Vapo Timber is the latest Nordic sawmiller to announce production cutbacks.

The company, which has just reported a loss of €4.2m, said the cutbacks were due to the significant overcapacity in Europe which has led to a collapse in profitability.

Production cutbacks will begin on November 7 at the Kevatniemi and Nurmes sawmills in North Karelia, with shifts going from two to one.

All of the company’s sawmills will cease production from December 23-30.

Around one month’s production – 50,000m³ – will be cut in total.

Hankasalmi sawmill will not be cutting its shifts because the new sawing line is still being started up.

Vapo is also launching co-operation negotiations with all employees in preparation for possible lay-offs and production cutbacks at all sawmills in the first half of next year.

“In the first nine months of last year we produced 4% less sawn timber than in the same period this year, but operating profit was almost €5m,” said Vapo Timber managing director Juha Hakala.

“This time, on higher production, the operating loss was over €4m. Construction of single family homes in Finland has dropped by a third and export demand has suffered from the general economic crisis in Europe and the instability in the Middle East and northern Africa, which are important export destinations for Vapo.”