Vertical integration at SDL Solutions- How the system works

Vertical integration at SDL Solutions means SDL controls key stages of the chain, from harvesting and site clearance through to sawmilling, biomass recycling, CHP, drying, and wood pellet production. This reduces handovers, improves material control, and supports more consistent outputs across the group.

In day-to-day operations, it means connected parts of the business operate as one joined system, so material has a clear route from sourcing through processing and into finished products.

Rather than relying on multiple third parties for each stage, SDL links forestry, site clearance, biomass recycling, sawmilling, CHP, drying, and pellet production. This supports better use of material, improved reliability of availability, and more consistent outputs across forestry, processing, CHP, and wood pellet manufacturing.

Replanting is currently delivered through an external partner, Nicholsons, with the long-term aim of bringing replanting capability in-house. SDL’s emphasis is on vertical integration that supports better use of material, fewer handovers, and more consistent outputs across forestry, processing, CHP, drying, 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 and type

  
  

The challenge

Before achieving the current integrated structure, SDL faced common constraints across forestry, clearance, and timber processing supply chains.

• Delays from third-party handovers. More links in the chain increased waiting and reduced control.

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

• Quality uncertainty. Moisture and chip consistency varied, which affected planning and processing.

• Higher reliance on bought-in material. External supply created inconsistency, fluctuating costs, and uncertain delivery timelines.

• Waste risk. When sorting and grading happens late, material can lose value or be pushed into less suitable uses, creating by-products without a clear end use.

  
  

The underlying issue was operational control. SDL needed stronger control over material access, quality, and end use, 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 early sorting stage that supports timber production at the mill. Timber is assessed and separated by size, form, and overall quality. This helps direct suitable sawlog material into sawn timber production from the outset, protects value, and improves conversion at the mill. It also reduces the risk of suitable timber sitting at roadside waiting for a decision or being 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 rather than waste.

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

Because these materials are generated and handled within one connected operation, moisture control and feedstock consistency can be managed to support wood pellet production. SDL’s wood pellets are ENplus A1, BSL, and Grown in Britain certified.

3) Site clearance to CHP. Repurposing woodchip

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 from tree surgeons as a tip site, and collections of woodchip 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 as a by-product. That heat supports drying woodchip. Drying is critical because sawmill by-products must be brought to a suitable moisture level before pellet production.

In operational terms, the structure connects as follows:

• Forestry harvesting supplies cordwood to the sawmill for sawn timber

• Sawmill by-products are routed as wood pellet raw material

• Site clearance and Houndswood provide suitable inputs to CHP (lower-grade woodchip)

• CHP supports the drying of high-quality woodchip

• Dried material supports wood pellet production

  
  

What this achieves

Because the whole system is connected, it addresses the earlier challenges through operational design, allowing SDL to plan proactively rather than react to supply gaps.

• 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 routes are connected and well-managed.

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

• 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 from third-party handovers, improve material access and quality consistency, reduce reliance on bought-in supply, and reduce waste through clear routes for each material grade.

What material goes to the sawmill in South Wales?

Timber grades suitable for milling, including cordwood, are directed to SDL’s sawmill in South Wales as part of the integrated chain.

What happens to sawmill by-products?

Chip and dust are used as raw materials to make wood pellets. Offcuts are processed and chipped, then directed into pellet raw material or biomass fuel routes depending on suitability.

What role does site clearance play in the system?

Site clearance provides suitable material that can be directed into CHP fuel, supporting energy generation and reducing waste risk.

What is Houndswood used for?

Houndswood supports biomass recycling and collections. Suitable material can be directed into CHP as part of the integrated route.

What does CHP do in SDL’s operations?

CHP generates energy and heat. Heat supports drying, and the system powers the wood pellet production plant.

Is SDL described as fully closed if replanting is external?

Replanting is undertaken through an external partner, Nicholsons. It sits within SDL’s future plans. SDL’s current focus is vertical integration across forestry, processing, CHP, drying, and pellet production.