Forest industry’s consumption of domestic wood to grow in the coming years

Press releases |

VATT drafted three development scenarios for wood consumption, and it anticipates that the utilisation of wood will grow even if the most pessimistic development scenario is realised.

VATT predicts that Finnish forest industry production will grow in the next few years after bottoming out during the economic downturn of 2009. Pulp, cardboard and paperboard production volumes are expected to re-attain pre-recession levels the fastest.

The structural change of the forest industry and the international financial crisis did not reduce wood consumption to as great a degree as was anticipated on the basis of capacity shutdowns. Production efficiency has been enhanced and strengthened at the most cost-competitive mills through rationalisation and modernisation investments.

The forest industry’s wood consumption opportunities are expected to grow steadily, especially towards the end of the current decade, when the industry will have fully recovered both from its structural change and the global economic downturn.

Wood utilisation growth to equal one pulp mill’s consumption

“The VATT report indicates that earlier forecasts of a decline in the forest industry’s wood consumption have been far too pessimistic. In the ongoing decade, Finnish wood utilisation growth will equal the amount that would be consumed by one new pulp mill,” says Antro Säilä, Director of the Finnish Forest Industries Federation’s Business Environment and Innovation segment.

Wood consumption growth might not be realised if the industry’s cost-competitiveness is ignored in Finland. A failure to supply more wood to the market than is presently available poses one potential bottleneck.

Programme for Government should consider improving the availability of wood

It is important that the upcoming Programme for Government includes measures aimed at improving the market entry of wood. The decline in the average size of forest holdings should be reversed because it would improve the profitability and allure of forestry.

Alongside these measures, action needs to be taken to strengthen forestry-related entrepreneurship and to realise a more effectively functioning market for forestry services. Economic incentives should also be provided to steer forest owners towards active forestry practices in order to safeguard the steady availability of timber and the appropriate management of forest holdings.

Increasing the volume of processing will also strengthen renewable energy production

Demand for wood will increase from present levels in the next few years also because of the effort to increase the share of renewable energy. VATT predicts that forest-chip utilisation will increase from the present 6 million cubic metres to some 12.5 million cubic metres. As it makes little sense to burn processable wood, the supply of wood must be increased.

According to the VATT report, competition for wood can also threaten the raw materials supply of biorefineries. If active policy decisions are not taken, concern for the availability of sufficient wood quantities may lead to biorefineries being located in other countries, robbing Finland of future growth opportunities.

Timber harvesting opportunities left untapped under even the most optimistic forecasts

VATT has also examined the sustainability of wood utilisation on the part of each timber grade. There is enough sustainable utilisation potential for domestic wood to cover the needs of even the most optimistic wood-consumption growth scenario. Timber imports will only have to be relied on in the case of birch pulpwood because national forest resources will not be sufficient to cover the industry’s needs.

Further information:
Antro Säilä, Director (Business Environment and Innovation), Finnish Forest Industries Federation,
tel. +358 9 132 6633, +358 40 589 1891