Finland's Forest Products Industry Production Up 12% in 2010

Pulp and paper industry production in Finland was up about 11% in 2010. Photo courtesy UPM.

Feb. 11, 2011 - The forest industry of Finland recorded annual production increase of some 12% in 2010, but production volume did not yet rise to the level achieved in 2008, according to Finnish Forest Industries Federation (FFIF).

Pulp and paper industry production was up about 11% and the wood products industry’s production increased by some 14%. The continuation of this positive development after industry companies have finished implementing structural changes will depend on whether or not domestic costs are kept in check.

“Exports account for one half of Finland’s prosperity, so changes that affect the operating environment of industry are of huge significance," said Timo Jaatinen, Director General of the FFIF.

"Rising domestic costs have a direct impact on the competitiveness of the forest industry’s export products. Energy and fuel taxes will top EUR100 million this year alone, and this is eroding our ability to compete in the international markets,” Jaatinen said.

“The tax credit granted to the energy-intensive forest industry must be boosted to an extent that places Finland on an equal standing with its competitor countries. The forest industry of Finland is far away from the markets of Central Europe, which means that the rising cost of sea transports increases our level of expenses further. Last year’s collective bargaining agreements were laudably moderate within the forest industry. Inflationary pressures mean that Finland cannot afford to erode national competitiveness on this front either,” Jaatinen added.

The FFIF estimates that the value of forest industry production increased to over EUR19 billion in 2010, up almost 25% from 2009. The pulp and paper industry accounted for a majority, some EUR14 billion, of this and about EUR 5.5 billion came from the wood products industry.

Production volumes increased in all sectors of the forest industry. Finland produced 6.7 million tonnes of pulp last year, 22% more than in 2009. Paper and paperboard production rose to 11.8 million tonnes, up more than 11% from the previous year, while sawn timber production increased by 17% from 2009 to 9.4 million cubic metres.

Competitiveness Demands Cost Discipline

The forest industry of Finland has had to go through a trying structural change to maintain its competitiveness. The implemented measures have already yielded results.

A recent investment survey conducted by the Confederation of Finnish Industries EK reveals that the forest industry’s domestic investments came to almost EUR 650 million in 2010, which was nearly 25% more than in the previous year.

Exports likewise fared much better than in the previous year: advance data indicates that the forest industry’s export volumes increased about 15% and the value of exports almost 25% to around EUR 10.5 billion in 2010.

SOURCE: Finnish Forest Industries Federation