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Members helped to invest in the major industrial investment in 1966
Support for the Mönsterås project was huge and 60,000 forest owners from all across the country subscribed to one or more shares in Skogsägarnas Cellulosa AB (SCB), the company that was to construct the pulp mill. Subscription to the shares was made easier by using wood deliveries as payment.
The members also helped to finance a major industrial investment presented by Södra in 1966. A financing programme called Silveryxan (the Silver Axe) was presented simultaneously. Offering an interest rate that was 1.25 percent above the highest deposit rate, management hoped that members and employees would be able to raise SEK 100 million, which was a condition for the participation of other financiers. The target was achieved with a strong margin.
Owners of the forest industry group
Today, Södra´s members own a major forest industry group. As well as supplying Södra´s wood raw material, they are lenders to their own company and customers who buy services and goods from Södra. They pay their contributions by delivering wood – and the money is repaid when their membership ends. As owners, they are helping to finance the need for new equity.
The share of the processing profit
The profit distribution model rewards loyal members, and those who deliver all their wood to Södra. Processing profit is generated by industrial investments and when the profits are distributed, the aim is to base half on wood deliveries and half on contributed capital.
Over the past ten years, Södra has transferred more than SEK 1,000 million of collective equity to its members’ accounts for issued contributed capital. The members’ paid-in and issued contributed capital now represents one-quarter of total equity.