VAXJO, Sweden (News release) -- Södra announced that the interior wood operations in Kallinge and Umeå will be sold to Sörnsen Holzleisten.
"We have performed a strategic review of the operations and decided to discontinue the interior wood operations. Only Berg & Berg in Kallinge remains after the most recent sale, for which we also intend to find a buyer. This means that Södra discontinues the part of its operations in the interior wood segment," said Jörgen Lindquist, President of the Södra Wood business area.
Södra has been active in the interior wood segment since 2002. However, market conditions for interior wood products have changed dramatically in recent years. New operators have entered the market and reduced margins, and producers have integrated forwards and also become distributors. Södra has introduced several measures to adjust the production structure in response to the changed conditions.
"Over the past two years, we have made a series of strategic decisions in order to focus on timber products and timber building systems. In light of these decisions, there is no natural position for interior wood in Södra. We therefore believe it will be better to discontinue and sell to operators who can manage and develop the business," said Jörgen Lindquist.
The focus on construction timber and timber building systems is intensifying. In recent years, Södra has worked diligently to increase the profitability of its sawmill business by optimising flows from raw material to customer, and by reviewing the sawmill structure. The restructuring programme announced in June 2016 included a SEK 400 million investment package for high-priority sawmills.
"The positive results of our measures and investments are clear to see, and we have significantly improved the profitability of our sawmill business. The most recent investment in the sawmill at Långasjö is creating an efficient and modern sawmill that will meet the demand for our sustainable timber products," said Jörgen Lindquist.
Södra is now the largest supplier of construction timber to the Swedish building trade and also one of the largest suppliers of construction timber in Europe.
"Our focus on construction timber will continue and we intend to further strengthen our positions with new concepts and products, such as primed panelling, to meet market demand. Our new segment in timber building systems - for which we are currently building a new CLT facility at Värö - will enable us to leverage Södra's unique advantages to generate value for its customers and members," said Jörgen Lindquist.
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