Finnish forest industry in January-June 2010: Production volumes approach pre-recession levels

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“The Finnish forest industry has improved its competitiveness and profitability as well as strengthened its position in the recovering markets. The effects of the extensive structural change are beginning to show and competitive mills have been able to increase their production volumes as demand has risen. A livelier timber market and increased electricity consumption are both indicators of how production is growing,” says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.

“The economy is recovering and things are looking up for the industry, but the effort to improve the domestic operating environment and profitability must continue. At the moment, energy and raw materials cost pressures in particular are significant causes of concern.”

“The forest industry’s energy and fuel tax bill threatens to increase by over €90 million in just a couple of years if the tax hikes, which were proposed by the Ministry of Finance, are introduced into next year’s State budget unamended,” Timo Jaatinen points out. Finnish energy taxes are already substantially heavier than those of other countries and the planned hikes would increase this burden substantially.

According to the Finnish Forest Industries Federation’s advance data the value of the forest industry production was over €9.5 billion in January-June. €3 billion of this was generated by the wood products industry and €6.5 billion by the pulp and paper industry.

In addition to the increased production volumes, strengthening demand has boosted pulp and sawn timber prices. This has contributed to the rise in the value of production. The value of second-quarter production is forecast to have risen to some €5.2b, which is 50% more than in the corresponding period of 2009.

The forest industry has driven Finnish exports into robust growth territory during the early part of the year. The value of forest industry exports (furniture included) in May increased by 35% from 2009. The total value of Jan-Jun forest industry exports was €4.1 billion, which is 18% more than in the corresponding period of 2009. Forest industry products accounted for 22% of overall goods exports.

For further information, please contact:
Timo Jaatinen, Director General, Finnish Forest Industries Federation, tel. +358 9 132 66 00