CEO’s comments

Green steps forward

2020 was a year like no other, with the coronavirus pandemic having an impact on us all. For us at Setra, however, it is pleasing to note that the sharp drop in the market in spring was unexpectedly short-lived. The year as a whole was distinguished by high demand and strong development in our profits.

When I took over the position of CEO in January 2020, I could not imagine that remote working and video conferencing would come to dominate our working lives. For much of the year, those of us at Setra with the opportunity to do so have worked from home, while we have introduced a range of procedures in our production units to provide the best possible protection against infection. I am proud that our entire organisation has stepped up to shoulder its responsibility at this extraordinary time. Thanks to our employees’ commitment and sense of responsibility, we have been able to tackle all the challenges that have arisen.

For a number of turbulent weeks in the spring, COVID-19 caused our markets to plummet, but our subsequent recovery proved to be swift and strong. One of the reasons for this is that activity remains high in the construction industry, at the same time as enthusiasm for DIY is on the rise around the world. Starting in April, Setra experienced fantastic development on almost all markets. China led the way, followed by Scandinavia and the rest of Europe. During the summer, we also began to note a strong increase in demand in the United States, which is a major growth market for us. The same applies to Australia and the UK.

High demand has led to rising prices, which has naturally benefited our profit margins. The fact that our sales and production departments have had the capacity to handle these market variations laid the foundations for strong development in our profits.

The year in figures

The Setra Group’s operating profit for 2020 totalled SEK 107 million, corresponding to an increase of SEK 77 million on the previous year. Net sales amounted to SEK 4,131 million (compared with SEK 3,924 million in 2019).

In October 2020, Setra sold Rolfs sawmill in Kalix to Stockhult Holding, which already owns another sawmill in Norrbotten and is keen to resume operations.

Market conditions continue to look promising for 2021. Over the coming years, we will increase the production volumes at our existing plants in order to confirm our market position. There is appreciable potential in our units in Bergslagen and at Setra Malå in Västerbotten. In Malå, we are planning to apply for a new operating permit so that we can double production of wood products and expand our processing operation.

Hi-tech solutions

In spite of the pandemic, we have succeeded in continuing our strategic work, which entails developing our product portfolio so as to be able to supply hi-tech building solutions and other highly processed construction products. Our new trimming and planing line in Hasselfors was officially opened in 2020 and produces precisely the type of planed construction timber that is in high demand in the UK and the US, for example.

In Långshyttan, we have opened our new factory for Cross-Laminated Timber (CLT), supplying products that are currently attracting a good deal of attention. Setra is delivering CLT to the Cederhusen project in Hagastaden, Stockholm, which will be the city's first modern residential area in wood.

Working to promote wood as a construction material is one of our business goals. It is also an approach that aligns neatly with society’s climate goals and the transition to renewable materials in the construction industry. Another example of how we are making a tangible contribution to the green transition is the plant for producing pyrolysis oil that we, in partnership with Preem, will be bringing online in Gävle in autumn. Here, sawdust from Setra’s operations will be converted into energy-packed bio-oil, which is subsequently refined to make renewable fuel. The bio-oil will contribute to achieving Sweden’s stated goal for fossil-free transport in 2030.

Climate neutrality in 2030

Initiatives such as this are fully in line with Setra’s vision of Grönsamhet – Green profit. That is why it is only natural for us to have the stated aim of becoming climate neutral ourselves by 2030. Our core business generates little climate impact; making wood products does not leave a big footprint. However, there are always areas that can be improved, particularly when it comes to transport. We can cut diesel consumption, use electric forklifts and optimise load factors. In addition, we are committed to tightening up our planning in every link of the value chain, introducing smarter flows and ensuring that we always make the best use of all raw materials so as to produce optimal value.

These are examples of how we plan to continue developing, supplying the products that society and our customers are demanding, becoming more resource efficient and, at the same time, increasing our profitability. This is truly living and working in a green profitable manner, and in this context we will become even better at specifying the measures that lead to improved climate benefit for us all.

Katarina Levin, CEO

Our entire organisation has shouldered great responsibility at this extraordinary time