Sweden’s largest forest industry group, Södra, has axed 200 positions as the pulp producer restructures operations.
Global uncertainty has hit both demand and pricing, the company said, leading to an overall financial impact requiring decisive action. Södra cited rapid currency fluctuations, geopolitical uncertainty and an imbalance between raw material prices—plus the sales prices of its products—as negatively impacting profitability.
That resulting decisive action affects the entire organization. The 200 redundancy notices hit all three of Södra’s pulp mills—in Mönsterås, Mörrum and Värö—as well as its corporate office in Växjö.
Related Stories
“We are in a situation that requires decisive action to strengthen our long-term position,” Lotta Lyrå, president and CEO of Södra, said in a statement. “We recognize that this decision affects both people and operations. We take responsibility to ensure the changes are made with the greatest possible care. During the process, we will offer support to affected employees.”
The action program is “essential to ensure the company can continue to invest,” per Lyrå, as well as to develop its offering and provide competitive prices for the forest raw materials supplied by the members of Södra.
“Forest products are a crucial part of the green transition, which is why Södra’s strategy remains firm—to make more from every tree,” Lyrå said. “We remain focused on meeting our customers’ needs, where long-term relationships and trust form the foundation of our business.”
Moving forward, the cooperative’s mission will be renewing and refining the value of the forest estate, Lyrå said—something that “requires us to be competitive across our entire value chain and operations, regardless of external conditions,” she continued.
“To succeed, we need to both accelerate and decelerate: continue investing in the future, while also adapting our operations to new realities.”
Canopy’s annual Hot Button Report highlighted Lenzing’s OnceMore partnership with Södra to create up to 60,000 tons of product made with 50 percent recycled cotton and 50 percent wood pulp. The Austrian leader uses this chemically-processed pulp—of which at least 20 percent is recycled textile waste—as a key ingredient in its Refibra recipe, as the technology uses pre- and post-consumer cotton as a raw material.
Lenzing and Södra have been collaborating on developing wood-based textile pulp since 2011. A decade into working together, the partners added textile recycling into the mix. They signed a cooperation agreement in June 2021 to keep doing just that—just more tailored explicitly to Tencel.
In November 2023, the effort earned its cross-border collaborators an International Textile Manufacturers Federation (ITMF) award for “international cooperation” in recognition of the joint project, named Life Treats (short for Textile Recycling in Europe At Scale). Less than six months earlier, EU LIFE showed Life Treats support by way of a 10-million-euro ($10.9 million) subsidy—marking the climate action program’s largest funding ever granted.
Moving OnceMore forward, the partners have been working to reach an annual processing capacity of 60,000 tons of pulp by 2027 since June 2023, per Lenzing—an uptick from its 2021 target to process 25,000 tons by 2025.
“The biggest challenges remain to adapt the characteristics of recycled pulp for industrial fiber production and also to seek solutions to make recycled pulp processable on industrial scale,” Lenzing reported at the time.
At present, it’s unclear just how many tons of textile waste have been processed; neither shared specifics. That said, Lenzing’s annual report lists a new goal: to recycle and process 50,000 tons of textile waste per year at Södra’s Mörrum site by 2029.
“Sluggish conditions on the textile market slowed growth in the sector, as the cost structure does not yet allow for higher volumes,” Lenzing’s annual report for 2024 reads. “Due to current market challenges towards circularity such as the lack of demand from the market the number of key supply chain partners has been reduced from 25 to 15.”
