SCA Timber is to reduce its solid wood production by 15% (55,000m³) during the first quarter of 2008 due to an over-supply on the market.
The company will also implement an extended production break over Christmas and new year, stop overtime work and start phasing out imported sawlogs because of dramatically increased prices associated with the material.
“For two years, the demand for wood within our product segment has exceeded the supply,” said Ulf Larsson, SCA president.
“The underlying consumption of wood products is still high, but due to very high production at sawmills in Scandinavia and on the continent, we have now noticed that many customers are delaying placement of their orders.”
SCA will close the older of its two grading mills at the Mundsund sawmill and Nordic pine production will be reduced by 40,000m³. At Rundvik, Nordic spruce output will be cut by 70,000m³.
Mr Larsson said both mills were partly supported by imported sawlogs, which SCA believes will be an insecure raw material base in the future.
“We are striving to increase our procurement of sawlogs in northern Sweden, since this raw material is well suited to our product programme and quality demands of our customers.”
Mr Larsson said measures would be implemented as quickly as possible to help SCA to adapt to “temporary uncertainty in the market”.
“I believe that we will soon have a stable order situation and stable prices in the market, a realtionship that will benefit both customers and producers in the long term.”
