Everything is shrinking
After his participation at this year's International Softwood conference, marketing director Erik Eliasson reports on the hard situation within the wood industry.
Published: 2023-12-04
I’m writing this while flying back home from the 2023 International Soft Wood Conference in Vienna, where I spent a few intensive days talking with and listening to some of the leading analysts in our industry. And the general conclusion is that demand for timber is decreasing in basically every major market around the world. Timber consumption, for example, is expected to fall by almost 20 percent in the EOS area from 2021 to 2024. You actually have to go all the way back to 2014 to find such low levels of demand. North America’s construction industry and timber consumption are also on the decline, although here the downward trend is not as pronounced, and the turnaround is expected to come first. China’s construction industry, which has long been the engine of economic growth, is also suffering, and its real estate bubble looks in danger of bursting.
Not only is demand in our industry decreasing, but the global supply of sawn timber is decreasing at the same time. I sat at dinner yesterday with the owner of one of central Europe’s largest and most successful sawmill groups. His assessment is that the supply of sawn timber in his business will likely decrease by a further 20 percent. Bark borer damage and storms have led to large felling volumes for a number of years at a time when timber markets have been extremely strong. Now, however, a dark cloud looms over our industry, with timber prices making production unprofitable in large parts of Europe, compounded by a reduction in supply from the forests.
In northern Sweden we can see a similar pattern, with a decrease in sawmill production of ten percent in the past year. Since 2022 it has fallen by a massive 18 percent, and my feeling is that this trend could continue. Svea Skog’s dramatic halving of tree fellings in northern Sweden, together with an active environmental movement that vigorously appeals against fellings in western markets are just two examples of factors that are currently making conditions for sawmills even more difficult.
As volatile as the industry is right now, it is safer than ever to be part of a member-owned company with 27,000 private forest owners behind it. Our unique strength is our ability to supply our own businesses with raw materials over time, especially when times are as tough as they are right now.
Norra Timber is currently planning the implementation of extensive investments. Instead of slowing down through this tough recession, Norra Timber is investing heavily to the tune of half a billion SEK. These investments include measuring stations in Kåge and Sävar, and X-ray systems (CT log) at all our facilities. Thanks to our new measuring stations, the development of logistic flows within our business is also being made possible. But we are not merely content with upgrading our facilities - we are also
modernizing our way of working. We have recently established a joint logistics unit, introduced a new customer support system for ordering freight, and are preparing the implementation of digital check-ins and check-outs for outgoing goods. These changes will provide our customers with an even better service, as well as free up our staff to
concentrate on other tasks.
At Norra Timber we continue to follow our long-term development and business strategy, and are accelerating even faster to address the current market fluctuations.
/Erik Eliasson, Market Manager at Norra Timber
Not only is demand in our industry decreasing, but the global supply of sawn timber is decreasing at the same time. I sat at dinner yesterday with the owner of one of central Europe’s largest and most successful sawmill groups. His assessment is that the supply of sawn timber in his business will likely decrease by a further 20 percent. Bark borer damage and storms have led to large felling volumes for a number of years at a time when timber markets have been extremely strong. Now, however, a dark cloud looms over our industry, with timber prices making production unprofitable in large parts of Europe, compounded by a reduction in supply from the forests.
In northern Sweden we can see a similar pattern, with a decrease in sawmill production of ten percent in the past year. Since 2022 it has fallen by a massive 18 percent, and my feeling is that this trend could continue. Svea Skog’s dramatic halving of tree fellings in northern Sweden, together with an active environmental movement that vigorously appeals against fellings in western markets are just two examples of factors that are currently making conditions for sawmills even more difficult.
As volatile as the industry is right now, it is safer than ever to be part of a member-owned company with 27,000 private forest owners behind it. Our unique strength is our ability to supply our own businesses with raw materials over time, especially when times are as tough as they are right now.
Norra Timber is currently planning the implementation of extensive investments. Instead of slowing down through this tough recession, Norra Timber is investing heavily to the tune of half a billion SEK. These investments include measuring stations in Kåge and Sävar, and X-ray systems (CT log) at all our facilities. Thanks to our new measuring stations, the development of logistic flows within our business is also being made possible. But we are not merely content with upgrading our facilities - we are also
modernizing our way of working. We have recently established a joint logistics unit, introduced a new customer support system for ordering freight, and are preparing the implementation of digital check-ins and check-outs for outgoing goods. These changes will provide our customers with an even better service, as well as free up our staff to
concentrate on other tasks.
At Norra Timber we continue to follow our long-term development and business strategy, and are accelerating even faster to address the current market fluctuations.
/Erik Eliasson, Market Manager at Norra Timber