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Austria's HS Timber restructuring activity in Romania due to tough conditions

Austria's HS Timber restructuring activity in Romania due to tough conditions HS Timber factory in Radauti Source: HS Timber

BUCHAREST (Romania), January 19 (SeeNews) - Austrian wood-processing company HS Timber Group, formerly known as Holzindustrie Schweighofer, said it will reduce its timber cutting capacity in Romania's Suceava by a third at the end of the first quarter of the year due to difficult general conditions.

Staring March 30, part of operations in Radauti, specifically the sawmilling operations, will be stopped, while the production of posts and beams at the site will remain in operation, HS Timber said ina press release on Tuesday.

The panel plant in Siret, which processes sawn timber from the Radauti mill, will be closed down entirely.

With this step, the overall cutting capacity of HS Timber Group's sawmills in Romania will be reduced by 30%. HS Timber Group continues to operate two sawmills and one blockboard factory in Romania's Sebes, Comanesti and Reci, employing about 2,400 people. These factories are not affected by the restructuring and will be further strengthened, HS Timber said.

"One of the reasons for the restructuring is the ever-increasing challenges in Romania. The purchase of Romanian roundwood is restricted for HS Timber Group since 2016. Ukraine and Russia are not available markets for raw material purchase, due to export bans in force there," the company said.

"Furthermore, pending modernisation of railway infrastructure in the region, as well as laborious import bureaucracy, make timber imports from other member states of the European Union challenging. In addition, the production of green energy and selling of green certificates has been made more difficult. Larger investments required at the Siret site are not economically feasible under the current framework conditions," it added.

Roughly 600 employees will be affected by the restructuring, and the company is endeavouring to offer many of them continued employment within the group in Romania. In the other cases, efforts are being made to keep the social impact as low as possible.


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