Roundwood sales at record level in Finland in 2007

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“Finland’s forest industry will, however, need even more wood in the future. If we want to keep employment and production at present levels, privately owned forests must supply at least 60 million cubic metres of wood each year. These levels should be achieved during 2008,” says Anne Brunila, President and CEO of the Finnish Forest Industries Federation.

“In terms of sustainable use of Finland’s forest resources, this is a reasonable target but increasing felling to such levels will require a more active contribution from private forest owners. The Finnish government must also encourage forest owners to bring more wood on the market. After all, the export duties imposed by Russia are threatening to stop wood imports from that country in early 2009 unless a solution is found before that. At present, about 10 million cubic metres of wood in privately owned forests remain unused each year,” explains Anne Brunila.

Growth strongest in purchases of pine logs

Purchases of pine logs increased by 41% in 2007. The growth in spruce pulpwood purchases was 14%, while in other wood assortments the increase was 21 – 24%.

Delivery sales amounted to 5.9 million cubic metres and accounted for 14% of all roundwood purchases in 2007 (15% in 2006). In delivery sales, the forest owner is responsible for bringing the wood to a location along the transport route.

Stumpage prices increased by 31% on average during 2007. The increase on the previous year was highest in softwood logs (33-34%), followed by pine and birch pulpwood (21-23%), spruce pulpwood (11%) and birch logs (10%).

Forest-industry raw-material costs higher in Finland than in other countries

The average stumpage price per cubic metre for pine logs in 2007 was EUR 66, for spruce logs EUR 67 and for birch logs EUR 48. The average price for pine and birch pulpwood was EUR 15-16, and for spruce pulpwood EUR 24.

Finland’s forest industry is burdened with substantially higher factory costs for softwood logs than its competitors in other countries. For example, the difference between Finland and Sweden is about EUR 30/m3.

The price of spruce pulpwood used by mechanical pulp mills is almost 20% lower in Great Britain and Sweden than in Finland. In the United States, the world’s biggest pulp producer, mills pay 23-46% less for pulpwood than their Finnish competitors, while in South America hardwood pulpwood can cost 35-60% less than in Finland.

The forest industry operates on a global market where the price of the end product is determined by the competitive environment. As Finnish-based companies cannot pass higher raw material costs on to prices, Finland is in the danger of becoming a less attractive location for sawmills and other forest-industry operations.

For the roundwood sales statistics compiled by the Finnish Forest Industries Federation, click

Roundwood sales in privately owned forests

Each year, about 150,000 roundwood sales contracts are concluded in Finland. Most of the contracts involve standing sales in which the buyer purchases a right to fell a certain amount of wood or acquires the logging rights to a specific area. The buyer is responsible for harvesting the wood in accordance with the terms and conditions agreed between the parties and pays the seller a stumpage price based on the measured amount of wood.

The income from roundwood sales is capital income on which the seller can claim tax deductions (for example the sales-related expenses and forest-management costs can be deducted each year). At the moment the tax rate for capital income in Finland is 28%, though after deductions, the actual rate is around 19% for wood sales.

Finland number one in forest protection

Some 8.2 per cent of forest land in Finland is strictly protected, which is more than in any other EU country. Elsewhere in Europe, less than three per cent of all forests are under protection.

The Finnish forest industry supports the METSO programme in its forest operations. Responsible wood-procurement practices help to ensure biodiversity of Finland’s forests, while companies provide their employees with training in matters concerning the forest environment. The environmental and quality management systems and chain-of-custody arrangements adopted by the companies also help to ensure high environmental standards. The forest industry also provides funding for forest and biodiversity research.

For more information, please contact

Anu Islander, Senior Advisor, Forestry, Sustainable Development and Resources, Finnish Forest Industries Federation, tel. +358 9 132 6678 or +358 40 729 3678

Anders Portin, Senior Vice President, Sustainable Development and Resources, Finnish Forest Industries Federation, tel. +358 9 132 6610 or +358 40 586 6179