Monday, 10 February 2014 10:36

The forest industry in 2013: The situation on the main markets in Europe continues to be challenging - additional burdens in Finland harm competitiveness

2014-02-10 103621

The drawn out economic downturn took a turn for the better at the end of 2013 but growth remained slow. The forest industry’s situation in its main export markets in Europe continued to be challenging.

The Finnish forest industry’s competitiveness has suffered due to, for example, its high cost structure, as production and labour costs have increased faster than in competitor countries. Additional burdens placed on industry in Finland further weaken the export-driven forest industry’s competitiveness in the coming years.

The windfall tax will be adopted in 2014. The sulphur directive, which targets forest industry maritime transports, comes into effect in 2015. The wage solutions agreed upon last autumn do not improve the sector’s competitiveness in the short-term and collective labour agreements did not include the reforms desperately required by the forest industry.

“With decisions that support the export industry, we could contribute to the Finnish forest industry’s competitiveness and help ensure it provides jobs in future as well. In this spring’s budget framework session, the government must not propose any new taxes or increased costs for industry,” says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.

“For example, the energy tax refund scheme must be developed so that industry’s energy taxes are no higher than what the EU demands. Sufficient funding must be secured for logistics infrastructure, particularly the maintenance of basic transport infrastructure. We now need swift decisions that speed up economic growth so that Finland can return to growth,” Jaatinen says.

Decline in paper demand continued, paperboard and pulp production increased
The Finnish paper industry’s situation continued to be challenging in 2013 due to the weak economic situation in Europe and declining demand for graphic papers. In 2013, a total of 10.6 million tonnes of paper and paperboard were produced in Finland. This is one per cent less than in 2012.

In 2013, production of graphic paper, printing and writing paper as well as newsprint, totalled 6.3 million tonnes, which is a reduction of almost five per cent from 2012 levels. Production of paperboard grades designed for packaging purposes amounted to 2.9 million tonnes, which is almost seven per cent more than in 2012. Pulp production in Finland totalled 7.1 million tonnes, which is almost four cent more than in the previous year. Pulp export deliveries were about 8 per cent higher than in 2012.

European construction output weak, wood products exports to countries outside Europe increased
The wood products industry’s production volume exceeded the 10 million cubic metre mark, totalling 10.1 million cubic metres, which represents a seven per cent increase from the previous year. Exports to countries outside Europe increased, especially to Asia, the Middle East and North Africa.

European economic uncertainty affected construction output as well. Demand for wood products fell in Finland and housing construction decreased by about a fifth compared to 2012.
High roundwood costs weakened industry’s competitiveness on the international market.

Wood raw material-based biorefineries under construction and on the drawing board in Finland
Construction of a biorefinery that will use crude tall oil as a raw material continued in Lappeenranta. The refinery is due to be completed in 2014.
Construction of a biorefinery in Kotka began in 2013. The biorefinery will produce lignin, which can be used to replace fossil fuels. The biorefinery is to start production in the first half of 2015.
A biorefinery that will produce wood-based biogas is being planned in Joutseno. If realised, the biorefinery will start up in 2017.

Additional Info

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 

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