Finnish forest industry in January-September 2012: operating environment challenging.
trade associations

05 November 2012

Finnish forest industry in January-September 2012: operating environment challenging.

The production volumes of the forest-based sector decreased or remained unchanged in January-September. “The competitive ability of the Finnish forest industry is being tested to the extremes by market conditions and the constant rise in costs. Finland must retain a stronger competitive position than our rival countries, as this is the only way to ensure that forest industry operations remain viable in our country,” says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.
Finland produced 5.1 million tonnes of pulp in January-September, roughly the same amount as in the corresponding period of 2011. Pulp exports were up 16% to 1.9 million tonnes from the previous year. January-September paper and paperboard production came to 8.0 million tonnes, down about 8% from the corresponding period of 2011. After a weak start to the year, paperboard production started to rise and third-quarter production was up 4% from the corresponding period of 2011.
January-September paper exports were down 9% and paperboard exports 2% in volume compared to the corresponding period of the previous year. The export prices of the biggest paper and paperboard product categories increased compared to the beginning of the year.
January-September sawn timber production came to 7.0 million cubic metres, down about 3% from the corresponding period of 2011. Plywood production was down 4% to 760,000 cubic metres. January-August sawn timber exports totalled 4.2 million cubic metres, which is almost 6% more than recorded in the corresponding period of 2011. Export prices were down 2% from the previous year.

Price of timber critical in light of prevailing market conditions
The forest industry purchased 20.6 million cubic metres of timber in January-September 2012, up 15% from the corresponding period of 2011. Timber sales volumes were boosted by storms in the early part of the year, but the pace levelled in the third quarter. The cost of timber is high relative to the market situation for forest-based products, and this is eroding especially the sawmill industry's ability to compete on international markets.

Rising costs a threat to the industry
“The forest industry relies mostly on domestic production inputs and so decisions made in Finland have an accordingly significant impact on the industry's operating prerequisites. A rise in, for example, labour, logistics or energy costs will directly affect the competitiveness of the forest industry,” says FFIF Director General Timo Jaatinen.
“The biggest threat to forest-based activities in Finland is posed by the EU's Sulphur Directive, which is set to enter into force in 2015 and will burden the industry with additional costs amounting to at least €200 million annually. Adding a €30-million subsidy for sulphur scrubbers into the Government budget is in no way sufficient compensation for such a rise in the cost base. If next year's budget negotiations don't come up with a way to fully offset the extra costs, the future competitiveness of the Finnish forest industry will be under severe threat,” Jaatinen points out.
For further information contact Mr. Timo Jaatinen, Director General:

Finnish Forest Industries Federation
Salomonkatu 17 A
FL-00100 HELSINKI (Finland)
Tel. +358 9 132 6600
Fax +358 9 6850 8820
E-mail: timo.jaatinen@