Summary
¦ Wismar and Landsberg mills have a total sawn capacity of 1.9 million m³.
¦ Wismar is exporting 10% of its production to the UK.
¦ Landsberg’s log supply contract has caused a big dispute.
¦ Klausner now has two mills and a capacity of 1.2 million m³.

Of all the German sawmills, it was Klausner that caught the eye in recent years with its huge investment in capacity and rapid growth.

It became Germany’s largest sawmiller, with sawn capacity of 4 million m³ at five mills, and the largest exporter of German sawn softwood to the UK.

But the collapse of the US home building industry, which Klausner was set up to serve – up to 50% of its exports at one point – caused it great financial stress, culminating this summer in its selling two of its largest mills to Russia’s Ilim. It has also sold the sawmill line of its closed mill in Adelebsen to Södra Timber.

The move has made Ilim one of Germany’s biggest sawmills and the company has set up Ilim Timber Europe to run the Landsberg and Wismar mills.

Ilim told TTJ it wanted to reassure customers that it was committed to supplying them and said it enjoyed good co-operation with Klausner, which now runs two sawmills. It’s particularly relevant for UK customers, as the Wismar mill (formerly known as Klausner Nordic Timber) was the main Klausner mill exporting to Britain.

Slava Bychkov, Ilim’s managing director of new projects, told TTJ that the 1.2 million m³ capacity Wismar mill (spruce and pine) is currently running four shifts, with 10% of volumes being exported to the UK – 100,000m³. That volume is generally untreated carcassing, but Mr Bychkov said Ilim was looking at the possibility of introducing treatment facilities at Wismar.

He also said that Wismar would source some logs from Russia in the future, which he said would give better quality product for European clients who required stress-graded timber.

“Our business model is producing a relatively limited range of commodity products in huge quantities. During the financial crisis we looked to identify a good asset for acquisition.

“For us it was very clear that if we’d like to be a significant market player in the future we required assets that were not only in Russia. We had a look around to see who had a business model which was similar to ours and there was a limited number of companies of such size.

“Germany was very interesting for us because it gives us another foothold for the European markets and additional volumes for export,” said Mr Bychkov.

One of Ilim’s first moves was to restart the Landsberg mill in Bavaria, which had been idled for a year by Klausner. The 700,000m³ capacity mill, focused on the European market, will increase production step-by-step.

Log supply contract

The mill’s log supply contract, inherited from Klausner, has been the source of much controversy because it allows the mill to buy 500,000m³ of spruce and pine logs annually from the Bavarian state forestry agency at below market price, something that has irked smaller and medium-sized competitor mills.

Mr Bychkov said he didn’t want to speculate on the issue, but cited two important decisions in favour of the mill – a European level ruling, as well as the supreme court of Austria that declared the contract “reasonable”.

German timber newspaper Holz Zentralblatt told TTJ that many smaller mills had been supplied by the Bavarian state forestry agency while the Landsberg mill had been idle.

“The other sawmills are saying they need these logs and if they can’t get them anymore they would suffer a lot and they do not know how they would survive,” said the Holz Zentralblatt contact.

Appeal to European Commission

The German Sawmill Association has made a further complaint about the contract to the European Commission on the grounds of unfair competition and state subsidies. “It’s quite a critical situation at the moment. Lots of lawyers are looking at the details and nobody knows what’s going on. There is a lot of fear and confusion,” said Holz Zentralblatt.

Meanwhile, Ilim Timber Europe has agreed a plan with Klausner until the end of the year to co-operate on timber supply, clients and Ilim’s policy on the markets.

“I think customers will get an additional option with us, because the limitations which existed within Klausner don’t exist with us,” said Mr Bychkov.

Klausner itself remains very much in business and the sale has given it an opportunity to restructure, even though it has effectively been more than halved in size by the transaction. Its two remaining mills in Thüringen and Sachsen have a combined sawn capacity of about 1.2 million m³.

“The UK is an interesting market, of course,” said Klausner’s Anne Leibold. “Both mills are involved in the export market for the UK and we have the same product range of 2×4 sawn timber and CLS.”

Ms Leibold predicts that raw material supplies will continue to be a major issue affecting Europe’s sawmilling sector.