Tough times in the timber industry

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One of Norwegian forest owners’ most important local customers will be going out of business this weekend, when the Södra Cell Tofte cellulose firm shuts down in Hurum. It’s the latest in a string of mill closures in recent years and it’s also forcing job cuts at Viken Skog, the forestry cooperative that tried unsuccessfully to take over the Tofte plant.

Spruce and pine trees are abundant in Norway, like here in Nordmarka north of Oslo. New research shows they've also been around for several thousands years longer than previously thought. PHOTO: Views and News

Norway’s vast forests are scenic, but forest owners are having trouble making money off them. The timber industry has been troubled for years. PHOTO:

“The shutdown of Tofte means that we also have to scale down our staffing,” Viken Skog boss Ragnhild Borchgrevink told newspaper Dagens Næringsliv (DN) on Friday. About one in four of  Viken Skog’s roughly 100 employees face losing their jobs.

Viken Skog markets timber and negotiate prices for its roughly 11,400 forest-owner members in several southern Norwegian counties including Buskerud, Vestfold, Akershus and Oppland. It also supports industry research and development, but its members are now mostly trying to simply stay in business given the falling demand for paper and other forestry products.

The timber industry is caught in hard times, and no one is feeling that more acutely than the nearly 300 workers in Tofte. The Swedish owner of Södra Cell Tofte turned down bids to buy the mill and keep it going, claiming they were too low. Saturday was to be Södra Cell Tofte’s last day of production.

The looming shutdown of the Södra Cell pulp mill in Tofte reflects tough times in Norway's forest products industry. PHOTO:

The Södra Cell pulp mill in Tofte on the Hurum peninsula southwest of Oslo will be going out of business this weekend. PHOTO:

The shutdown is a major blow to the already troubled timber industry, since it took in around 20 percent of all Norwegian timber. Tofte was Viken Skog’s biggest and most important customer, noted DN, and its disappearance will hurt forest owners all over southern Norway. New markets, mostly paper mills in Sweden and Germany, likely won’t take in all the timber that Tofte did, and transport costs will be higher.

At Viken Skog itself, based in Hønefoss, some staff cuts have been implemented through resignations and retirement, but Borchgrevink told DN between 20 and 30 percent of its staff will be affected. Viken Skog’s management is also reorganizing into two divisions, one for purchasing and one for production.

“In practice we’re going from being a very geographically oriented organization to one based on function,” she said. “We believe it will give the forest owners better service. The goal is to to have better management and get the timber more quickly out of the forest.”

Viken Skog also is working to redevelop another former mill in Hønefoss, Fossum, as a new cellulose plant that also will concentrate on other “future products,” she said. Berglund