Finland: The forest industry in 2013. The situation on the main markets in Europe continues to be challenging - additional burdens in Finland harm competitiveness.

21 March 2014

Finland: The forest industry in 2013. The situation on the main markets in Europe continues to be challenging - additional burdens in Finland harm competitiveness.

The drawn out economic downturn took a turn for the better at the end of 2013 but growth remained slow. The forest industry’s situation in its main export markets in Europe continued to be challenging. The Finnish forest industry’s competitiveness has suffered due to, for example, its high cost structure, as production and labour costs have increased faster than in competitor countries. Additional burdens placed on industry in Finland further weaken the export-driven forest industry’s competitiveness in the coming years. The windfall tax will be adopted in 2014. The sulphur directive, which targets forest industry maritime transports, comes into effect in 2015. The wage solutions agreed upon last autumn do not improve the sector’s competitiveness in the short-term and collective labour agreements did not include the reforms desperately required by the forest industry.
“With decisions that support the export industry, we could contribute to the Finnish forest industry’s competitiveness and help ensure it provides jobs in future as well. In this spring’s budget framework session, the government must not propose any new taxes or increased costs for industry,” says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.
“For example, the energy tax refund scheme must be developed so that industry’s energy taxes are no higher than what the EU demands. Sufficient funding must be secured for logistics infrastructure, particularly the maintenance of basic transport infrastructure. We now need swift decisions that speed up economic growth so that Finland can return to growth,” Jaatinen says.
Decline in paper demand continued, paperboard and pulp production increased The Finnish paper industry’s situation continued to be challenging in 2013 due to the weak economic situation in Europe and declining demand for graphic papers. In 2013, a total of 10.6 million tonnes of paper and paperboard were produced in Finland. This is one per cent less than in 2012.
In 2013, production of graphic paper, printing and writing paper as well as newsprint, totalled 6.3 million tonnes, which is a reduction of almost five per cent from 2012 levels. Production of paperboard grades designed for packaging purposes amounted to 2.9 million tonnes, which is almost seven per cent more than in 2012. Pulp production in Finland totalled 7.1 million tonnes, which is almost four cent more than in the previous year. Pulp export deliveries were about 8 per cent higher than in 2012.
European construction output weak, wood products exports to countries outside Europe increased The wood products industry’s production volume exceeded the 10 million cubic metre mark, totalling 10.1 million cubic metres, which represents a seven per cent increase from the previous year. Exports to countries outside Europe increased, especially to Asia, the Middle East and North Africa.
European economic uncertainty affected construction output as well. Demand for wood products fell in Finland and housing construction decreased by about a fifth compared to 2012.
High round-wood costs weakened industry’s competitiveness on the international market.
Wood raw material-based bio-refineries under construction and on the drawing board in Finland Construction of a bio-refinery that will use crude tall oil as a raw material continued in Lappeenranta. The refinery is due to be completed in 2014.
Construction of a bio-refinery in Kotka began in 2013. The bio-refinery will produce lignin, which can be used to replace fossil fuels. The bio-refinery is to start production in the first half of 2015.
A bio-refinery that will produce wood-based biogas is being planned in Joutseno. If realised, the bio-refinery will start up in 2017.

For further information please contact Mr Timo Jaatinen, General Director of Finnish Forest Federation:

FINNISH FOREST Industries Federation
Snellmaninkatu 13
FI-00171 HELSINKI / Finland
Tel +358 (0) 9 132 6600