The Holmen Group has pulled the plug on a planned SKr175m investment in a finishing unit at Iggesund’s sawmill in Sweden.
The plans to invest were made a year ago but Holmen’s board changed its mind in light of Iggesund Timber’s poor profits in recent years and uncertainty in the Swedish sawmilling industry.
Holmen will now undertake an in-depth investigation into the cost situation and market and technical conditions, before making a decision on future development.
However, the company intends to complete the sawmill. Managing director Johan Hedin said: ‘The original price of the finishing unit was too high when put in the perspective of the strength of the market.
‘Like many other companies we have had quite tough times in recent years which has made us a little more defensive in the technical choice when it comes to the unit which we are now looking to scale down,’ he said.
