The Finnish Prime Minister’s seminar on globalisation - Implementing new operating methods and renewal of the sector challenges the Finnish forest industry

Strengthening the competitiveness of Finland’s forest industry is largely dependent on the sector’s ability to renew its operating models, President and CEO Anne Brunila of the Finnish Forest Industries Federation summed up today at Prime Minister Vanhanen’s seminar on globalisation.

The renewals agreed to in the collective labour agreement for the paper industry in 2005 must be taken into use without delay. At the same time it is necessary to reduce the high absence levels in the industry, improve occupational safety and wellbeing at work by, for example, strengthening multi-faceted competence. These major challenges call for cooperation between employers and employees. In addition, the industry needs long-term measures aimed at improving profitability, strengthening research and development as well as taking advantage of the sector’s renewal opportunities. “The industry’s trade unions also need to look at the future and realise that a successful and competitive forest industry is in their members’ best interests. Modernisations need to get well under way and the contributions of all parties are required for this,” Anne Brunila pointed out. The markets and competitive advantages of the forest industry, which is based on the use of a renewable raw material, are undergoing a major transition globally. Demand is rising rapidly in Asia and in other emerging markets, while the traditional export markets in Europe and North America are suffering from excess capacity. Together with changes in demand, inexpensive sources of raw material in Latin America are steering trade and investment flows, technology and expertise into new areas. “The competitiveness of the Finnish forest cluster will determine whether Finland will be able to retain its lead in forest-related expertise or if new, growing markets will overtake us,” said Brunila. The Finnish forest industry’s productivity lead, which has been a significant competitive advantage, is being caught up. In Finland, almost all expense items – labour, energy, raw materials and, due to our distant location, transport costs – are higher than in competing countries. Labour costs have been increasing more rapidly than in competitor countries and actual working hours in the paper industry are the shortest in Europe. The rise in unit labour costs has been far greater than in other producer countries. Production efficiency and labour productivity vary significantly between different production facilities and the number of low productivity units in the danger zone has increased. Rigidities and productivity obstacles in the paper industry should be dismantled to provide it with better operating conditions also in Finland. The need for these changes is urgent: tangible results must be realised in the near future. The Finnish paper industry could improve its international competitive position significantly if modernising of operating models, and for instance, reorganising labour and efficient procuring services was made possible in the labour agreement.