Summary
• Södra Timber trucked Klausner’s mill from Adelebsen in Germany 1,000km to its Väro site in Sweden.
• The project cost €100m.
• The equipment includes Linck sawmilling and Springer log yard and lumber sorting technology.
• Annual capacity will be 750,000m³.

Earlier this year a fleet of heavyweight trucks transported a state-of-the art 750,000m³ capacity sawmill half way across Europe. Some of the loads on the 1,000km trek from Klausner’s site at Adelebsen in Germany, where the mill had originally stood, to Södra’s timber and pulp complex in Värö, Sweden, where it was to be rebuilt, were so big they needed a special escort. Other parts had to be taken by train.

Södra Timber acknowledges this was a demanding, complex logistical exercise. But, according to chief executive Peter Nilsson, the logic was simple: it saved time and money.

“If we’d designed and built a new mill at Värö it would have taken four to five years from planning to commissioning,” said Mr Nilsson. “Buying an existing facility cut that to just 18 months. Klausner closed the mill in April 2010 and we inaugurated the rebuilt plant this October.”

In the Adelebsen facility, Södra was also buying the latest Linck sawmilling and Springer log yard and lumber sorting technology. It had only been operating a year when Klausner decided, in testing market conditions, that it no longer needed the capacity.

The equipment, plus the dismantling, transport and rebuild, cost €100m, which was around what it cost to build it in the first place. But for this, Södra also got a tried, tested and ready-to-roll mill.

“Inevitably with a new facility you’re taking some risk and don’t really know your concept will succeed until the end,” said Mr Nilsson. “But Klausner had already shown it worked. The concept was proven.”

The agreement with the German company also involved its engineers dismantling, reassembling and commissioning the plant, together with the expert assistance of Springer and Linck.

“Many of the team had worked on the mill when it was first built in Germany, so they had that experience to draw on,” said Mr Nilsson. “In total the project involved around 200 people from Klausner and other companies, including about 20 different nationalities.”

The Södra team also added some improvements of their own to the facility, notably in terms of grading after planing, where they added a Finnscan timber scanner. Some new construction work was undertaken too, but parts of the original steel mill buildings also travelled the 10-hour journey from Adelebsen.

Overall the relocation and rebuild went smoothly and according to schedule and the mill is expected to wind up to its 750,000m³ annual capacity target by the end of 2012. That compares to 250,000m³ at the old plant the new facility replaces at Värö. And, underlining the efficiency and automation of the new technology, the additional 500,000m³ will only need 25 more people, taking the workforce to just 145.

Like the old facility, the new plant will derive all the heat it needs for kilning and warmth from the neighbouring Södra Cell pulp plant.

“The two are directly connected and work closely, with chips and dust from the sawmill also going to the pulp plant,” said Mr Nilsson. “It’s a model that works well.”

Long-standing plan

Södra has been planning to build a new “high-speed, cost-oriented and automated mill capable of running 24 hours a day” at its strategically located Värö site for some time (the facility is just a few kilometres from the port of Varberg and can access redwood and whitewood supplies by direct rail or road links from across Sweden). But the fact that it’s gone ahead with the investment in today’s tough market does not mean it is bucking the economic trends. In July it reported first half profits down 50% at SKr573m and high raw material prices, and weaker demand continue to make life difficult.

“It’s been very competitive, with the calculation between log prices, production levels and timber prices completely out of balance,” said Mr Nilsson. “We believe the supply and demand situation will improve next year and we’ll see price improvement. But the market remains tough and, like the rest of the industry, we’ve cut back production, closing our Traryd and Ådvidaberg mills.”

So, while Värö will stand Södra in good stead in better times – and capacity could be increased with more shifts – it is also part of a wider strategy to cut costs, boost productivity and enable it to compete in all economic climates.

“Södra is owned by independent forest owners who are committed to the future of this business and know we have to take some big long-term steps to make it more competitive,” said Mr Nilsson. “A mill like Värö lowers our costs and enables us to secure log supply because we can pay more for the material. In turn, that gives our customers more security and greater confidence.”

Among those customers, he added, are buyers in the UK, who accounted for half the production from the old Värö mill, principally buying 47mm graded and ungraded planed construction whitewood.

“I’m not sure the UK will be taking half the much bigger output of the new mill!” said Mr Nilsson. “But it will continue to be a key market for Värö, alongside others, including Japan and the US.”

Another outcome of the Värö project is the bond between Södra and Klausner, which the two have discussed evolving into some form of strategic marketing and sales collaboration.

Whether the completion of the plant will be followed by further developments at the company’s eight other mills remains to be seen. For the time being, said Mr Nilsson, Södra is focused on bringing Värö to capacity. But reviewing its production base is an “ongoing process”.