Södra Timber, part of the Södra forestry group, is giving notice of redundancy to 25 of its employees at the Traryd sawmill in Sweden. Trade union negotiations will start immediately.
“We believe the weak business cycle for wood products is going to last and we don’t expect to see a pick up in demand before 2010 at the earliest. That means we need to slow our production rate and cut costs,” says Peter Nilsson, president of Södra Timber.
Södra Timber has decided to cut back sawn timber production at Traryd from three shifts to two.
“In conjunction with this, 25 of our employees at Traryd will be made redundant. Trade union negotiations will start immediately and production on the third shift will stop in the first week of October. In total this represents a decrease in production from 130,000 cubic metres to 90,000 annually,” says Peter Nilsson.
The timber market has steadily weakened during the year, initially as a result of increased production in Central Europe and the strong decline in construction in the US. It was then hoped that the market would improve.
“We are now facing a weaker market for wood products in Europe in general, with reduced construction as a result. Our estimate is that it will take a few years for the market to improve. It is essential we create profitability in a shrinking market, and this means we have to have a lower rate of production at the same time as we reduce our costs.”