The creation of Sweden’s first and Europe’s fourth largest timber company will inevitably have repercussions on the international softwood market.
The new timber company, provisionally named Royal Star, has been formed as a result of a merger between the sawmilling and timber processing units of Sveaskog and Mellanskog. The new company will combine the eight sawmills and two processing plants of AssiDomän Timber, a wholly owned subsidiary of Sveaskog, with the five sawmills and timber processing facilities of Mellanskog Industri AB (Mindab). The major shareholders of the latter are Mellanskog and LRF, a special interest organisation for people who own or cultivate land and forest. The new company will have annual sales of approximately SKr5bn and 1,450 employees.
The owners point out that the aim of the new company will be to become a market leader for appearance timber in selected quality segments for customers in Europe and Japan. The emphasis will be on high quality pine products. The company will also aim to be the leading distributor of processed and sawn timber products to the Scandinavian building materials sector.
Production levels
Swedish production of sawn timber products reached its highest level ever last year, according to figures recently issued by the SFIF, with a 3% increase over 2001. The total output was 16.6 million m3, of which exports accounted for 11.5 million m3, a rise of 0.5 million m3. The chief export market was the UK.
Figures issued by the National Board of Forestry show that in the first months of 2003, trade in most forest and forest industry products increased, although the total export value dropped by 7%. On the other hand, imports of round timber in January and February fell by 20% compared with the same period the previous year, while imports of sawn timber were halved.
The timber industry expects to increase its investments by 20% this year, according to a poll carried out by Statistics Sweden while the pulp and paper industry is expected to reduce the level of its investments by 10%.
SCA Timber UK has acquired the Stoke-on-Trent central distribution facility that was formerly part of the BCL Group and formed a new company – SCA Timber Supply Ltd – to operate the facility. SCA Timber Supply is a subsidiary of SCA Timber (UK) Ltd and becomes one of the parent company’s three UK operating sites. Together the volume of the agency timber and stock/machined timber products coming into the market place through the three sites will be 300,000m3.
The overall managing director in the UK, Rob Simpson, commented: “This acquisition gives SCA the opportunity to grow faster than ever before and provides SCA’s seven sawmills and six planing mills with an excellent channel to Britain’s highly-demanding market place.”
The Swedish particleboard industry is concerned because the price of the sawdust and shavings used in the board has doubled in the past two years. The cause of this is the huge increase in the use of sawdust and shavings for energy products, from 500 million m3 in 1990 to 3,000 million m3 today. The basic problem is that wood used for energy purposes is not subject to the energy tax in Sweden and the industry fears that the present tax system will eventually knock out the whole of the Swedish wood panel manufacturing and a lot of the furniture producers unless the government rectifies the unfair tax situation.
A company that is particularly concerned about the situation is IKEA-owned Swedspan, which is building a new production line for particleboard to a value of SKr325m. Bengt Karlsson, president of Swedspan, points out that it is not only the wood panel industry that is threatened, but also part of the furniture industry. “If you produce a product, in our case board, you can use it as fuel at a later date. But if the wood is burnt, it can only be used once as a raw material.”
