The forest industry in January-September 2013: Forest industry production volumes and exports increased slightly from the year ago

In January-September, forest industry production volumes increased except in the graphic paper segment. “Despite the growth in production volumes, the Finnish forest industry’s competitiveness continues to suffer due to, for example, its high cost structure. The situation in the printing and writing paper segment continues to be especially difficult due to overcapacity across the European paper sector,” says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.

In January-August, forest industry exports increased by almost 2 per cent compared to the year ago period. The growth in exports is mostly due to increased exports of pulp, paperboard and wood products.

The paper industry’s situation continued to be difficult, pulp and paperboard production increased

Paper industry production fell in January-September 2013 especially due to a reduction in the consumption of graphic papers caused by changes in structural demand and the economic slowdown.

A total of 4.8 million tonnes of graphic printing and writing paper were produced in the first nine months of the year, which represents a drop of 4.3 per cent compared to the corresponding period in 2012.Graphic paper grades account for approximately 60 per cent of Finland’s paper production and consumption of these paper grades in Europe in January-September 2013 fell almost 6 per cent compared to the year ago period. 

Paperboard production in January-September amounted to 2.2 million tonnes, which is about 8 per cent more than in the corresponding period in 2012. Investments made into paperboard production capacity in Finland allowed for this increase in production.

Pulp production in Finland in the first nine months of the year totalled 5.3 million tonnes, which was 3.6 per cent more than in the period year ago.

Stabilisation in the sawmill and plywood industry

Wood product exports to Europe continued to decline. However, exports to regions outside Europe, especially Asia, were strong in the first part of the year, which led to a 10 per cent increase in wood product exports compared to the year ago period.

In January-September, wood products production increased 4 per cent compared to the corresponding period in 2012 and totalled 7.4 million cubic metres. Plywood production grew 5 per cent to 800,000 cubic metres.

Wood trade lively, high raw material costs weaken companies’ competitiveness

The wood trade was livelier in the first nine months of 2013 than in the corresponding period in 2012. The forest industry bought 22.9 million cubic metres of wood in January-September, which is an increase of approximately 11 per cent compared to the year ago period. Log procurement amounted to 10.3 million cubic metres and pulpwood to 11.8 million cubic metres.

Stumpage prices increased from the year ago. Compared to the market prices of forest industry end products, raw material prices are high, which increases the forest industry’s cost burden and weakens companies’ competitiveness on the international market.

The forest industry’s cost burden must be reduced

“The forest industry’s cost structure in Finland is still at an unsustainable level. The centralised wage agreement approved in October does not sufficiently improve the forest industry’s competitiveness. For several years, production and labour costs in Finland have increased faster than in competing countries. There is overcapacity in paper products and demand for, for example, printing paper, the forest industry’s most notable export product, has declined at a dramatic rate due to the digitisation of communications. Furthermore, the forest industry’s main markets in Europe continue to suffer the effects of the economic slowdown,” says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.

“The export-driven forest industry faces new additional costs totalling hundreds of millions of euro as a result of government decisions regarding the implementation of the sulphur directive and the real-estate tax on power plants, i.e. the windfall tax. Growing costs hamper opportunities to engage in profitable forest industry business in Finland, as in a tight market situation additional costs cannot be compensated for by raising product prices. The adoption of the windfall tax should be abandoned and the costs of the sulphur directive should be compensated with fast-acting measures. In connection with the centralised wage agreement, sectorial development measures were also agreed upon. These development measures must find solutions for how the implementation of local agreements can be increased and how operations can be made more flexible,” Jaatinen says.

For further information please contact:
Timo Jaatinen, Director General, Finnish Forest Industries Federation, tel. +358 9 132 6600

Internet: www.forestindustries.fi

Finland is one of the world's largest producer of pulp, paper and paperboard in addition to being one of Europe's largest producers of sawn timber. The forest industry directly and indirectly employs approximately 160,000 Finns. The industry's multiplier effects extend broadly into surrounding society. Finland has a unique opportunity to pioneer the bioeconomy thanks to the abundant forest resources, sustainable forestry practices and the first-rate expertise and competence of the forest cluster as a whole.

Contact in Communications:
Anne Pirilä, Communications Director, tel. +358 9 132 6645 or mobile +358 50 550 9480