Mercer International is moving ahead with a restructuring of its Torgau wood-products facility in Germany that is expected to reduce the workforce by approximately 350 positions.
The company first disclosed the initiative on July 14, 2026, and reiterated its scope in its second-quarter results. The restructuring is intended to align the facility’s capacity and operations with current market conditions.
The initiative will be implemented in stages through the second quarter of 2027. An initial reduction of approximately 100 contractor positions was completed in July 2026 and is included in the overall total.
High Fiber and Energy Costs Weigh on Operations
Mercer said its Torgau operations have been affected by weak markets, global economic uncertainty and elevated raw material and energy costs.
Fiber availability has tightened in Germany as energy producers compete with the forest-products industry for wood and sawmill residuals. Mercer expects per-unit fiber costs at its German mills to remain elevated during the third quarter.
Across the company’s lumber operations, fiber represented approximately 85% of cash production costs during the second quarter. Per-unit fiber costs for lumber production increased by about 28% from a year earlier because of reduced supply and strong demand.
Mercer nevertheless expects a modest decrease in sawmill fiber costs during the third quarter as regional curtailments improve sawlog availability.
Technology and Product Changes Underway
Mercer Torgau plans to reduce about 350 positions by Q2 2027 as it restructures operations amid high fiber and energy costs.Mercer Torgau has also taken steps to improve its operating performance through technology and changes to its product mix.
The facility installed new scanning technology designed to increase the production of higher-value dimensional lumber meeting target grades. The investment is also intended to support increased exports to the United States.
The restructuring includes further adjustments to the facility’s product portfolio, although Mercer has not provided details on the products or production capacity affected.
Solid Wood Results Reflect Market Pressure
Mercer’s solid wood segment generated revenue of $134.2 million in the second quarter of 2026, an increase of approximately 14% from $117.3 million a year earlier. Segment operating EBITDA, however, declined to negative $8.2 million from negative $4.9 million.
Lumber revenue fell 15% to $56.6 million as sales volume decreased 17% to 100.3 million board feet. Average lumber sales realizations increased to $565 per thousand board feet from $550 a year earlier.
Lumber production remained comparatively stable at 123.8 million board feet, up from 120.2 million in the second quarter of 2025.
The U.S. market accounted for approximately 49% of Mercer’s lumber revenue and 43% of its lumber sales volume during the quarter. Most of the remaining lumber sales were made in Europe.
Demand Expected to Remain Weak
Mercer expects lumber demand to remain weak during the third quarter because of high U.S. interest rates and continued economic headwinds in Europe.
The company has nevertheless observed an upward trend in North American lumber prices, supported by low customer inventories and production curtailments. European supply has also contracted, but weak demand has limited the effect on regional lumber prices.
Mercer International is a forest-products company with operations in Germany, the United States and Canada. Its solid wood activities include lumber, cross-laminated timber, glued-laminated timber, pallets and biofuels.
