Finnish Forest Industry In 2013:

Finnish Forest Industry In 2013:

Economic downturn weakens demand in main market areas


“Europe’s weak economic situation is eroding the future prospects of the Finnish forest industry. Finland should now focus on the rapid implementation of measures that ease the industry’s cost burden,” says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.

The membership of the Finnish Forest Industries Federation covers the pulp, paper and paperboard manufacturers of Finland as well as about 80% of all wood products companies, such as sawmills and plywood mills as well as makers of joinery products and other wood-based articles. While commenting on the Finnish Forest Industry’s January to March report in 2013, Federation’s Director General Timo Jaatinen points out; “It is essential to maintain the competitiveness of the Finnish forest industry at a higher level than that of our rival nations.”

According to the report, structural change hits graphic papers hard, situation better for packaging materials. Paper and paperboard production came to 2.7 million tonnes in the first quarter of 2013, up 2.8% from the corresponding period of 2012. Some 750,000 tonnes of paperboard were produced in January-March, up almost 17% from the first quarter of 2012. This increase was due to an increase in Finnish paperboard production capacity as well as the low level of output recorded in the corresponding quarter of the previous year. Graphic paper consumption fell 5.5% in Europe during the early part of the year. Finnish graphic paper production came to 1.6 million tonnes, down 3.4% from January-March 2012. Export prices have been falling since last autumn. The situation remains extremely difficult in the market for printing and writing papers as the structural change continues. January-March pulp production came to 1.8 million tonnes, up 3.7% from the corresponding period of 2012. More pulp was processed domestically than in the previous year, and the volume of export deliveries fell 20.5% compared to 2012. The market price of pulp has been increasing since last autumn.

The recession is weakening demand for sawn timber in Europe. Furthermore, harsh winter weather in Central Europe held off the start of the construction season and this has caused sawn timber deliveries to be postponed beyond their usual dates. Some 2.5 million cubic metres of sawn timber were produced in the first quarter of 2013, up about 10% from the previous year.

A recent report on the construction industry of Finland estimates that Finnish building activity will continue to decline by 3% in the current year. Growth is not expected before 2014. Finland cannot retain a competitive forest industry unless the cost of wood raw material remains reasonable relative to the prices fetched by end products.