Setra to cut production at Vimmerby sawmill in Sweden by 20% to rate of 127,000m3/year affecting 20 jobs; mill manager blames high log prices, says strong kronor is putting export-dependent wood products industry under considerable pressure

SOLNA, Sweden , October 24, 2012 (press release) – Against the background of the serious sawlog situation in southern Sweden, Setra is giving notice of production cutbacks of 20% at the Vimmerby sawmill. This affects a total of just over 20 employees.

A tough regional raw material situation with weak supplies and high prices, combined with the uncertain market situation, lie behind Setra’s decision to restrict its production volume at the redwood sawmill in Vimmerby.

“Sawlog prices in the region are far too high to be able to secure the supply of raw material at a reasonable price level. Our calculation just does not add up,” says Björn Ståhlberg, Manager of Setra Vimmerby.

“Demand in the international wood products market is very hesitant and, combined with the strong rate for the Swedish krona, this is putting the export-dependent wood products industry under considerable economic pressure,” says Johan Padel, President and CEO of Setra. “Approximately 70% of production at Vimmerby sawmill is sold in markets outside Sweden.”

The production restrictions at Setra Vimmerby mean that the rate of production on an annual basis will be reduced from approximately 160,000 m3 to approximately 127,000 m3 of sawn product. The plan is to achieve this reduction by a transfer from 2-shift to 1.5-shift production. Of the total of approximately 70 employees at the sawmill, just over 20 will be affected by this notice.

The employees have been informed and negotiations under the Co-determination Act (MBL) will be started.

Setra Group includes a total of nine sawmills, three processing units and, via the subsidiary Plusshus, two modular building factories.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.