Due to rising interest rates and inflation in Europe and the US, Södra expects weaker demand for wood products and thus decided to reduce sawn timber production by approximately 100,000m³ for the remainder of 2022.
The adjustment is being made to create a balance between production and customer needs. The sawn timber market was already slowing in Q2 2022 and Södra Wood expects the negative trend to continue throughout the rest of the year.
Furthermore, due to the current uncertainty of the business environment – where the sawn timber market could both rapidly deteriorate or improve – Södra Wood is not ruling out the fact that further measures may be required or that planned shutdowns may not occur during the autumn if the market take an unexpected turn.
“We know that demand for Södra Wood’s products will be favourable in the long term and that confidence in timber as the most sustainable construction material is strong,” said Peter Jhaveri, business area president for Södra Wood. “But although the long-term trend is positive, we must work actively to counter market volatility and balance production with customer needs.
“We are doing this by reducing production temporarily. We are following developments carefully and continue work actively with what we can influence.”
Södra Wood produces more than 2 million m³ of wood products per year at its eight sawmills. Production will now be adjusted at most of these sawmills and each sawmill will be adjusted individually, and production will be individually adjusted depending on the assessed development of demand for each product and market segment.