timber news 3/2009 - SCA Forest Products AB

Strategic investmentsin good times and badOver the past 10 years or so, SCA has invested billionsof kronor in its sawmill business. This yearalone, investments worth almost SEK 600 millionare either underway or have been completed. Theinvestments are carefully planned and selected inorder to support and enable the implementation ofSCA Timber’s strategy of becoming a strong supplierto the timber industry and builders’ merchantsector.Agood starting point for describingSCA Timber’s investmentsis 2000, whichsaw the opening of Bollsta andMunksund sawmills within thespace of just a few weeks. Bothinstances involved the purchase ofcompletely new pine sawmillplants of the highest calibre inEurope in terms of volume andtechnology. Furthermore, bothinvestments were worth SEK 500million each and constituted thebiggest investments in new sawmillsever made in northernSweden.“Since then, we’ve invested afurther SEK 1 billion in our sawmilloperations,” says Jerry Larsson,technical director at SCATimber and responsible for thecompany’s investment programmesand plans. “A further SEK 500million has also been invested inprojects that are currently underwayor have been completed, andwe’re very clear about the directionwe intend to take over thenext few years.”Of course, one of the aims ofmaking such investments is toimprove efficiency and productivity.“Sawmills are becoming increasinglylike the processing industry,”says Larsson. “Facilitiesmust be large and efficient to becompetitive. When Bollsta andMunksund were built, they wereable to produce 2,000–2,500 cubicmetres annually per employee,In March, SCA Timber opened its window component factory in Munksundwhich at the time was the highestproduction rate in Europe. Today,our productivity is 50% higher,with the very best European millsaiming for a production of 5,000cubic metres annually peremployee. It’s always a fluidtarget.”Part of the company’s investmentstrategy has involved acquiringtechnology designed to improvethe assessment of the qualityand suitability of raw materials.“In all our sawmills, we nowemploy timber sorting that utilises3D measurement technology,” saysLarsson. “This technology allowsus to accurately select the correctlog for each product. We’re also inthe process of introducing x-raysorting in our larger pine sawmills.By using x-rays, we can determinethe proportion of heartwood in alog, which is particularly importantwhen making top-grade productssuch as window frames.“We’re also bringing automatedand reliable measurement technologyinto sawing, trimming andplaning. Manual assessment isbeing replaced with objective anduniform measurement. This meansthat we can set and satisfy precisequality criteria in a totally differentway.”SCA Timber has adopted twoprincipal directions in its strategy.Firstly, to become a supplier to thewood processing industry, providingproducts that have been madeready for the next stage in the processingchain and, secondly, tobecome a supplier of finished solidwood products to the builders’merchant sector.“We’ve improved our understandingof the needs of the timberindustry and can, to an increasingextent and in conjunction with ourcustomers, find ways of eliminatingsteps in the processing chain,”says Larsson. “One example of thisis the window component factorywe commissioned in Munksundlast winter. Our customer has beenable to rationalise its raw materialsmanagement and so, by having anefficient facility, we can producefinished components that are compliantwith specific customerrequirements.“Our experience has been sogood that we’re investigating thetimbernews | 6