Setra Reduces Production in Långshyttan, Sweden

On Tuesday, Setra Group announced that it will transition its Långshyttan, Sweden, CLT and wood component facility from a continuous production to periodic production operation. This adjustment, aimed at ensuring long-term financial stability, will result in 60 layoffs.

While CLT and wood component production (windows and doors) will be scaled back, glulam production will continue unaffected. The pellet factory in will also be unaffected.

Setra has invested approximately SEK 550 million (US$54.7 million) in the Långshyttan wood industry center since 2018. However, the overall Scandinavian market climate for the wood industry has been challenging, with supply significantly exceeding demand. Several wood industry companies in Sweden and Europe have invested in CLT at the same time as the recession has created reduced demand from the construction sector, Setra said. In addition, a shortage of timber has driven prices to their highest level in three decades.

The company intends to resume continuous CLT production when market conditions improve. As part of its forward-looking strategy, Setra is initiating a strategic partnership for the supply of CLT with Mayr-Melnhof, one of Europe’s leading producers in this field. This collaboration aims to enhance Setra’s technical offerings and expertise for customers in the Scandinavian market.

In a statement accompanying the announcement, Marcus Westdahl, President and CEO of Setra Group, said:

“Rising timber prices, declining demand in the construction sector, and a surplus of CLT and wood components have significantly impacted profitability. This operational shift in Långshyttan is a difficult but necessary decision from a business standpoint.”