covid-19

We’re cutting more than planned

Article by Gerd Ebner (translated by Eva Guzely) | 22.07.2020 - 10:27

Five questions

1. Are you going to reach or even exceed your 2020 target results?

This year, we are going to cut more wood than we have planned. This way, we can also help forest owners with the removal of beetle-damaged wood from their forests. Our investments in our sawmills and planing plants also have a better effect than expected, which supports the removal efforts. The overall sales situation is rather good but flexibility is required in distribution and prices continue to be under pressure in many areas.

2. What is your main challenge, either internally or externally, which resulted from the COVID-19 pandemic?

Thanks to our early and consequent prevention measures and the discipline of our employees, we have not had any internal restrictions due to the coronavirus. In general, the extensive use of online meetings and cloud services has even improved and intensified communication in our group during the crisis. This helps our staff in home office to remain well connected, too.

We were hit particularly by travel restrictions, because we could not offer our foreign suppliers on-site support in the start-up of our investments. Not everything can be solved just as well through remote maintenance.

Uncertainties on markets and the high volatility of volumes and prices are also relevant, since it comes with a certain additional effort in terms of creativity and flexibility in production planning and distribution.

3. What is your “problem assortment 2020”?

In general, we have rather big volumes of waste wood and lower quality sideboards as a result of the lower quality of log wood.

The situation on the wood waste market has become more difficult due to hesitant buyers and higher cutting activity in sawmills. The fall in wood chip prices does have a negative effect on the sawmill in Friesau, but overall, it is an advantage for our group (note: Mercer operates three pulp plants). Sawdust sales are currently a “problem child”.

4. Do you fear an “early and long winter” this year, i.e. a fall in demand in Q4 2020 due to a slowdown in the economy?

We see a strong demand until late autumn, however, it is not clear how the rest of Q4 is going to develop. In this context, we will have to monitor the further development of the pandemic, the result of the US presidential elections and the effect of measures aimed at supporting the economy. Even though we have not had a “real” winter in a long time, wet weather or snowfall can also affect business.

5. Is the current state of the domestic economy a positive surprise for you?

The months of April and May were moderate which made us fear the worst. So far, however, timber markets have not really felt the repercussions of the pandemic which is definitely a positive surprise. As to further developments, the measures aimed at stabilizing the economy are going to be decisive in keeping the economy and the construction sector in particular running. Avoiding a second wave of the corona pandemic is also crucial. This means remaining disciplined when it comes to basic protective measures, also on summer holidays.