Finland's Vapo signs €10M agreement to replace saw line at Hankasalmi sawmill, says project will increase productivity, reduce operating costs

JYVÄSKYLÄ, Finland , December 16, 2010 (press release) – “The future of the sawmill industry is bright. Construction activities are beginning to pick up after the global plunge, and particularly wood building is expected to see a significant increase in the coming years. This is the perfect time to make investments,” says CEO Juha Hakala.

As the main part of the project, Vapo Timber Oy signed a contract with the Finnish Veisto Oy today. Veisto Oy will deliver a saw line to the Hankasalmi sawmill. A comprehensive long-term maintenance and service contract of the machinery was also signed today.

The total value of the agreed replacement investments is almost €10 million, and they include the modernisation of the in-feed and board treatment lines as well as the renewal of the saw line. By replacing the current saw line from 1995, the company strives to improve the productivity of the sawmill and decrease the operating costs. This will particularly enhance the cost-effectiveness of the processing of small diameter logs, helping to ensure that the sawmill will continue to be competitive also in the future.

“The saw line replacement and service contracts are significant investments for Vapo Timber. Our objective is to increase the competitive edge of our Hankasalmi sawmill significantly,” Hakala says.

The investment will mean that the jobs of seven employees of the 70 currently working at the Hankasalmi sawmill and its processing unit will need to be cut.

The investment will be carried out in spring 2011, ensuring that the sawmill will be in perfect position to meet the increasing international demand for sawn timber.

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Vapo Timber Oy is one of the largest companies in the European sawmill industry. The company has four sawmills in Finland: in Hankasalmi, Kevätniemi in Lieksa, Nurmes, and Peuravuono in Ivalo.

The turnover of Vapo Timber is approximately €150 million, and the company employs 220 people. The company’s total sawn timber and processed product capacity is 750,000 cubic metres, of which the Hankasalmi sawmill produces 250,000 cubic metres. Vapo Timber Oy is a subsidiary in sole ownership of Vapo Oy.

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