Work to clear the trees damaged in the January storm is being undertaken at an intensive rate in Sweden to save as much timber as possible before it is damaged by insects. The storm on January 8 caused the worst damage to the forests ever known in the country. The Swedish Forest Administration estimates that 75 million m3 were wind-thrown or damaged, which is equal to almost an entire year’s felling for the whole of Sweden and is 20-30 times as much as is damaged by storms throughout the country in a normal year. It is estimated that the total cost will amount to SKr18.4bn.
Most of the damage was to forests in the south of Sweden and resources have been diverted from the north to cope with the extra work. Södra alone has 1,500 workers from 11 European countries clearing the damaged trees. The company has a total of 445 felling teams (compared with the normal 212) working in the region. A large number of special terminals have been set up to store the recovered timber and many extra logging lorries are being used.
Approximately 80% of the damaged trees are Norway spruce, 15% are Scots pine and the rest are deciduous trees. The Swedish government has commissioned the National Board of Forestry in conjunction with other relevant state authorities to evaluate the consequences of the storm. The assignment includes considering whether current day forest management could have contributed to the extent of storm damage and how the forests should be maintained in the future to reduce the damage caused by storms. For example, it has been suggested that although spruce will continue to play the most important role, in the future there will have to be more of a mix of species in the forest.
Replanting plans
In addition to clearance work, plans have to be made to replant the areas that have been affected. The Swedish Forest Administration has estimated the area that needs to be replanted is approximately 140,000ha. “Up to 100 million new plants will be required in addition to the 300 million normally planted in Sweden,” said Urban Eriksson, president of Svenska Skogsplantor (Swedish Forest Plants), part of the Sveaskog Group. Since plants need a certain growing time to reach a suitable size and quality, the replanting work in the areas affected by the storm will need to be spread over several years. In order to cope with the demand for new plants the National Board of Forestry has also applied to the European Commission for permission to import plants from Belarus.
Poor results
Another problem for the Swedish forest industry has been that, although there was a strong demand for Scandinavian wood products in 2004, as we reported in the previous Swedish market report, company reports issued since then have shown that lower prices and less advantageous foreign exchange rates have led to poorer results. SCA‘s result dropped by SKr2bn to SKr4.8bn for 2004, while Södra earned SKr911m as against SKr1.5bn for the previous year and Billerud showed profits before tax of SKr712m compared with SKr1.04bn for 2003. Mellanskog managed to achieve a result for 2004 of SKr18.6m that was roughly comparable with 2003, but Norskog and Setra showed losses of SKr2m and SKr108m respectively.
Energy and the uncertainty of government policy relating to it is a continuing concern for the Swedish forest industry. It remains government policy to shut down nuclear power and invest instead in other forms of energy such as waterpower, windpower and biofuel. The scale of the problem is that despite a nuclear reactor at Barsebäck having closed, nuclear power still accounts for more than half of Sweden’s energy production.
Recent figures show that electricity costs for basic industry have risen by SKr2bn over the past two years and forest industry leaders such as Holmen president Magnus Hall, Bilerud president Bert Östlund, and Stora Enso head of operations in Sweden Yngve Stade have all recently expressed concern about the lack of a reliable long-term energy supply. As a result, Stora Enso and Holmen are involved in discussions with other major industrial companies to form their own energy company.
