Håkan Svensson came to Södra from a background in chemicals at Dow Corning and engineering at Bengtssons Maskin.
The key difference he identified between these sectors and timber, at least when he first joined the forestry co-operative-owned timber and forest products giant as CEO of Södra Interiör (then Södra Gapro) in 2005, was their integrated view of business from start to finish.
"I found timber more focused on individual processes, products and qualities," he said. "My previous industries looked at the whole process, pipelines, achieving optimum output from inputs."
Whether or not this more holistic approach has infiltrated the wider timber sector in the meantime, Mr Svensson and his team have certainly applied it since he moved from his latest post as Södra’s director of forestry to become acting president at its sawmill arm Södra Timber in early 2012.
"We’ve been looking at introducing continuous flows across our mills and increasing efficiency through eliminating production bottlenecks," he said.
The backdrop to this has been the economic crisis, which has dented sales and profitability across the Nordic timber sector.
"The recession depressed demand and prices for end products, while raw materials costs have continued to rise," said Mr Svensson, who took the president role permanently this year. "We had to take steps to turn business around."
But it’s been about more than cost cutting: "We’ve also invested in planing and treatment facilities so we sub-contract out fewer processes," he said. "That’s not only a saving, it means fewer inter-plant transfers and more efficient delivery. Logistics today is a key issue. Customers not only want quality products, they demand ever shorter lead times."
The installation of a paint and priming line at the company’s Långasjö mill to process cladding, soffits and other exterior products links with this strategy. But, said Mr Svensson, it also ties in with "all of us becoming lazier consumers".
"Increasingly we want products where the work has been done," he said, adding that he anticipates installing additional priming lines.
Another major task, both of integration and engineering, has been to bring the new Väro sawmill on stream and plug it into the wider operation. The plant was first built in by Klausner in Germany, but quickly became surplus to requirements. Södra Timber bought it, dismantled it, transported it across Europe, and rebuilt it on the site of the old Väro facility, complete with new heat-recovery Valutec kilns. By September it will be at 600,000m³ annual capacity, producing 80% spruce, 20% pine.
Also a significant move has been the recent merger of Södra Timber and Södra Interiör’s sales and marketing divisions. This means the combined team can offer the full range; sawn and planed construction whitewood and redwood and sawn hardwoods from Timber’s 11 sawmills (including two hardwood plants taken over from Interiör), and mouldings, flooring, panelling and other planed products, targeted primarily at merchant and DIY sectors, from Interiör’s 13 sites.
"This is another response to customer demand – they wanted the complete package," said Mr Svensson. "But it also enables each division to cross-sell and enter new markets."
One course Södra Timber has not followed over the last year, unlike many competitors, has been to curtail output. In fact in 2012 it was increased by 18,000m³ to 1.4 million m³, and the imminent introduction of third shifts at Väro, Mönsterås and Kinda mills will take it to 1.6-1.7 million m³, 100,000m³ off pre-recession levels.
"We’ve been better placed to do this because we’re in control of raw material flow – our owners are our suppliers," said Mr Svensson.
This advantage, he said, combined with latest strategic developments, also leaves Södra Timber well placed to capitalise on market recovery, signs of which are coming through.
"We’ve also focused on developing markets beyond our traditional European base, notably the US, China, Japan and, to a lesser extent North Africa and the Middle East, and this is where we’ve seen first signs of improvement."
European demand remains subdued, however, Södra Timber stresses that its wider global outlook does not mean it views the market as less significant. The UK, in particular, said Mr Svensson, remains among Södra Timber’s most important territories. Here a key customer is long-standing partner Crown Timber, in which it has held a 20% stake since 2005. The hoped for first quarter UK building upturn, both acknowldge, didn’t happen but, according to Crown Timber chief executive Stuart McIntyre, business is now stable.
"And there are positive signs for the second half, particularly for truss and timber frame segments," he said.
The Crown-Södra connection is also set to develop as one outflow of the Timber and Interiör marketing merger.
"Crown Timber specialises in structural products and until now Södra has principally supplied us with truss timber, planed carcassing and CLS, but we’re now also planning to work with Interiör," said Mr McIntyre."Initial feedback from target customers has been positive, and we’re expecting to begin with a limited range and then develop it from there."
Mr Svensson expressed similar quiet confidence about Södra Timber’s overall outlook. First quarter profits were hit by exchange rates, but the second and third are expected to be better. Beyond this he is hopeful of continuing market improvement and "securing higher prices in line with growing demand".
"We have annual capacity of over 2 million m³," he said, "and we intend to use it."