The sawmill is included with your city lands as your last battle prize. The sawmill produces wood. You can use wood to build and upgrade other buildings. As you upgrade the sawmill you increase both the amount of wood held and the amount of wood you produce. You also gain Xp points to boost your city level. There is a total of 2 sawmills to gain during the game. You will be able to access the second sawmill when the HQ is at a high enough level. In order to upgrade the sawmill, the HQ needs to be at a certain level.