Growth in the production of softwood sawn timber, pulp and paperboard accelerated substantially in the third quarter — reasonable energy costs play a key role in competitiveness

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The rate of growth in the production of softwood sawn timber, pulp and paperboard accelerated in July–September compared to the first half of the year. The first six months of the year were also good for pulp and paperboard, largely due to new investments. Paper production, however, continued to decline. The profitability of sawn timber production was reduced by lower export prices and higher raw material costs. The government must ensure that energy and logistics costs are competitive in Finland and that forest policy is used purposefully to increase the supply of wood in response to the strong growth in demand.

The production of softwood sawn timber grew by 9.2% in the third quarter and amounted to 2.6 million cubic metres. Pulp production also increased substantially and was up 11.1% compared to the corresponding period last year. Forest industry corporations produced a total of 1.9 million tonnes of pulp in July–September.

Paperboard production grew by as much as 17.5% in the third quarter, to 840,000 tonnes, boosted particularly by new investments in the forest industry. At the same time, paper production declined by 5% and amounted to 1.7 million tonnes.
Paper production has fallen by 6.1% since the start of the year. Forest industry corporations’ production was 5.1 million tonnes in January–September, but production growth continued in other product categories.

Since the start of the year, forest industry corporations produced 6.5% more softwood sawn timber than in the corresponding period in 2015, for a total production volume of 8.4 million cubic metres. Pulp production increased at almost the same rate, with a year-on-year increase of 6.4% in January–September and a total production volume of 5.6 million tonnes. Paperboard production grew by 10% to 2.5 million tonnes during the first three quarters of the year.

Reasonable energy costs prevent carbon leakage

“The Government Programme states that industrial costs will not be increased. This is an important policy that must be maintained. Reasonable energy costs, as well as reasonable costs related to raw material use and logistics, are essential for the Finnish forest industry,” says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.

Fair treatment compared to the countries that compete with the Finnish forest industry helps prevent carbon leakage, which refers to the relocation of production operations. It also makes it possible to maintain the targets set for renewable energy. The forest industry produces two thirds of Finland’s renewable energy.

In September, the government submitted a proposal to the parliament on implementing compensation for the costs of emissions trading at a rate of 50% of the maximum allowed by the EU, which would reduce the competitive disadvantage of Finnish industry. Germany, for example, has implemented compensation for the costs of emissions trading at the full rate allowed by the EU. It is important to ensure that the model drafted by the government will not be changed.

“Consistent decisions and policies are essential from the perspective of businesses. The changes proposed in the public discussion on the issue would be contrary to this principle,” Jaatinen explains.

For further information, please contact: Director General Timo Jaatinen, Finnish Forest Industries Federation, tel. +3589 132 6600