Production at the company’s planing line at Nørlund currently runs in three shifts, which will be cut back to one on the new line in early January 2014. The sawmill line at Nørlund will switch on the same date from two to three shift working. Total production of around 200,000 cubic metres raw timber will be retained and is expected to rise, with increased sales to export markets in particular, and on the pallet market in Denmark.
“To continue being one of the market leaders, one of the most important criteria for a business is that it is healthy and competitive. That implies that we trim the organisation to ensure that Nørlund Træ is ready to do what it takes, and remain competitive. Especially if we are going to realise our ambitions,” explains Bjørn Skou Andersen, CEO of Nørlund Træ.
Production costs at the Viskum sawmill are significantly higher than at Nørlund, which has new, modern production facilities. Production wages at Viskum are also significantly higher as a proportion of costs than at Nørlund.
However, there is an element of production which cannot easily be relocated, as the huge dimensions of long timber and very wide items cannot be produced at Nørlund. The sale of such products has dropped significantly in recent years to the point where they only account for between 5 and 10% of total production. They will therefore be bought in from other suppliers in the future, to maintain a complete product range.
Nørlund Træ’s management will continue to see if it is possible to change the number of redundancies in consultation with the specially-convened negotiating committee, and to help some of the personnel made redundant to find other jobs.
Even though this is a black day for Nørlund Træ, the management regards the future as relatively bright. The company is the biggest Danish-based supplier of certified timber for the building industry and intends to remain so, either at the same level of sales or higher in the future.
Over DKK 40 million ($7.23 million) has been invested in a new sorting plant after a fire at the Nørland mill in May 2012, plus in a new, advanced plane and sorting plant at the same site. The Nørland plant has surplus capacity, and production from Viskum can be relocated there. There will still be extra capacity for the growth strategies planned for export markets and the pallet factory.
Nørlund Træ has developed export sales significantly in recent years, and now sells to countries such as the UK, Germany, Holland, Belgium, France, China and South Korea. There is growing demand for certified timber for the building industry on the export markets, and prices are generally rising on the global market, thanks to high demand in Asia and the USA. Nørlund Træ is able to supply FSC and PEFC-certified timber.
“Our ambition continues to be a major presence on the Danish timber market, and to grow steadily with rising sales on the global market, where we see potential particularly in China and the USA; plus certain markets within the EU,” explains Andersen.
Nørlund Træ A/S is the biggest supplier of timber to the building industry in Denmark, with a turnover of more than DKK 200 million ($36.2 million). The company accounts for about 30% of all softwood sold to the sawmill industry in Denmark.
