Södra Announces New Group Strategy for 2014-2020

After a number of months of intensive and comprehensive work mapping out its way forward, Södra, Växjö, Sweden, reports that the company’s board has now made a formal decision on a new group strategy, a collective way forward that will allow employees and owners together to face new challenges and make the most of the opportunities offered by a changing world. Following a period in the early 2000s when the company achieved rapid growth and good profitability, Södra has seen a phase in which profits have been down and growth has stagnated. Changes such as a reduction in the allocation of electricity certificates and industry restructuring will also affect Södra. A new collective strategy has been devised so that the company can adapt to new situations. 

First, Södra says it must become a more unified group –one Södra. This will be done so that shared resources can be used more effectively and also to allow staff to work more efficiently. A clearly unified Södra will also reinforce the way in which the company is perceived by everyone else, so strengthening the Södra brand.

It is also important to focus on growth, the company emphasizes. Growth is a prerequisite for adding value for Södra’s owners in the long term. Companies that fail to grow lose their competitiveness and do not develop. Södra’s business is based on creating an outlet for its members’ timber and using the industry to give them a share of the profit from processing. The markets for Södra’s products are growing by 3% - 5% each year. Much of this growth is not taking place on existing, mature markets, but on the rapidly growing Asian markets. And Södra has to be part of this, it notes.

Growth is vital to all business areas, but the ways in which they will grow will vary slightly, according to Södra, which adds that investments have to be made in a number of areas. For the pulp business, extensive investments at the mill are planned to take place during the strategy period. This means that production and turnover will increase. Investing with a view to increasing production capacity is vital if the company is to ensure the competitiveness of Södra Cell.

For the sawmills, growth will mainly involve making the most of the opportunities provided by earlier investments. The same is true for the interior wood business and Trivselhus. For Södra Skog, the increase in production will result in a need to increase its timber supply. 

All industrial operations must become 2% – 3% more efficient each year to handle their relative competitiveness, Södra continues. This means that Södra has to work smarter and improve continually, it points out. Processes and working methods must be reviewed, in all respects and in all parts of the group, and Södra has to derive the full benefit from the huge investments that have already been made. 

Södra also has to become even better at adding value for its customers. Among other aims, the company has to move from concept to new product more quickly and give customers access to both excellent products and outstanding expertise, Södra emphasizes.