Newsletter 21.3.2007

Wed, Mar 21, 2007 13:22 CET

Finland plays a significant role in the production of virgin fibre for the European market

Recovered paper is a good and valuable raw material for paper manufacturers and demand for it is increasing. Reasons for this include the price competitiveness and increasingly good quality of recycled fibre as well as the diversifying range of uses for recovered paper. Recycling help make efficient use of natural resources and supports sustainable development. Paper cannot be made from recycled fibre alone, however, and some virgin fibre is always required. Wood fibre can be recycled 4-6 times.

About half of the paper consumed in Europe was manufactured using recycled fibres. The largest amount of recycled fibre is used in packaging materials and newspaper paper grades.

More than 90% of the paper produced in Finland is exported. This means that it is mostly recovered in Central Europe, the most important market area for the Finnish forest industry. Importing recovered paper back to Finland would not make economic or ecological sense because of the high costs and emissions caused by transports over long distances.

The choice of raw material for paper – virgin fibre or recovered paper – is largely determined by the availability of these fibres in each country. In countries with large forest resources and few people, paper is mostly made from virgin fibre. In densely populated countries with ample supplies of recovered paper, paper manufacturing mostly relies on recycled fibre. This is why Finnish paper manufacturing is based on virgin fibre and Central European operations on recycled fibre. The production of Finnish-owned mills in Central Europe is also largely reliant on recovered fibre as it is more readily available in these populous countries.

Virgin fibre always needed with recycled fibre

According to estimates, if the European paper industry were to rely on recycled fibre alone, paper manufacturing would end in a few short months, as it is impossible to reuse recycled fibre exclusively to make paper – some strong virgin fibre is needed in the mix. Wood fibre can endure some four to six uses, after which its qualities, such as strength, begin to deteriorate.

In 2005, about 47 tonnes of paper and paperboard were recycled in Europe: over 60% of the production. About 70% of the paper and paperboard consumed in Finland is recovered. Globally, the average rate of recovery is around 50%. In Finland, the largest amount of recovered paper is collected by industry, which accounts for over half (52%) of all recovered paper. Offices account for 10% of recovered paper and the rest, 38%, is gathered by households.

All paper grades cannot be recycled, including cigarette paper, wallpaper, books and hygienic paper. These grades account for an estimated 19% of total paper consumption.

Wood is a renewable raw material

Finnish forests are a good source of raw material for paper. Forest resources are used in sustainable manner and sustainable forestry aims to protect the biodiversity of Finland’s woodlands. 95% of Finnish forests have been certified, in contrast to the global total, which is less than 10%.

The forest industry bases its activities on a renewable natural resource. The manufacturing operations of the Finnish paper industry place as small a burden on the environment as possible and the industry uses the best technological solutions available. The industry also makes prudent use of all of the raw materials it procures: The raw materials of paper include wood chips, which are a by-product of sawmilling, and trees with a small diameter that have been thinned to make more room for larger trees to grow.

Further information:

Fredrik Blomfelt, Senior Advisor, Environment, Finnish Forest Industries Federation
Tel. +358 (0)9 132 6640, e-mail: firstname.lastname @ forestindustries.fi

Picture. Use of recovered paper and paperboard as raw material in Finland

Forest protection affects the forest sector and regional economies

In Finland, the primary objectives of forest protection are ecological, but the effects of protection also extend to employment, timber markets and gross production. Decisions made in the last decades to protect forests in northern and eastern Finland above all affect regional and local economies.

Strictly protected forests account for 8.2 per cent of forest land. In other European countries, on average two to three per cent of forests are protected, at the most.

Forest protection is not spread evenly around the country, however. It is concentrated in northern Finland and particularly state-owned forests there. In the northern area named Forest Lapland, for example, 51 per cent of forests are already protected.

The pilot stage of the Forest Biodiversity Programme for Southern Finland showed that voluntary protection measures are effective and also enjoy broad support among forest owners. Measures taken to promote the natural management of commercial forests have been in the right direction to ensure biodiversity.

Finnish forest industry needs domestic wood

The availability of domestic wood directly affects the forest industries' operating possibilities in Finland. Lapland in the north and Kainuu in the east do not have enough private forests from which wood could make up for the loss of supply from state-owned forests. Less than 50 per cent of forests in northern Finland are privately owned. In southern Finland, on the other hand, 70-80 per cent of commercial forests are owned by private individuals, ordinary families.

Forests offer work and income

Many communities in Finland depend economically on forests. The forest sector's share of gross domestic product is around 20 per cent in some regions. In many areas, it is considerably higher. Forest owners, local sawmills and companies that harvest and transport wood form the backbone of prosperity. In addition to providing jobs, local sawmills also help to provide a solid basis for other services.

"In Finland private forest owners play a key role in the functioning of the wood supply, since over 60% of the wood raw material used by the forest industries comes from domestic family forests. Industry pays about 1.5 milliard euros on wood purchasing for forest owners per year. Thus forest owners receive income considerable from wood sales" says Anders Portin, Senior Vice President of the Finnish Forest Industries Federation’s Sustainable Development and Resources unit.

One sawmilling job leads to two jobs in other fields

The forest sector accounts for about 6 per cent of Finland's gross domestic product. This sector does not have such a large effect on the economy and employment in any other EU member state. It is increasingly important for Finland's economy that the forest sector and related raw material supply provide work and income for people in rural areas.

Around 86,000 people are employed in the forest industry in Finland. When including indirect jobs, the whole sector employs about 200 000 Finns. The Finnish Forest Research Institute estimates that each job in the forest industry leads to 1.1-1.6 jobs outside the sector. Sawmills create more indirect jobs than other mills. Each sawmilling job leads to about 2.2 jobs in other fields. Work is also provided in supporting services.

Further information:
Anders Portin, Senior Vice President, Sustainable Development and Resources, Finnish Forest Industries Federation, tel. +358 (0)9 132 6610, +358 (0)40 586 6179

Antti Otsamo, Director, Forest Issues, Sustainable Development and Resources, Finnish Forest Industries Federation, tel. +358 (0)9 132 6679, +358 (0)40 719 7734

Related story: Adjusting has required investments in a northern Finland company

Deputy Managing Director Hannu Virranniemi of Pölkky Oy in Kuusamo says that forest protection has made things difficult for his family company in many ways. "Growth has ceased and adjusting has required investments. Since the protection of forests has reduced the supply of large logs, production machinery has had to be changed to accommodate smaller logs. We have also had to invest in processing sawn wood. Production costs have constantly risen because logs have to be transported a longer distance." Virranniemi, who is in charge of Pölkky's wood procurement unit, says that the company has stopped growing because of the reduced supply of wood and rising costs. New jobs have not been created in the past 10 years.

According to Virranniemi, in the past ten years the supply of wood has been reduced in Kainuu, North Ostrobothnia and Lapland by hundreds of thousands of cubic metres a year, mainly in state-owned forests but also in privately owned forests as a result of the protection of forests. Logs suitable for sawing account for about 70 per cent of the drop.

Although the young forests of northern Finland grow rapidly, the volume of wood that can be felled from forests is less than earlier because of protecting forest lands. Thus, the average distance that logs have to be transported to Pölkky's plants has risen to nearly 140 kilometres. This is 40 kilometres more than the average distance for wood imported from across Finland's eastern border.

"Locally forestry and other industries get along well. In northern Finland, there is a special method - a best practise benchmark also internationally - to decide how state-owned forests are used. All interest groups are participating in the Natural Resource Planning process. Plans are done through a public discussion and regional working groups", says Virranniemi.

Pölkky Oy has operated since 1968 and is the largest private wood processor in northern Finland. The Pölkky Group has a turnover of 50 million euros and employs over 200 people.

Newsletter 21.3.2007

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