- 2016: Binderholz takes over Vapo.
- December 2020: Mayr-Melnhof Karton acquires Finnish cardboard manufacturer Kotkamills and a sawmill.
- 2021/2022: Mayr-Melnhof Holz wins the bid for Bergkvist Siljan’s three sawmills.
- 2022: On April 29, HS Timber acquires the Luvian Saha sawmill.
- 2022: In mid-May, the Ziegler Group takes over the sawmills Balungstrands Sagverk and Backebrons Sagverk.
- 2022: In December, Pfeifer Holding announces the acquisition of Pölkky’s four production sites.
From revolutionary to normal
When Binderholz expanded into Scandinavia in 2016, this step was seen as revolutionary. Never before had an Austrian entrepreneur from the sawmill industry invested in a production site that far in the north. A lot has happened since then. At least 15% of the overall Finnish cutting capacity is now owned by Austrian companies.
Initially, the main reason for acquiring Scandinavian sawmills was to expand product portfolios to include top-quality lumber. Today, however, securing availability in the future as well as predictable, lower log prices (€80 to €85/m³) are the central factors behind acquisitions. The Holzkurier is therefore convinced that further takeovers will follow soon.
Glued timber more important than wood chips
The Central European sawmills invested in further processing as early as two decades ago. Over the years, this strategy increasingly paid off. The integrated production sites experienced years when good money was earned with all products. Additionally, there were years when a lot of damaged wood accumulated (2018 to 2020) and cheap raw material was available as a result. Even in the second half of 2022, when demand and prices plummeted, companies generated profits thanks to higher prices for sawmill by-products and especially thanks to the pellet boom.
While Scandinavians focused on producing good-quality wood chips for a long time, we invested in further processing. Now, we are at an advantage thanks to this decision.
Purchase price minus investment sum
Pfeifer Holding had to pay an estimated €200 to €250 million for Pölkky – minus a €100 million investment program. What do they get for this sum? Two sawmills and two processing plants! The sawmills will soon have two new Veisto lines for small-diameter logs, and the Tyrolean timber company wants to transfer its know-how in processing northwards.
Already before the deal, Pfeifer was a billionaire when it comes to sales. With Pölkky, the company will probably generate sales worth €1.4 billion in 2023. Such a company size also requires further growth. The recently achieved margins of around 30% will probably fall to the usual 15% in the future. However, this will still allow investments in raw material supply.
Shortage of wood and staff at home
Pfeifer could show the way to other timber companies: The money earned is invested in additional production sites. At home, there is often a shortage not only of raw material but also of employees. The focus is not on the sawmills operated by the paper companies but on the Scandinavia’s hidden champions, i.e. small and medium-sized companies like Pölkky. Pure sawmills are more exposed to the negative repercussions of the volatile world markets. That is why there is a bigger interest in companies which also have planing and gluing plants.
Adapting to local traditions
As pioneer in Scandinavia, Binderholz did the preparatory work when it comes to reducing the length of the purchased log wood, for example. Newcomers in Scandinavia state that they want to be more considerate of Nordic traditions and mentalities.
US and South America interesting as well
HS Timber’s story is slightly different. The company came to Finland but is also building a sawmill in Argentina at the same time. This could be an example for others. In addition to Scandinavia, large timber groups will also look to North and South America.
Especially in the US, more takeovers could follow. “Some of the sawmills in Canada are old and, in the west, there is a shortage of raw materials. The south of the US, on the other hand, is attractive for Canadians and Europeans thanks to its plantation wood,” as one market participant explains.
Working abroad
The big Central European companies all have skilled staff who they can send to the acquired production sites. This is a crucial prerequisite for growth on foreign markets.
The increasing number of takeovers of Scandinavian timber businesses by Central European companies is a sign of fundamental change. The money that is earned is invested to secure raw material.
