Demand for timber in Norway is relatively good at present, with a 50,000m³ increase registered to the end of September compared with the same time last year. The trend varies from one forest owners’ association to another, with some associations recording strong growth while others have had a reduction in volume by almost 10% this year.
Forest owners are nervous about competition from imports despite the fact that import volumes have been declining, both for pulpwood and sawn timber, with a year-on-year 22% fall in import volumes to the end of August.
However, Norway’s felling levels for this year are expected to be about the same as last year’s level of 7.6 million m³.
The forecast for the Norwegian economy as a whole is one of moderate growth. Despite expectations that the labour market in Norway will continue to be restricted, there has been a decrease in the consumer price index, caused largely by the halving of VAT. Furthermore, activity in the building and civil engineering fields has led to increased growth.
Looking at the wider picture, the Norwegian Forest Owners’ Federation points out that, because of high production of Swedish timber, market development and price levels for timber in European markets are uncertain. On the other hand, Finnish and Baltic producers have reduced their production.
The pulp and paper market has had a turbulent year with a substantial fall in the price of pulp, together with a reduction in demand. In late summer there were signs of a change towards a slight increase in prices. The biggest producers have reduced production, thereby reducing the danger of continued low prices. For example, Norske Skog plans to curtail its production by around 90,000 tonnes for standard newsprint during the fourth quarter of 2001.
Demand for pulp and paper products is greatly dependent on developments in the international economy. The recent events in the US have made the future uncertain, despite positive signals in relation to price and stock reductions.
A positive development is that Statskog Nordland recently exported a substantial quantity of birch bark to the Faeroe Islands. The bark will be used for roofing, in shoes and for domestic products. Statskog points out that a roof of birch bark topped with a layer of turf can last longer than if plastic or steel were used, while food stored in birch bark lasts considerably longer than that stored in plastic.
Another expanding specialist market for Norwegian timber is the use of heartwood from pines that are 150-250 years old. This is a field in which Material-banken specialises. Until now Materialbanken has been supplying the Norwegian market and Iceland but it recently received British visitors who were considering the use of this more mature timber for restoration purposes instead of younger heartwood that had previously been supplied by Sweden, Finland and the Baltic states. The UK visitors were Michael Knights, a building conservator in Norfolk, and Alan Newbury, director of Ridgeon Forest Products.
‘Our strategy is to let the trees stand longer before felling them,’ says Erling Birger Semmingsen, head of Material-banken and a forestry leader for Glommen Forest Owners’ Association which owns 50% of Materialbanken. He points out that it is also advantageous to use this timber in new buildings since it is more weather resistant than younger wood. He anticipates a doubling in the com-pany’s sales of this material.
In the field of acquisitions, Norske Skog has bought shares to the value of Real 20m in Pisa (Papel de Imprensa SA) in Brazil. Following the purchase, Norske Skog now owns 99.7% of the votes and 98.8% of the company’s shares. Furthermore, Norske Skog Canada recently completed its acquisition of the company Pacifica Papers Inc (Pacifica) with Norske Skog’s shareholding in Norske Skog Canada now being reduced from 50.8% to 36.1% as a result of the share exchange option offered to Pacifica’s shareholders.
Following its acquisition of Moelven Industrier ASA, Finnforest has entered into a shareholders agreement with Norwegian forest owners’ associations and one Swedish forest owners’ association, all holding shares in Moelven. Finnforest stated it would prefer a continued ownership in Moelven by the forest owners’ associations.
The main objective of the shareholders’ agreement, points out Finnforest, is to establish a stable basis for co- operation in the best interest of Moelven Industrier and to ensure profitable growth and development for Moelven as a strong Norwegian internationally valued company.
