Trækoncern delivers satisfactory result in a turbulent year
The wood-based group Nordic Wood Industries has produced wood solutions like never before in the past year. The group has thus landed a solid account on both the top and bottom line, where the progress is particularly driven by historically high activity in the construction industry, large acquisitions and, not least, an increasing demand for wood in construction.
We use more and more wood in Danish construction. According to an impartial report, prepared by Rambøll in 2021, the use of wood in construction has increased by a good 25 percent in the last decade. And that trend is clearly felt in the Nordic Wood Industries group, which consists of the companies Palsgaard Spær, Lilleheden, Roust Element, Roust Spær, Nviro – CBI Papiruld, Bisco Binder and Skandach Holzindustrie, all of which produce wood-based products.
The development is one of the reasons why the group can now publish a solid annual report with a turnover of DKK 834 million. This results in top-line growth of 77 percent compared to the previous financial year. A growth which is based on both acquisitions of new companies, increasing activity in the market and associated organic growth in the companies. At the same time, operating profit has increased significantly to DKK 90 million in 2021, which has been created through acquisitions, increased activity, a strengthening of synergies in the group and a number of internal improvements in all Nordic Wood Industries’ companies.
Looking broadly over history, wood is the most traditional building material that has been used in the world. And although in Denmark for the last 100 years we have had a large preponderance over other building materials, fortunately we see that it is gaining popularity again. Construction is demanding more wood as a result of the green agenda, and last year alone the demand for wood construction was historic. Today, there is a high level of recognition that wood in construction is an effective means of reducing climate impact and can help reduce CO2 emissions in Denmark. We have clearly noticed this development in our production and thus also in the accounts, says Group CEO of Nordic Wood Industries, Thomas Raunsbæk, who continues:
“In addition to the increased interest in wood, 2021 was also an exceptionally good year for the construction industry. The corona crisis really boosted extra activity around the Danish construction sites, and the weather was with us last year, when we had a mild winter, so the construction sites kept momentum. Having said that, we have certainly had challenges in the past year as well. Like many others, we have had to deal with large fluctuations in material prices and great uncertainty in relation to supply and freight. We are therefore very proud to be able to present a satisfactory account despite an uncertain market. That success is due, among other things, to the management of the individual companies and not least to the ability of the employees to maintain momentum and deliver an extraordinary effort – everyone has been ready for change and done their utmost in a year characterized by great fluctuations.”
Investing massively to keep up with demand
According to Thomas Raunsbæk, climate change continues to be a major driving force for increased timber construction. Wood has some unique properties as a building material, among other things due to wood’s renewability, which is essential for the construction of the future. And in order to keep up with the increasing demand for timber construction, the group has invested massively throughout 2021:
“At Nordic Wood Industries, we want to bring together good and strong actors within the wood industry and prefabrication, and therefore investments and acquisitions are a large part of our strategy, so that we can create broad and deep competencies within wood construction. In order to prepare for the future and not least to optimize our current processes, we have therefore invested massively during 2021 in everything from new factories, larger facilities to the latest robotic technology. In addition, among other things, we have worked with a clear Lean strategy and have had great success with it in the companies, where a good flow has been created and a positive gain for costs as well as increased well-being in our workplaces. We must be able to meet the demand for wood and wood-based products, and this also means that we have to invest,” explains Thomas Raunsbæk.
In the period, Nordic Wood Industries has, among other things, acquired the insulation companies CBI Papiruld and Isonem as well as the wood company Roust Træ, which was acquired in autumn 2020, which has had a positive impact on the accounts. But also on the product front, the organization has invested in developing new wood solutions that will make wood construction even more attractive:
- In the past year, we have developed significantly in wooden solutions, including a finished roof module solution, which means that the roof can be closed in a few hours, which ensures a shorter construction process and a better indoor climate in the house. We notice a significant interest in even more prefabrication, where the construction projects move into the factories, so that work can be done in good working conditions and where the weather does not play a role – and the roof modules are a good example of this. Therefore, we will also focus further on this part in the new year.
The construction of the future is sustainable
The high activity in the market has continued into the first months of the year, and so has the development internally in Nordic Wood Industries. This makes the group look positively at the future, but at the same time it is also expected that the current world situation will create a certain amount of uncertainty.
“2021 has been a turbulent year with the corona crisis and difficult delivery conditions, and seen in the light of the current uncertainty in the world, we, like everyone else, are looking into a year with a lot of uncertainty, where the highly fluctuating prices and delivery conditions may continue. But fortunately we are well equipped in our companies, which are gradually used to big changes, keep calm and ensure that customers get the best possible experience. We have a clear strategy for where we want to go – and we have already worked intensively on several initiatives to get there. Sustainability in the construction industry and timber construction is here to stay, and we have many exciting projects to look forward to in 2022 – that is why we have also had to ramp up strongly, which will be reflected in the accounts for 2022,” concludes Thomas Raunsbæk.
Nordic Wood Industries, which is based in Hampen in Central Jutland, thus enters 2022 with positive expectations for the coming year, where there will continue to be a large volume and demand for wood and wood-based products.