Swedish forest products company Holmen AB is forging ahead with its plans for a new sawmill despite continued weakness in the sawn timber market.

Holmen Timber, whose Iggesund sawmill produces 340,000m³ of redwood sawn timber annually, recorded an operating loss of SKr16m for the first quarter from sales of SKr127m.

But manager of Holmen Timber Hakan Lindh told TTJ that ground would be broken on the new whitewood mill development in Norrköping as planned in August.

“Our vision for the future is clearly positive when it comes to wood products,” he said. “We believe wood will have a strong position in construction and timber consumption will grow globally.

“There are a lot of new applications for timber these days. In the UK for instance, wood construction is taking market share all the time.”

Mr Lindh said Holmen was focusing on co-locating different forest products, with its Iggesund model (where timber, paperboard and energy production are located together) to be replicated at Norrköping, where the Braviken paper mill is already situated.

But he admitted that current conditions in sawn products continued to be tough, with high log prices and low sawn prices causing the business to suffer.

The wider Holmen AB group reported profits after tax of SKr245m for the first quarter, thanks to increased prices in its newsprint and paperboard businesses. Profits were down from SKr271m a year ago.

Sales totalled SKr4.5bn, down from SKr4.8m in 2008.