Sawmill company has faced challenges in Europe

sfretwell@thestate.comFebruary 17, 2013 

— Klausner, a private Austrian company that operates two saw mills in Germany, draws praise for its lumber milling process and its ambitious efforts in the business world.

But it also has had dust-ups with competitors, a skirmish with an environmental group, and financial struggles related to the economy.

The Klausner Group is headed by Fritz Klausner, who expanded the business’s nearly 100-year-old saw milling operation in the early 1990s. In addition to its German mills, the company’s holdings include offices in four countries.

One of those offices is in Myrtle Beach. Klausner opened the office in 2000 as part of an agreement to export lumber to the United States, at one time a major market. The company now is looking to build a mill in Orangeburg County.

“You’ll be lucky if you get that kind of operator,’’ University of Georgia forest business professor Tom Harris said. “This is not a fly-by-night scheme. These guys are solid lumber people.’’

Attempts to reach Klausner officials for comment were unsuccessful last week, but the company’s website says its mills “are known to be among the most productive worldwide – and always a step ahead.”

After years of boom times in the 1990s and early 2000s, however, the collapse of the U.S. housing market and a weakened U.S. dollar caused Klausner to scale back its operations, say those familiar with the company. The Economic Journal UK said in 2008 that Klausner was “in financial turmoil” and a financial restructuring plan was under way. Eventually, Klausner sold two German mills to a Russian company, according to news reports in Europe.

Meanwhile, sawmill operators in central Europe have been upset with what they say are favorable government subsidies for Klausner. Klausner, for instance, received indirect subsidies for a mill in Bavaria through a contract for the Bavarian State Forest, said Hans Michael Offner, a former president of the European Organization of Sawmills. The contract allowed Klausner to buy logs from the Bavarian state about 30 percent cheaper than other saw mills, prompting criticism from competitors, he said.

In 2003, Klausner drew scrutiny from the World Wildlife Fund in a study of illegal logging in northwest Russia. The study said Klausner Nordic Timber was one of Germany’s top importers of wood from Russia. But the report said Klausner and some other companies did not have reliable systems of tracing the origin of trees they were buying.

Klausner disputed the findings. “When importing round timber from Russia, we do demand from our suppliers that they abide to the legal commandments of their countries,” the company said at the time.

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