Klausner expands to the USA

"The lean years are coming to an end. Despite the sale of three of our sawmill operations, the Klausner Group still is one of Europe's largest lumber producers. Even if sales fell once again in 2012/2013, the group has now achieved a positive EGT", managing director Leopold Stephan was pleased to announce. In Germany, the group's sawmills in Kodersdorf and Saalburg-Ebersdorf continue to operate – around 2.7 million solid m³ of logs are planned to be converted there this year. "That's quite a lot – not only given the tight log supply in Germany these days. Also in the light of the fact, that the record conversion volumes for Kodersdorf and Saalburg-Ebersdorf are 1.2 million sm³/yr and 2.3 million sm³/yr, respectively", says Stephan.

Sued wood

On 4 November, a six month period ended for an out-of-court settlement between Klausner Holz and the German state of North Rhine-Westphalia (NRW) – without results. According to a comparison reached in May, the state now ought to start delivering at least the 195,000 sm³ reserved for Klausner.
Klausner had sued NRW at the District Court of Muenster on fulfillment of contract concerning the supply of roundwood after Storm Cyrill. Moreover, Klausner also demanded compensation for non-delivered roundwood in 2009 and also concerning the closure of the plant in Adelebsen/DE. Rumor has it that the value in dispute amounts to € 120 million. With reference to a pending case, Stephan refrains from commenting on these numbers. However, he stresses that "in times like these this is primarily about logs and the fulfillment of a contract. Pacta sunt servanda – treaties are to be observed. It's that simple."
"The state of NRW is trying to get rid of the delivery obligation by means of an expert report and the EU Commission, although the validity of the contracts have already been confirmed by the Higher Regional Court of Hamm/DE", Stephan explains in the Timber-online interview.
Moreover, in mid-October sawmills federated under the so-called "Initiative Holz und Arbeit NRW" (transl. initiative for wood and labour NRW) had filed a complaint with the EU Commission. So far there has been no reaction of the European Commission on this issue. Years ago, Klausner had been confronted with a similar complaint in the German state of Bavaria, when also fixed supply contracts with the Bavarian State Forestry (BaySF) were involved. After seven years, Klausner finally won through. "But in this case the courts will probably not allow so much time to pass as there have been two rulings in favour of Klausner already in Muenster", says Stephan.

Increase in demand made US launch necessary

For Stephan, the logical consequence of this development is expansion. Not in Europe, however, but in the United States. To him, the reasons are obvious: "The expected global lumber demand requires our response. And the re-launch in the United States is just that."
The crisis in the timber industry began in 2007. Stephan is not really convinced that this will be over and done with in only "seven lean years". In his estimation, the roundwood prices in Central Europe will not change significantly in the coming year. Logging will continue to decline, or at best remain constant. "No doubt the lumber prices in this region will remain under further pressure, and therefore the question arises, 'Who will be able to bear it?'", he says as he refers to bad news from the industry, especially in recent weeks, and adds: "Even if our two sites in Germany are not located in the high price regions for logs, it is a great challenge to run the sawmills economically sound". His conclusion: "What we are seeing in Central Europe today is a further withdrawal or reduction of capacity – and not only in the sawmill industry."
But it is not only the roundwood price that lured Klausner to go to America. "I am firmly convinced that the world lumber price will continue to rise. If the Levant and Asia only nearly had the per capita wood consumption of Europe, this would have already created a huge demand", Stephan says. And he adds, "Demand from these regions has increased disproportionately in recent years. Klausner has seen the signs of the times way back and has operated sales offices in these regions for years."