At the International Softwood Conference (ISC) at the beginning of October, Marc Brinkmeyer, CEO of Idaho Forest, was still baffled by what happened in 2021. Instead of the expected headwind on the... Read more ...
Klausner’s way was always an extreme one. Almost everything was new and very successful for a short time, but speculative and many steps taken were much too risky.
A million cubic meter sawmill far away from any forest? Klausner came with this idea and built it in Wismar at the Baltic Sea. This way, a timber industry cluster was established.
The reasons for the rise of the company in the years from 1993 to 2005 are manifold: The use of the abundant funding guidelines in the new states of German is but one reason. Klausner installed uniform high-speed lines which had only one purpose, i.e. to cut around the clock.
For several years, the company is in the right place at the right time: when the German log price was right and the US could not satisfy their own softwood sawn timber demand.
As if there was no tomorrow, Klausner expanded in extremely short intervals. A sawmill for € 45 million in Saxony was not enough. In Landsberg, another 1.5 million m³ sawmill is built for € 65 million. For this sawmill, a long-term supply contract with the Bavarian State Forests is signed. A similar contract follows in 2007 in Northrhine-Westphalia, where there is still litigation over € 54 million.
Then, many things came together. The project in Landsberg is delayed. In order to meet delivery obligations among other things, Kühne Holz in Adelebsen was acquired. Klausner invested € 30 million for rebuilding a universal German sawmill and making it a high-speed sawmill. Klausner got € 100 million via bonds – as the “third biggest sawmill group with a cutting capacity of 8.6 million m³”.
The fact that Klausner was mainly dependent on just one market was disastrous during the financial crisis. Only a debt cut of € 120 million saved Klausner in the crisis years of 2007 to 2012. In total, the group recorded around € 200 million in losses. € 238 million worth of loans were returned to creditors.
Starting in 2010, European assets were gradually sold. Give up? Au contraire: Klausner now tries his luck in the US. Three sawmills with European technology are to cut plantation wood. However, only one sawmill got going.
In mid-April, two of Klausner’s companies filed for bankruptcy – among other things because the sale of the US production sites apparently failed. A chapter of European sawmill history thus seems to end for good.
The question remains: What would the German sawmill industry look like today, if Klausner had simply continued the sawmill of his parents in Tyrol? The question is moot but interesting. In my opinion, Germany would not be Europe’s biggest softwood sawn timber producer. Klausner set the pace in Germany. He acted as a catalyst: Binderholz in Kösching, Egger in Brilon, Pfeifer in Lauterbach are examples for companies in Tyrol alone which all started more or less at the same time.
The former Klausner production sites continue to characterize the landscape of the German sawmill industry: Ilim Timber in Wismar und Landsberg, HS Timber (i.e. Schweighofer) in Kodersdorf and Mercer Timber in Friesau. The irony of things: Shortly after the change of the company nameplates at those German production sites, there were again “Klausner conditions”: a rise in global sawn timber demand and heaps of damaged wood.
Looking at the long-term contract with BaySF for Landsberg at a distance of 15 years, it is one thing: a bet on the future market development. Several companies were offered this bet, but only Klausner accepted it. The fact that such a long-term price maintenance is a deadly sin of the log seller is not the buyer’s fault. However, the benefit “Klausner price v. market price” probably amounts to more than € 150 million over the duration of the contract. Despite this advantage, Klausner eventually stumbled over its own success and overconfidence.
What are the lessons to be learned from this economic thriller? Good lawyers are worth a mint – see BaySF/NRW contract. Even the leanest company must never depend on just one market. Also, extraordinary growth always comes with a catch.