Vertical integration at SDL Solutions- How the system works

Vertical integration can sound like a corporate phrase. In SDL Solutions’ day-to-day operations, it is practical. It refers to how connected parts of the business work together, so material has a clear route from sourcing, through to processing methods and finally, into finished products.

Replanting is undertaken through SDL’s external partners, so the model is not yet fully closed loop, something the entire SDL Group is working towards in all sectors. SDL’s emphasis is on vertical integration that supports better use of material, reliability of material availability, and more consistent outputs across forestry, processing, CHP, and pellet production.

This approach is built around three outcomes:

• Stronger material control

• More consistent quality and planning

• Reduced waste through defined routes for each material grade/ type

The challenge

Before the integrated structure that is in place today, SDL faced common constraints seen across forestry, clearance, and timber processing supply chains:

• Delays caused by third-party handovers. Multiple links in the chain increased wait times and reduced control.

• Material uncertainty. Access, availability, and timing were harder to manage.

• Quality uncertainty. Inconsistent moisture and chip quality created planning and processing challenges.

• Higher reliance on bought-in material. External supply introduced additional inconsistency with the material and introduced cost pressure due to constant fluctuation.

• Waste risk. When sorting and grading happens late, material can lose value or be directed into less suitable uses, producing more by-products without an end use.

• The underlying issue was operational control. Improved control over access, quality, and end use was required, while also reducing waste.

The solution. Vertical integration in SDL terms

Vertical integration at SDL Solutions links forestry, site clearance, biomass recycling, sawmilling, CHP, drying, and pellet production. Rather than treating these as separate activities, the system is designed so each stage supports the next and material is directed to the most appropriate outcome.

1) Forestry to sawmill. Timber into building materials

SDL’s forestry operations produce cordwood and other timber grades. Cordwood is directed to SDL’s sawmill in South Wales, where it is converted into sawn timber products supplied into the UK building materials market.

Grading is the sorting stage that happens early in the process. Timber is separated by size, form, and quality so each load is sent to the right end use from the outset. This protects timber value, improves conversion at the mill, and reduces the risk of suitable sawlogs being delayed at roadside or mixed into lower-grade piles.

2) Sawmill by-products; Planned raw material for wood pellets

Sawmilling naturally produces by-products. Within SDL’s integrated system, these are treated as planned outputs, not waste.

The main by-products are woodchip and sawdust, which are used as the raw materials for wood pellet production. Offcuts are processed too. They are chipped and then directed either into wood pellet raw material or into biomass fuel routes, depending on quality and suitability.

Because these materials are generated on-site and handled within the same connected operation, moisture control and feedstock consistency can be managed to meet the requirements of En Plus wood pellet production.

3) Site clearance to CHP; Repurposing wood chip

SDL’s site clearance work provides a route for arb material to be directed into SDL’s CHP system. This supports energy generation and reduces the risk of usable material being mishandled or wasted.

Site clearance operations span estate management through to large roadside and highways projects, reflecting the range of material types and operational demands involved.

4) Houndswood; Biomass recycling and collections feeding CHP

Houndswood is a key intake point within SDL’s operations. It supports biomass recycling and collections that can also feed into CHP, providing a consistent pathway for suitable material.

5) CHP, drying, and pellet production. Linking energy to manufacturing

CHP is a central connection point between material intake and manufacturing. It generates energy and heat, and the heat supports drying. Drying is critical, as sawmill by-products must be brought to a suitable moisture level before pellet production.

In operational terms, the structure connects as follows:

• Forestry supplies cordwood to the sawmill for sawn timber

• Sawmill by-products are routed as pellet raw material

• Site clearance and Houndswood provide suitable inputs to CHP

• CHP supports drying

• Dried material supports wood pellet production

What this achieves

Because the system is connected, it addresses the earlier challenges through operational design, allowing SDL to be proactive, not reactive.

• Reduced reliance on third parties. Fewer handovers reduce delay and increase control.

• More consistent material access. Integrated routes support steadier planning and consistent stock.

• Improved quality control. Moisture and chip consistency are easier to manage when processing routes are connected.

• Better use of each grade. Timber is directed to timber markets. By-products support pellets. Suitable clearance and recycling inputs support CHP.

• Reduced waste. Defined routes lower the likelihood of material being downgraded through late sorting or poor handling.

• This is sustainability expressed through process. Better use of material. Clearer control of end use. Less unnecessary loss across the chain.

FAQs

What does vertical integration mean at SDL Solutions?

Vertical integration means SDL operates connected parts of the chain. Forestry, site clearance, biomass recycling, sawmilling, CHP, drying, and wood pellet production link together so material has clear routes and stronger control.

Why did SDL build an integrated system?

To reduce delays caused by third-party handovers, improve access to material, reduce reliance on bought-in supply, and improve consistency in moisture and chip quality.

What material goes to the sawmill in South Wales?

Cordwood from forestry is directed to the sawmill to produce sawn timber products for the UK building materials market.

What happens to sawmill by-products?

They are routed as raw material for wood pellet production, once dried to a suitable moisture level.

What role does site clearance play in the system?

Site clearance provides a defined route for suitable arisings into CHP, supporting energy generation and reducing waste.

What is Houndswood used for?

Houndswood supports biomass recycling and collections. Suitable material can be directed into CHP to support steady throughput.

What does CHP do in SDL’s operations?

CHP generates energy and heat. Heat supports drying processes, and the system supports the wood pellet production facility.

Is SDL described as fully closed if replanting is external?

Replanting is undertaken through external partners, so the model is not described as fully closed in absolute terms. The focus is on vertical integration that supports better use of material, fewer handovers, and more consistent operational outputs.