Egger has decided to make a binding offer to buy Switzerland’s largest sawmill after receiving sufficient assurances on raw material timber supply.
“We have decided to adopt a binding offer because we have reached in the Grisons [region], the target amount for the timber supply,” said Walter Schiegl, production management and technology spokesperson for Egger Group.
“Even outside of the Grisons, the first contracts are signed. We recorded a positive response and are confident that we will manage to reach the total amount of 300,000m³ of roundwood by the auction date.”
Egger wants to reopen the closed mill at Domat/Ems, which went bankrupt at the end of 2010, but it is bidding against a handful of other parties, some of which want to buy the machinery and relocate it elsewhere.
Egger said in the medium term it wanted to invest in the mill’s further processing of sawn timber and in a pellet plant.
“Egger will consolidate the integration of the sawmill in the group’s market position in structural products and expand,” it said.
A lack of timber supply was one of the reasons Domat/Ems closed but Egger is proposing a new pricing model to forest owners aimed at providing security for both parties. The model is similar to a fixed-rate mortgage and allows forest owners to calculate their long-term sales and eliminate market risks.
The mill was operated by Mayr-Melnhof before its recent bankruptcy.
