Finland: Difficult market conditions

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The forest industry's production environment was difficult in the first quarter and demand for several product categories was sluggish in the main market areas.

"Rapid action is needed to improve the cost-competitiveness of the forest industry in Finland; Finnish production units need to retain their vitality in an intensely competitive international market. Finland is an export-dependent nation, whose trade and current account balances have turned negative. New investments are needed to alter the situation, but they cannot be realised unless domestic production factors such as raw material, energy, logistics and labour costs become competitive with our key rival countries,” says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.

Finland produced 2.6 million tonnes of paper and paperboard in January-March 2012, down 12% from the previous year. Consumption of graphic paper grades remained on a low level in Europe, the main market area, and this had an impact on Finnish production volumes. On the other hand, production of fine paper picked up pace towards the end of the quarter. The prices fetched by paper and paperboard products remained stable when compared to the corresponding period of 2011.

Finland produced 1.7 million tonnes of pulp in January-March 2012, about the same amount as in the corresponding period of 2011. First-quarter pulp exports grew to 720,000 tonnes, up 28% from 2011.

January-March sawn timber production came to 2.3 million cubic meters, down 2% from 2011. Plywood production was down 7% from the previous year and totaled 250,000 cubic meters. Sawn timber exports increased to a million cubic meters in January-March, up 26% from the corresponding period of 2011. The first quarter of last year was affected by the crisis in North Africa, which halted shipments into the region.

Timber sales activity was brisk in the first quarter. The forest industry purchased 6.2 million cubic meters of wood in January-March, more than double the amount procured in the first quarter of 2011. The sawlog purchase volume rose to 2.8 million cubic meters, while pulpwood procurements came to 3.2 million cubic meters. Damage from storms around the turn of the year spurred timber sales especially in January. The high price of timber also boosted sales activity.
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