Finnish forest industry: sawn timber production down, exports up

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“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. 

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.
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