Södra has reaffirmed its commitment to the UK market as it reported radically improved profits and updated on the progress of the building of its new 750,000m³ capacity sawmill at Varo.

Södra Timber sales and marketing director Eva Thunholm also told TTJ in London that the company was confident of its levels of raw materials supply going forward and was positive about the future despite a strong Krona, uncertainties in European economies and the UK government spending cuts.

The company received a boost when it reported a big rise in operating profits (SKr1.9m) for January-September (for more details click here)

Ms Thunholm said Södra Timber’s total sawn softwood capacity would rise to 2.2 million m³ once the new Varo mill was completed in 2011, with much of its production of construction timber to be exported.

She said the mill would predominantly serve Södra’s established markets – the UK, Holland and the Nordic countries and also the US when the American housing market picked up again. Worldwide timber supply challenges and possible future shortages would not change this outlook, she said.

“The UK is one of our key markets and we would never pull out. Even if the market is up and down, it’s very important for us to keep the market share and build it,” she said.

Ms Thunholm said Södra has a few customers in China but has no plans to tap this market, “We are very positive about the future.”

The mill machinery is being transferred from Klausner’s closed mill in Adelebsen, with the German company also providing its expertise in sawmilling installations and logisitics to help Södra. But Ms Thunholm said there were no current reasons to extend that into any market co-operation.

Ms Thunholm said with storm-felled timber now all used up, raw material prices were sky high in Sweden and now was a good time for forest owners to harvest. She said Södra’s influence with third generation forest owners, many who rely on the company’s timber and harvesting knowledge, meant the company was confidence of maintaining its level of supplies.