Arriving at Södra’s Värö site just south of Gothenburg is like walking into a mini-city.

The soaring and impressive buildings of the pulp facility – the subject of a recent SKr4bn investment (€448m) – and of the adjacent sawmill show forest product operations on a massive scale.

The Värö sawmill itself started production in 2012, replacing the original sawmill which had operated since 1972. Equipment including a Linck sawmill line was transferred from Klausner Group’s closed facility in Adelebsen, Germany, to Värö.

With an annual production capacity of 600,000m3, Värö is the largest sawmill in Södra Wood and in Sweden and one of seven group sawmills in southern Sweden.

A sawmill in Finland, acquired through the Crown purchase, is also part of the group. The group capacity is 1.9 million m3, of which about 1.3 million m3 is subject to further processing.

Värö produces for a specific market segment – Europe and the UK, with the latter accounting for around 50% of the timber produced on site.

Meeting president of Södra Wood Jörgen Lindquist, sawmill manager Anders Nilsson and marketing director Andreas Jonasson at Värö came after a year of a lot of activity at the company.

The past year had seen it acquiring the remaining shares in UK timber importer/ distributor Crown Timber and the launch of a sawmill profitability improvement programme.

Mr Nilsson said the acquisition of Crown had been a key driver behind being able to look in more detail at the products it supplied to the UK market.

Much discussion of quality and dimensions led to a change in production last autumn to rationalise the number of timber lengths produced to more closely align with customer needs, reduce waste and be more efficient.

“Acquiring the asset of Crown and the added co-operation gives us more information and potential,” added Mr Nilsson.

Mr Lindquist said Södrä had looked into setting up its own operation in the UK prior to the Crown takeover. He said those discussions ultimately didn’t lead anywhere.

But the company took heart from the fact that, during its time as a 20% minority shareholder in Crown Timber, it was common for Crown customers specifically to request Södra’s timber.

Södra says its decision to acquire the rest of the shares in Crown was therefore welcomed in the market and seen as a positive sign.


Crown’s Cirencester facility became the focus of all of Södra’s activities in the UK and Irish markets as Södra Wood Ltd, managing sales of approximately £120m of structural timber products.

Every day 26 truckloads of timber are dispatched to customers via its terminals and timber treatment centres at Dundee in Scotland, Wicklow in Ireland, and Sheerness and New Holland. The main products are carcassing, CLS, roof battens and decking.

“Crown is now a fully integrated part of the business offering just-in-time delivery and small parcels. We also have big customers who can take bigger quantities,” said Mr Lindquist.

These big customers include the likes of Stewart Milne Timber Systems.

Three main UK customer sectors for Södra are timber frame manufacturers, builders merchants and roof truss producers.

Merchants are the biggest individual sector for Södra, with the company being an approved supplier to five merchant buying groups. New flexibility with smaller pack sizes available means it can also service the smaller merchant sector market.

“We are one of the few UK timber companies that have a connection all the way back to the forest,” said Mr Lindquist.

As well as now being able to control the entire UK distribution operation so it can create a rational product range at each sawmill, Södra also says that control of sales in the UK and Ireland will enable it to specify prices and specifications more efficiently.

“Our UK strategy is not a production/wood placement strategy, but a market-oriented strategy,” added Mr Lindquist. “We ask what are the needs of our customers.”

Mr Lindquist reassured that Södra was committed to the future of the engineered wood products business acquired through the Crown purchase. This supplies glulam and Masonite I-joists, as well as Ultralam LVL beams and rim board products.

The company also intends to develop its business by offering the remainder of its range to the UK, including interior wood products, energy products such as pellets, and both solid wood and parquet flooring.

And Södra timber housing subsidiary Trivselhus is also looking at possibilities for increased timber housing construction in the UK. Its projects include developments in Cambridge and Milton Keynes and it has a partnership with north-east construction company Esh Group.


Of course, Södra is different from a lot of sawmilling enterprises because of the fact it has a membership of 51,000 forest owners, representing about half the forests in south Sweden.

Through its industrial operations, Södra provides them with an international market for their forest raw materials, as well as harvesting and forest thinning services. Almost all members are dual FSC/PEFC certified.

“We are not like a stock market company,” said Mr Lindquist. “We are interested in having a long-term profitable approach and we have a material supply which is very stable compared to other parts of the world.” On the export markets side, the UK is the biggest but the US, China, Japan and the Netherlands are among other countries that Södra ships to.

“There is an upswing in global demand,” he added.

Citing a 4.3% increase in world timber consumption, the need for more housebuilding in Europe, population growth globally and sales to the Swedish building trade rising for the third consecutive year, Södra paints a very bright market picture generally.

“There is a lot of talk about Brexit and its implications but we are finding strong demand in the UK. The UK building industry has realised that certain specifications may not be available. We get the feeling that the market understands this,” said Mr Lindquist.

“The prices have gone up in the last year in the UK but if you compare it to other countries, the UK is still a bit behind in price development to be honest. Sooner or later this has to be balanced. There is stronger demand than supply in the market.”

Production in south Sweden – where most of the structural whitewood is produced – is sharply down so far this year, despite an overall increase for the whole of Sweden. The production growth, Södra points out, is in the middle and northern parts of the country.

Like many other sawmillers, Södra has rationalised production to improve competitiveness, with a profitability programme initiated last summer. It closed one mill last year (Ramkvilla) and reduced production at Mönsterås and Värö, taking out around 200,000m3 in total.

Restructuring also involved a SKr200m sawmill investment package at Långasjö, Värö and Orrefors, the largest being at Långasjö sawmill, with production volume increasing from 280,000m3 to 360,000m3. Next year, Södra will be looking forward to its 80th anniversary.