compared with the year-earlier period, despite a lower share of pine and thus a decline in sales to North Africa. The potential to continue increasing sales outside of Europe in 2020 appears favourable, which will simultaneously result in a lower supply to Europe.