Forest industry production in Finland in January-March 2008: Wood sales expected to pick up – situation in the forest industries remains tight

Press releases |
Once forest taxation issues have been resolved, wood sales are expected to pick up clearly.

"The Government’s new forest tax package will support the development of the forest owner structure and encourage a reduction in the fragmentation of forest holdings, which is the right direction. The uncertainty that has slowed down forest wood sales has now been eliminated and we expect the supply of wood to pick up clearly after the poor first quarter," says Dr Anne Brunila, President and CEO of the Finnish Forest Industries Federation.

"Getting wood to market is in the interests of family forest owners and Finland as a whole. The value of forests is based on income from wood sales and the continued existence of profitable forest industry and numerous wood buyers," she adds.

Finland’s forest resources continue to grow. In 2007 the forest industries purchased nearly 53 million cubic metres of wood from private forest owners. Private forests’ harvesting possibilities still go unused to a large extent every year. The annual increment of Finland’s forests is 100 million cubic metres a year.

Raw material costs are leading to production cuts

Increasing raw material costs is not possible. Products must be produced at a cost level that allows them to be sold on world markets. The cost of wood has already reached a record level and is higher in Finland than in most competing countries.

The forest industry companies have announced in their first quarter reports some cuts in production due to high raw material costs.

Declining wood imports in the latter part of the year

"The forest industries import wood in response to an acute shortage of wood, because domestic supply is not sufficient. The availability of imported wood will decline in the latter part of the year, however, as the Russian parties will also start to adopt their operations to the declining wood exports.

"We must do everything we can and use every channel to seek a solution to the wood import issue that will ensure industry’s operations and jobs on both sides of the border."

New collective agreement in the paper industry

"A spot of light in the challenging operating environment is the new collective agreement in the paper industry, which allows the introduction of new procedures on a broad scale at all mills," says Dr Brunila.

"In the forest industries’ challenging situation we need to join forces to build competitiveness. The Paper Workers’ Union and the forest industries are both concerned about the future of the branch in Finland."

Restructuring continues

The restructuring of the forest industries and concentration on the most profitable units continues. The most efficient units can best respond to the constantly rising cost level. In spite of structural arrangements production last year was about the same as in 2000, which was a record year.