Finnish forest industry in January-June 2013: European market situation remains challenging – domestic costs must be kept in check

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“The forest industry cannot cope with the constant rise in domestic costs,” said Timo Jaatinen, Director General of the Finnish Forest Industries Federation.

"Costs have risen in Finland in spite of the recession. All additional burdens created in Finland erode the competitiveness of the export sector.  In Finland we need political decisions, which promote the operating conditions of export companies fast and with a long-term impact,” Timo Jaatinen continued.  

The forest industry accounted for more than 20% of the overall value of Finnish exports in January-May. The pulp and paper industry was responsible for a little under 16% of this, while the wood products industry accounted for over 4%. January-June forest industry production increased slightly above the level recorded in the previous year.

“The efficiency-enhancement measures implemented by the forest industry have contributed to the retention of domestic production operations,” Jaatinen pointed out.

Paper industry in difficulties, pulp and paperboard production increase

Paper industry production contracted in the first half of 2013 especially because a structural decrease in demand for graphic paper grades and because of lower consumption brought about by the economic downturn. January-June graphic paper production came to a total of 3.1 million tonnes, which is 3.8% less than in the previous year. Graphic paper grades account for some 60% of overall Finnish paper production and European consumption of these products fell more than 6% in the first half of 2013 from the corresponding period of 2012.

January-June paperboard production came to 1.5 million tonnes, which is 10.9% more than in the corresponding period of 2012. Investments into Finnish paperboard production capacity boosted production volumes. 

January-June pulp production came to 3.6 million tonnes. Production was up 4.4% from the corresponding period of 2012.

Uncertainty continues to affect the sawmill and plywood industries

The European economic downturn continued to depress demand for the products of the sawmill and plywood industries and exports to Europe reduced 2%. The wood products industry has received a welcome boost from exports to markets beyond Europe, however. Exports to non-European markets were up 16%. The outlook for the sawmill industry remains poor, as no rapid improvements in economic conditions are expected.

Sawn timber production increased 5% in the first half of 2013 to 5.3 million cubic metres when compared to the first half of 2012. Plywood production increased correspondingly by 5% to some 550,000 cubic metres in the first half of 2013.

Timber sales livelier than in the previous year

Timber sales activity was livelier in the first half of 2013 than it was in the first six months of 2012. The forest industry procured 16.2 million cubic metres of wood in January-June 2013, up about 8% from the corresponding period of 2012. Sawlog purchases came to 7.3 million cubic metres and pulpwood procurements to 8.3 million cubic metres.

Stumpage prices increased slightly from the previous year. The price of wood is high when compared to the market prices fetched by forest industry end products – this adds to the industry’s cost burden and erodes the competitiveness of Finnish companies on the international markets.

Further information:
Timo Jaatinen, Director General, Finnish Forest Industries Federation, tel. +358 9 132 6600