On behalf of more than 52,000 owners, Södra’s mission is to promote the profitability of their forest estates, and to secure markets for their forest raw material. This mission also includes promoting high-yield and valuable forest production combined with nature conservation and cultural considerations, and monitoring and promoting its members’ business policy interests, particularly in regard to property ownership rights.
Södra shows the way
Södra goes its own way. We challenge expectations of what a forest company is. We have a strong sense of self-confidence and our actions are clear. Together with our members, we are showing what it means to be a next-generation forest company.
Södra’s strategic focus until 2020 is based on being a value-generating and cohesive Group with profitable growth. In addition to the continuous development of existing products, we are also increasing our focus on new products, innovations and a strong commitment to sustainability.
Growth is essential for generating long-term value and we must grow in order to evolve and be competitive. The timber inventories of Södra’s owners are growing due to responsible Swedish forestry, with replanting, proper care and long-term management. This means that Södra has large supplies of raw material that require markets. At the same time, Södra already offers products subject to growing demand of about 3–5 percent per year in the global market. We are therefore investing in increased production capacity to meet the members’ growing need for markets, and the rising customer demand for products based on Swedish wood raw material.
Profitability and cash flow
While growth is important, it must never have a negative impact on profitability. Södra is continuously revising its structure and procedures to improve profitability and cash flow, resulting in regular restructuring of any low-yielding practices. Investments are based on cash flow analyses. A key component of increased profitability is greater efficiency, and better utilisation of joint resources.
Focus on core business
Södra is focused on maintaining and advancing its strong position in forestry and pulp production, as well as sawn and processed timber. Major investments are being made to expand the core business, particularly pulp, but initiatives are also increasingly focused on the development of new products and services. In 2016, several initiatives will be introduced to develop the service offering to forest owners in such areas as financial, legal and other advisory services. Several services will be developed in digital format.
Growth in the right markets
Södra is a highly export-dependent company, with the international market – mainly Europe – accounting for almost two-thirds of sales. The rapidly growing Asian markets, where Södra is strengthening its presence, are generally considered to account for much of the rise in demand.
New products and innovation
Södra’s product portfolio largely comprises high-volume products, such as pulp and sawn timber. Innovations in existing product categories are crucial to development of the customer offering. At the same time, innovation to develop the use of forest owners’ raw material is a priority. Efforts to speed up the development of new products for commercial use will be intensified.
Since Södra’s operations are based on responsible forestry, sustainability has always been a natural part of our daily activities. At the same time, the importance of a holistic approach to sustainability has become increasingly significant, which is why we are working strategically to identify and prioritise the Group’s future sustainability commitment. The strategic areas of sustainability are climate-positive business, sustainable forestry, resource efficiency, responsible employer and engaged employees, responsible business and sustainable innovation.
Södra’s overall objective is to be a more profitable, competitive, innovative and sustainable business by 2020, with a stronger global market position. Our success is based on long-term profitability, and a strong financial position that enables business development and profit sharing with our owners. The key financial objectives are expressed by return on capital employed, equity ratio and profit distribution.