Swedish exports of sawn timber increased by 4% to 2.862 million m3 during the first quarter of this year, according to figures issued by the Swedish Forest Industries Federation. Since prices fell by just over 3% on average compared with the first quarter last year, the value of timber exports only increased by 1%. Prices of redwood continued to sink while the price of whitewood has increased. Seen in a longer perspective, export volumes have remained fairly constant at approximately 11 million m3 in recent years.
The trend towards increasingly greater exports outside of Europe is continuing, which is important since there is an excess of timber in western Europe. The statistics show that exports to Japan, Swedish sawmills’ largest market outside of Europe, have increased by 5% compared with the first quarter last year. And exports to the US have more than doubled so far this year as a result of historically high timber prices and a stronger dollar.
Export trend
Another ongoing trend is that the export of planed timber is increasing more quickly than sawn timber. Further processing is a good weapon in competition with timber from eastern Europe since only a small proportion of the sawn timber that comes from that region is planed. Over the past decade exports of planed timber have almost doubled.
The effects of the storm in January had a negative impact on the first quarter results of Sveaskog, Södra and Mellanskog. Sveaskog reported profits of SKr171m, down from SKr362m, Södra’s profits were SKr255m compared with SKr331m last year and Mellanskog’s results were SKr8.4m, down from SKr22.5m, although when the change in the value of forest assets was taken into account Sveaskog’s profits rose to SKr532m. SCA‘s profits were also reduced, from SKr1.9bn to SKr894m, while Setra showed an increased loss of SKr57m, with sales weaker than anticipated.
A significant development in the UK market is the acquisition by Södra Timber, part of the Södra Group, of a 20% stake in Crown Timber, a leading specialist distributor of planed structural timber and engineered wood products in the UK and Ireland. As a result, Crown Timber has assured its access to high quality timber supplies from Södra’s sawmills and, in return, Södra has secured its distribution routes into the important UK and Irish markets. “This closer collaboration will provide us with direct access to Crown’s broad customer network, which creates development opportunities for our sawmills,” said Södra Timber president Peter Nilsson. “It also gives us the chance to improve our service to existing customers, but won’t otherwise affect our business in Great Britain or in Ireland.”
Acquisition
Another recent investment by Swedish forest industry companies is the acquisition by SCA Timber and Iggesund Timber, part of the Holmen Group, of the timber trading company Uni4 Marketing AB, which has a strong position in the market for Scandinavian timber in North Africa and the Middle East. SCA Timber and Iggesund Timber will each own 50% of Uni4, with the previous owners remaining in the company. Uni4 sells approximately 200,000m3 of sawn timber, primarily Scandinavian redwood products, to customers in North Africa and the Middle East.
Holmen Skog intends to make analyses of infra red satellite pictures this summer to form maps of forest areas in urgent need of clearance. “The areas where a large amount of felling was done in the 1960s and 1970s have today turned into fine young forests, but these areas are sometimes like a jungle and are difficult to penetrate and survey from the ground,” said Holmen Skog production leader Peter Christoffersson. “With the aid of infra red satellite pictures we can easily identify densely foliaged areas which we then look at more closely by helicopter to establish the definitive clearance requirements.”
The method is said to be simple and effective and is based on the various forest areas having different chlorophyll contents which are visible in infra red satellite pictures.
As forecast in the previous Swedish market report, a number of major industrial companies, including some in the forest industry, have formed an electricity supply company to increase the availability of electricity in Sweden at a competitive price. The move was motivated by the risk of rising electricity prices, and in due course an electricity shortage, as a result of the closure of the nuclear reactors at Barsebäck. The companies forming what will be known as BasEl consist of 15 major industrial concerns that together consume 25TWh per year – equivalent to approximately half of the electricity used by
industry in Sweden. The forest industry companies participating in the project are Billerud, Holmen, Korsnäs, Rottneros, SCA Forest Products and Stora Enso.
