Wood-based building and interior products manufacturer Swiss Krono Group has proved with its newly-released 2021 annual results that it is possible to have business success even during a global pandemic and with general supply chain challenges and raw material cost inflation.
Demand in most sectors of the wood product industries has, of course, held up very well during the past 20 months, with manufacturers boosted by trends of home working, home schooling and garden development projects.
For Swiss Krono, which operates wood-based panels production operations and interiors and flooring divisions, its consolidated annual net turnover for the fiscal year ended September 30, 2021 has seen a 24% increase to more than CHF2.1bn.
Rewind 12 months and the Group had seen an 8% decline in turnover for the previous fiscal year due to the initial market shock of the pandemic, like many other operators in the wood-based sectors.
So, the pandemic-impacted decline of 2020 has been more than compensated by the performance in 2021.
In local currencies, the turnover growth rate for 2021 increased by +28% in comparison with the previous year, while the threshold of an annual production of 6 million m3 was exceeded for the first time.
It’s important to look at these figures as they represent one of the first provisional 2021 annual results to be released in the wood-based panels and wider wood sector.
Swiss Krono is a global company operating over a number of different markets in various countries, so it can provide us with a signal of the economic health of the industries.
Lucerne-based Swiss Krono employs around 5,000 employees at 10 production sites across the globe, with eight national companies operating in Switzerland, France, Germany, Poland, Hungary, Ukraine, Russia and the US. Their products are distributed in 120 countries.
Founded in 1966 by Ernst Kaindl in Menznau, the first plant opened in France more than 30 years ago. This was followed by branches in Germany, Poland and the US. The turn of the millennium saw three plants in Ukraine and sites in Russia and Hungary.
Panel products include OSB, MDF, HDF and particleboard. It also has the MagnumBoard system – multiple layers of OSB4 boards laminated together to form walls, ceilings and roofs in a single-skin wood-based construction system – and Longboard OSB, which is a super-large format OSB in lengths up to 18m.
It also runs decorative product and laminate flooring divisions.
PANDEMIC BOUNCE BACK
Today, Martin Brettenthaler, CEO and president of the executive committee, runs the Swiss Krono operating businesses.
“Swiss Krono has grasped the opportunities that presented themselves to us after the second Covid wave,” he said.
“Every single individual in the company contributed towards this.”
However, he added, the company was not resting on its laurels with a view to the coming fiscal year:
“We are operating in a highly dynamic and complex economic environment and find ourselves confronted with the challenge of steeply rising prices for raw materials. Increasing digitalisation, climate protection and the circular economy will hold both opportunities and challenges for the future.”
All business divisions made significant contributions towards profitable growth and have been strengthened by focused investments, said Mr Brettenthaler.
In terms of turnover for the year ending September 30, 2021: the largest division, Flooring, increased by +13%, Building Materials/OSB by +31% and Interiors by no less than +33%.
In its Division Flooring, Swiss Krono deliberately concentrated on laminate flooring due to its price-performance ratio in the hard floor coverings market.
In the past fiscal year, it increased sales to almost 160 million m2. With the expansion of HDF production for the Group’s own laminate production in the US and the startup of a new digital printing line for decor paper at the Heiligengrabe site, the strategy of increasing the Group’s own vertical integration was consistently implemented.
The Group expanded its product line with Corepel, a highly resilient and water-resistant wood-based floor, which Swiss Krono claims is the first of its kind to contain an encapsulated wood core. This feature, it says, makes it totally waterproof and resistant even under extreme conditions.
Swiss Krono received the Red Dot Award for the cross-media appearance of Corepel.
BUILDING MATERIALS DIVISION
The Building Materials/OSB business unit was characterised by very good demand, but also by rapidly rising timber, chemical, energy and transport costs, which in addition to consistent cost management necessitated a continuous adjustment of selling prices.
The growth targets set out in the Group strategy in the Building Materials/OSB business unit – especially through expansion and new installation projects – were pursued, with each plant gradually being expanded to the annual capacity identified by Swiss Krono as the optimum operating size.
In addition to the ongoing construction of a new plant at Sharya, Russia, with start-up in 2023, production at the Heiligengrabe site was expanded by +25% to 600,000m3. Production at the sites in Sully, France, and Vásárosnamény, Hungary, is planned to be increased by a similar amount.
The Interiors division is being strengthened and expanded through targeted investments. For example, further optimisation of the waste wood treatment plant at the Menznau site in Switzerland increased the proportion of recycled wood in particleboard to 35%.
The Group sees climate protection and sustainability as both a challenge and an opportunity for the wood processing sector.
In the past year, the development of the Swiss Krono Sustainability Strategy began. Its starting point was the determination of the Group’s CO2 footprint in an analysis of the Scopes 1, 2 and 3 in accordance with internationally recognised standards.
The result: Swiss Krono is directly or indirectly responsible for the emission of around 3 million tons of CO2 equivalents every year. But the fact that its products are made from sustainable wood means there is a carbon sink effect of about 6 million tons of CO2 equivalents each year as a result.
Elsewhere, changes to the Swiss Krono Holding AG board of directors include the following:
Dr Reto Müller is the new chairman, after previous chairman, Dr Wilhelm Hörmansede, left the board for personal reasons.
Appointed by Ines Kaindl-Benes, Dr Müller was elected as new chairman of the board at the general assembly held on November 30, 2021.
As a co-entrepreneur he was long-time CEO and founding partner of the Helbling Group and today works as a professional supervisory board member for a number of industrial enterprises.
