Holmen will cut production at its Linghem sawmill in Sweden by almost two-thirds as historically high sawlog costs and weak lumber markets continue to squeeze its Wood Products business. It is the second significant production reduction announced by the group this year.<\/p>\n
Holmen describes current lumber market conditions as the weakest in 30 years. The market has deteriorated sharply since the exceptional years of 2020\u20132022, while competition for wood raw material has increased and costs have risen.<\/p>\n
Annual production at Linghem will fall from around 72,000 m\u00b3 to approximately 26,000 m\u00b3, a reduction of 46,000 m\u00b3 or 64%. Around 18 employees will be affected by redundancy notices, with union negotiations starting immediately.<\/p>\n
At Linghem, historically high sawlog prices have made it impossible to secure raw material at a level that allows the mill to operate profitably under current market conditions.<\/p>\n
The decision follows a difficult first half for Holmen's sawmill operations and an earlier production reduction at Bygdsiljum. At the same time, the company has completed a major expansion at Iggesund, pointing to an increasingly selective allocation of production across its Swedish sawmill network.<\/p>\n
Linghem output falls to 26,000 m\u00b3<\/strong><\/p>\n Linghem is Holmen's smallest sawmill and operates as a specialised small-log facility with an integrated planing mill. It processes pine and spruce into three-metre sawn and planed products for joinery and construction, complementing production at the much larger Braviken sawmill. Sweden and the UK are among the principal markets for its products.<\/p>\n The mill employs slightly more than 30 people, meaning the planned reduction of around 18 positions represents a substantial contraction of the operation.<\/p>\n Karolina Svensson, head of Holmen's Wood Products business, said production has to be brought into line with prevailing market conditions to protect long-term profitability.<\/p>\n The reduction does not mean Holmen is withdrawing from the lumber business. The group has continued investing heavily in its larger and more highly processed sawmills, but it is becoming more selective about where production remains economically viable.<\/p>\n Second Holmen sawmill cut this year<\/strong><\/p>\n Linghem is not an isolated adjustment. In March, Holmen reduced production at its Bygdsiljum sawmill by approximately 30,000 m\u00b3 as disruptions to trade with the Middle East made several important export routes increasingly expensive.<\/p>\n The mill has considerable exposure to Middle Eastern markets. Higher freight rates and disruptions to shipping into the Persian Gulf made deliveries more difficult, while freight costs to Saudi Arabia rose to levels that led Holmen to suspend shipments to that market temporarily.<\/p>\n Around 20 positions were expected to be affected by the Bygdsiljum reduction.<\/p>\n The reasons behind the two cuts are different. Bygdsiljum was directly exposed to deteriorating export logistics and freight economics, while Linghem is being hit primarily by the combination of weak lumber demand and raw-material costs that Holmen says remain too high to support profitable production.<\/p>\n Together, the decisions remove around 76,000 m\u00b3 of planned annualised production from the two mills.<\/p>\n Wood Products loses \u20ac13 million despite stable volumes<\/strong><\/p>\n The pressure became particularly visible in Holmen's first-half results.<\/p>\n Wood Products reported an operating loss of approximately \u20ac13.1 million in January-June 2026, compared with a profit of around \u20ac1.8 million a year earlier. EBITDA fell from positive \u20ac11.3 million to negative \u20ac3.9 million, while sales declined 4% to approximately \u20ac186.7 million.<\/p>\n The deterioration was not caused by a collapse in volumes. Holmen delivered 674,000 m\u00b3 of wood products during the first six months, almost unchanged from 671,000 m\u00b3 in H1 2025.<\/p>\n This left the sawmills processing roughly the same volume of wood but generating substantially weaker returns. Holmen attributed the deterioration partly to lower income from wood chips and biofuels and a weaker US dollar.<\/p>\n The second quarter showed some improvement. Deliveries increased to 345,000 m\u00b3 from 329,000 m\u00b3 in Q1, while the operating loss narrowed from approximately \u20ac8.2 million to \u20ac5.0 million. EBITDA improved from negative \u20ac3.6 million to negative \u20ac0.3 million.<\/p>\n Raw-material conditions also started to move in the right direction. Competition for logs eased and sawlog prices declined from exceptionally high levels during the quarter.<\/p>\n But the improvement was not sufficient to return Wood Products to profit. Its Q2 operating margin remained negative at 5%, compared with a positive 2% a year earlier.<\/p>\n Swedish sawlog prices remain central to the problem<\/strong><\/p>\n The Linghem decision underlines how slowly the improvement in Sweden's raw-material market is feeding through to sawmill profitability.<\/p>\n Swedish sawlog prices climbed sharply during 2024 and 2025 as mills competed for increasingly expensive raw material. Although prices began falling in early 2026, they remain high compared with historical levels.<\/p>\n Average harvesting-assignment prices in Sweden declined during the first quarter by around 4% quarter on quarter for pine sawlogs and 6% for spruce sawlogs. At the same time, inventories of softwood sawlogs increased substantially, reaching 4.6 million m\u00b3 at the end of March.<\/p>\n Holmen has also benefited from additional timber entering the market following the major storm in central Sweden at the end of 2025, which brought down around 10 million m\u00b3. Approximately 0.5 million m\u00b3 of storm-damaged timber was located on Holmen's own forest land.<\/p>\n The additional supply has helped reduce some of the extreme competition for logs. For Linghem, however, the adjustment has evidently not gone far enough. Holmen's decision indicates that the spread between the cost of sawlogs and the value of finished lumber remains insufficient at the mill's previous production level.<\/p>\n Holmen simultaneously expands Iggesund<\/strong><\/p>\n The production cuts come while Holmen is expanding capacity elsewhere in its sawmill network.<\/p>\n In July, the company completed the largest modernisation programme in the history of its Iggesund sawmill following an investment of approximately SEK 500 million (\u20ac43 million).<\/p>\n The project increased Iggesund's annual production capacity from around 380,000 m\u00b3 to 460,000 m\u00b3, an increase of roughly 21%. The investment covered the sawline, kilns, timber sorting, planing and downstream processing.<\/p>\n The mill had reached around 90% of its targeted production level by July.<\/p>\n Importantly, the investment is not simply intended to increase lumber output. Holmen has expanded planing and further-processing capacity at Iggesund, allowing a larger share of production to be sold as finished or semi-finished wood products.<\/p>\n The contrast between the three mills provides a clear picture of Holmen's production decisions during 2026:<\/p>\n Source: Holmen \/ GWMI<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":" Holmen will cut production at its Linghem sawmill in Sweden by almost two-thirds as historically high sawlog costs and weak lumber markets continue to squeeze its Wood Products business. It is the second significant production reduction announced by the group … Continue reading \n\n
\n \nSawmill<\/th>\n 2026 decision<\/th>\n Volume \/ investment<\/th>\n Main factor<\/th>\n<\/tr>\n<\/thead>\n \n Linghem<\/strong><\/td>\n Production cut<\/td>\n 72,000 \u2192 26,000 m\u00b3\/year<\/strong>
\n\u221246,000 m\u00b3 \/ \u221264%<\/span><\/td>\nWeak lumber market and high sawlog costs<\/td>\n<\/tr>\n \n Bygdsiljum<\/strong><\/td>\n Production cut<\/td>\n \u221230,000 m\u00b3<\/strong><\/td>\n Middle East trade disruption and higher freight costs<\/td>\n<\/tr>\n \n Iggesund<\/strong><\/td>\n Capacity expansion<\/td>\n 380,000 \u2192 460,000 m\u00b3\/year<\/strong>
\n+21% \/ SEK 500m (\u20ac43m) investment<\/span><\/td>\nModernisation, efficiency and further processing<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n