Violent fluctuations in raw material costs serve to increase the sector’s sensitivity to economic fluctuations.
The steady inflow of wood at a competitive price level is essential to profitable production and investments in the forest industry in Finland. The sector’s profitability is well under the target level, despite the economic upswing. With raw material and labour costs rising dramatically, any gain from stepping up operations is threatening to evaporate.
"A steady supply of wood raw material at a competitive price level is extremely important to Finland’s economy as well. If wood is procured from private forests at the forest industry’s target rate of around 60 million cubic metres a year, which is 15 million cubic metres more than in 2006, Finland’s GNP will increase by well over 900 million euros. Approximately 300 million more euros in taxes from wood sales and processing would be collected by the State”, says the Finnish Forest Industries Federation’s managing director Anne Brunila. "Every single cubic metre of wood obtained from domestic sources increases the tax revenue of the State - of all Finns - by over 10 euros."
Raw material costs for Finland’s forest industry are higher than in many competitor countries
The mill costs of softwood logs in Finland are considerably higher than in competitor countries. The difference between Finland and Sweden, for instance, at present is almost 30 euros per cubic metre.
The spruce pulpwood used by the mechanical pulp industry is almost 20 percent cheaper in Sweden and the United Kingdom. In the world’s largest pulp producing country, the USA, pulpwood is 24 - 49 % cheaper than in Finland. In South America hardwood pulpwood is as much as 42 - 64 percent cheaper compared to Finland.
Last year, the industry used 9 million cubic metres of domestic spruce pulpwood for mechanical pulp production and 13 million cubic metres of pine pulpwood, together with 13 million cubic metres of birch pulpwood, for chemical pulp manufacturing. More than 12 million cubic metres of pulpwood was imported for industrial consumption, the largest proportion comprising birch.
In addition to stumpage prices, harvesting and transport costs to the mill affect the cost of wood.
Thermo-mechanical pulp is a paper raw material made using electrical energy for grinding up wood. Chemical pulp is a paper raw material made by cooking chipped wood.
Spruce log costs at mill.pdf
Spruce pulpwood costs at mill.pdf
Hardwood pulpwood costs at mill.pdf
Anu Islander, Senior Advisor, Forestry, Sustainable Development and Resources, tel. 358-9 32 6678