Gistel, March 9, 2021. PGS Group, a European leader in the production of new and used pallets, says it has confirmed its strategy for profound vertical integration into the wood packaging sector with the recent acquisition of Demey sawmills.
Demey operates sawmills in Ypres and Boezinge. It specializes in sawing pallet timber at a yearly capacity of 30,000m3 and has been a loyal supplier to PGS Group locations in Belgium for over 40 years. These sites include Gistel (PGS Rodanar Pallets) and Poperinge (PGS De Backer Pallets).
The acquisition takes place at a time when packaging timber is becoming scarce due to the strong demand from China and the US for construction and landscaping timber. As large sawmills, specialized in construction timber only, took advantage of many smaller sawmills closing down (more than half over the past 30 years) the wooden packaging industry is facing major challenges to secure supplies. Given the current market conditions and the future challenges the wood industry will be facing, this acquisition is fully in line with the historic and strategic vision of the PGS group. The integration of the Demey sawmills is a proactive and important step in the current consolidation within the sector,” according to the company.
“I am extremely pleased to welcome a historic partner of the PGS Group into our circle,” said Luc Grauwet, CEO of the PGS Group. “This acquisition is in line with the Group’s vision and ambition to set up a sustainable supply chain for raw materials. This is a real challenge for the wood packaging industry under the current market conditions.”
“The entry of the Demey group is the first acquisition of a new series of external growth operations that the PGS group intends to carry out in Europe to strengthen its network in order to secure the supply chain of wooden pallets for our customers,” added Jean-Louis Louvel, president and founder of the PGS Group.
“We are delighted to be able to position our third-generation company in a group that adheres to the same business philosophy and values as we do,” said Franz Demey on behalf of the Demey family. “Together with my brother, Bart, my son, Kristof and our employees, we will be able to continue to focus on the leading services that our customers are used to. In addition, the far-reaching collaboration with the PGS group opens up opportunities for the continuous growth of our companies.”
Demey, founded in 1979 and with the third generation in charge, has more than 40 years of experience in selling poplar and pine logs into pallet wood, packaging wood, and wooden blocks markets. It has a turnover of 10 million euro, with 20 employees, producing approximately 30,000 meters cubed of timber and 30,000 wooden vegetable crates on an annual basis. Its mission is to serve its customers, efficiently, quickly and at the best price-quality ratio.
PGS Group was founded in 1993 is a European leader in the production of new pallets, the reconditioning of pallets, and the related services of reverse logistics. Thanks to its European network the group is an important logistics partner in the wood packaging industry, operating in seven countries and in 42 sites. The Group realized a consolidated turnover of 252 million euros in 2020 and has 700 employees.