BSW's Fort William site.
BSW to invest in Fort William and Latvian mills
Published: 26 October, 2011
SCOTLAND/LATVIA: BSW Timber has announced further investment plans to expand capacity at both its Fort William and Latvian mills in a drive to produce more than 1.3 million m3 of sawn timber a year across all its sites.
The investment follows strong annual results showing BSW's profits up 280% to £12.4m for the year ended March 2011. The new plans are a major part of the company's £50m investment programme over a five-year period to 2015.
The expansion plans of the Fort William mill began three years ago, creating around 45 new jobs at the sawmill. Since 2008, the site has benefited from 10 new Mahild kilns and a battery of pressure treatment vessels. Current projects nearing completion include two 5MW KIV biomass kiln heating plant and a high-speed planing and grading line, provided by Ledinek and Springer.
To complete the current investment phase at the site, an order has been placed for the latest Hewsaw SL250 3.4 Trio line which has been extended to include an automated horizontal saw, allowing for maximum flexibility.
An agreement has been reached to purchase the equipment from the technically enhanced Finnforest, Kyroskoski sawmill, which was mothballed in 2009.
The equipment will be used not only to create a world-class mill at Fort William but also to double the capacity at the BSW Latvia operation. Work on the new sawmills will commence in November this year, and will be completed by early 2013.
Tony Hackney, chief executive officer of BSW Timber, said: "Going for growth is a theme that has driven the strategy for BSW Timber since the 1990s. The development of flexible and high capacity mills with the latest technology to provide first class home grown products is an essential part of the company plans.
"For some time the development at BSW's colossal Fort William site at the foot of Ben Nevis has been postponed in favour of growth through the acquisition of Howie Forest Products in Dalbeattie – the largest sawmill in the UK and one of the largest in Europe.
"Howie's has been a part of the BSW Group for more than two years now and, with an excellent group financial performance in the last two financial years, the BSW shareholders have shown continued commitment to investment of the cash generated and have approved the next phase of the multi-million pound investment programme." "
Mr Hackney added that these strategic investments were a sign of BSW'sconfidence in the UK market in the medium-term.
BSW Timber's results for the year ending 31 March 2011 showed profit after tax up 280% to £12.4m (2010: £4.4m); turnover up 48% to £163m (2010 £110m); capital employed increased 33% to £54.2m (2010 £40.7m) and an increase in cash inflow from operating activities up 52% to £27m (2010 £17.7m).
"All the BSW mills have been active," said Mr Hackney. "It is particularly pleasing to see a better cash position at the end of the year, having both paid off the senior debt raised to acquire the Howie Group, as well as investing £10.5m in new capital equipment.
"Despite a fragile market, the result has been achieved thanks to a combination of record production levels, increased market share, cost control, the benefit of a reasonable raw material cost at the beginning of the year and an advantageous exchange rate."