Södra adjusts production of sawn timber

The Swedish sawmill industry is under pressure. Timber prices have reached record highs, while the construction market is weak both in Sweden and internationally. In the U.S., construction has fallen to levels not seen since the pandemic, and Europe is also experiencing a clear decline.

The low demand for sawn timber has led to inventory volumes at several of our production units now exceeding planned levels ahead of the year-end. At the same time, the strengthened Swedish krona has further squeezed profitability, as prices in local currency have remained unchanged since spring.

Södra has already taken measures during the year, including temporary production stops. These measures will now be extended during the final quarter with a 20 percent reduction in production to adjust inventory levels and address the ongoing imbalance between manufacturing costs and sales prices.

"It’s a balancing act in an unusual situation, but we see that a temporary adjustment in production is necessary to manage the situation in the finished goods market and to ensure our long-term competitiveness. We have a responsibility toward our members, customers, and employees to act with a long-term perspective. By reducing production, we create the conditions to better align with demand, manage inventory levels, and strengthen the market’s long-term stability," says Jonas Karlsson, Head of Sales and Marketing at Södra Wood.

At the same time, interest in timber construction is growing, for example in the UK and Sweden—a trend that could increase supply pressure when construction picks up again. Södra is well prepared for the future through strong customer relationships, strategic investments, and a close connection to members’ forest estates.