Material deficit

To address this situation, we are actively working with short- and long-term solutions, across the entire value chain, including through a developed business offering to forest owners and efficiencies in processing. 

Geopolitical and market factors mean the demand for timber is now greater than the supply, which has led to higher timber prices. This affects the entire sawmill industry in southern Sweden. In January, Södra Wood lost a part of its planned raw material supply, mainly because our raw material stocks were already low due to a market with an already established deficit. In addition, the wet weather has made it difficult to extract raw materials from the forest. 

We see the same scenario during March if the cutting and logistic situation remains the same. Conditions usually improve with the arrival of spring in April. 

Forest owners have delayed their decision regarding final felling, and the forest supply has been lower than usual during the autumn, leading to reduced stocks and a more challenging supply situation for the sawmills. 

We have therefore strengthened the price level for forest owners to stimulate supply and worked more actively with visits to members' properties. We have also introduced concepts for more long-term cooperation agreements. Some beneficial effects of these measures have already been seen, but while their full impact is expected to be felt in the next few months, it is important to know that the supply of raw materials will remain challenging for some time.