More gloom for Nordic mills

The Swedish company, which has already cut production at all its sawmills, increased pre-tax losses last year to SKr179m from SKr163m in 2011. Sales grew 7.7% to SKr1.5bn, however, sales in the the final quarter were static and losses grew by SKr66m.
"The sawmill industry in southern Sweden in the past year has been in the worst crisis since the 1970s. The loss rate for the industry is unacceptable," said Rörvik CEO Per Rodert.

"Both the domestic and European market is characterised by a low demand for sawn timber. Commodity prices are not a reasonable relationship to sawn wood prices, which means that the industry is making losses."

In curtailing production at its seven mills last autumn, Mr Rodert declared: "It does not make sense to buy expensive raw material, cut it and then sell it at a loss. A further reduction in the price of raw material to the levels of central Sweden is required for sawmills in our area to achieve profitability."

The mills have a capacity of almost 1 million m3, but utilisation last year ran at about 55%. However, processing increased through finger-jointing and pressure impregnation.

Last month Moelven Industrier, Setra, Södra, Holmen and Vapo all reported losses in their timber operations. Metsä Wood and SCA's forest operations recorded profits, but that included non-solid wood products.

Mr Rodert said that in addition to falling demand across Europe, the previously strong Swedish housebuilding industry had slumped to historic low levels of 4,000 units last year.

"The uncertain economic climate means continued uncertainty about volumes and prices to provide an acceptable level of profitability."