Production strategies in the Swedish softwood sawmilling industry

The strategic production decisions to improve profits for sawmills can be described in three main dimensions. More value-added production increases unit revenues, larger volumes reduce fixed costs per produced unit, and improved productivity reduces unit costs. Using data about the Swedish sawmills and cluster analysis, six groups of sawmills were defined with these strategy dimensions. Characteristics of each strategy are presented concerning ownership, location, technology, and economic indicators. The results indicate that different groups of Swedish sawmills employ different production strategies, which are reflected both in the dimensions, value-added shares, size, productivity, and by other technical and economic characteristics of the sawmills. The relationships between production strategy and profitability is also analysed and discussed.