In spite of poor profitability, sawn timber production in Finland has been high, reaching 3.5 million m3 in the second quarter of this year, which is approximately the same level as a year ago, reports the Finnish Forest Industries Federation. During the first half of the year 6.9 million m3 of sawn timber was produced, amounting to 1% less than the year before. Furthermore timber stocks are down by 15%.
Due to new capacity, plywood production increased during the second quarter by 6% over the same period last year, reaching 325,000m3 – a record level for any single quarter.
Change of ownership
There have been developments in the ownership of Moelven Industrier ASA. Up until recently Finnforest owned about 61% of the shares in the company, with Norwegian forest owners’ associations, together with a Swedish forest owners’ association, owning about 37%. Three of the Norwegian forest owners’ associations (Nord, Agder-Telemark and Viken) offered to buy Finnforest’s entire majority holding in Moelven but Finnforest rejected the offer. Consequently these three, together with the Swedish forest owners’ association Västra Skog, sold their shares in the company, leaving only two of the original Norwegian forest owners’ associations as shareholders (Glommen 15% and Mjösen 7.5%) with Finnforest’s parent company Metsäliitto now owning 16%.
“Forest owners in the Nordic countries are working towards closer and more developed co-operation,” said Runar Lillandt, chairman of Metsäliitto’s supervisory board. “Metsäliitto is naturally an ideal owner for an industrial company like Moelven and this is the way for Metsäliitto’s members, the Finnish forest owners, to have an ownership stake in an industry that is so important for all of us.”
A committee was asked to prepare an action plan for the protection of biodiversity in the forests of southern Finland, northern Ostrobothnia and south-western Lapland and the results were presented in July by Raimo Tammilehto, retired Finnish minister of forestry. A wide range of measures
aimed at sustaining natural diversity were proposed.
Protected areas
The committee proposed to increase the ecological effectiveness of protected forests by auditing the protected areas thoroughly, returning them to their original state and then monitoring their development over the long term. Only after this investigative phase is complete in 2007 will a decision
be made as to whether there are any
potential requirements for further
protective measures.
Finnish forestry companies have also announced new developments in China, Russia and Estonia.
UPM-Kymmene’s subsidiary in China, UPM-Kymmene (Changshu) Paper Industry Co Ltd, has received approval to build a 450,000 ton per year fine paper line.
Also in China, Stora Enso and the Guangxi Zhuang Autonomous Region government plan a pre-feasibility study on establishing plantations and integrated pulp and paper operations in Guangxi Zhuang.
In Russia, UPM-Kymmene is to build a sawmill in conjunction with the Russian timber company ZAO Novgorodlesprom. UPM-Kymmene will have a majority holding in the new sawmill, which is due to start operations at the end of 2003. The estimated cost of the project is e30m. The sawmill, which will initially produce 200,000m3 of sawn whitewood a year, will be built in Pestovo in the Novgorod region.
“UPM-Kymmene considers it strategically important to be active in Russia, which now offers good opportunities for the wood processing industry. At the same time, it has become increasingly difficult to operate a profitable wood products industry in Finland,” said Kari Makkonen, president of UPM-Kymmene Wood Products Industry.
Sawmill intentions
Also in Russia, Stora Enso Timber has signed letters of intent to build two sawmills, each with an annual capacity of 100,000m3 of products produced using profiling technology. One will be located in the town of Pitkäranta in Russian Karelia and the other in the village of Nebolchi, 200km from Novgorod. The investments involved will be e8m and e4.5m respectively, with the sawmills starting their operations in the first and third quarters of 2003 respectively.
Stora Enso Timber has also signed a letter of intent to acquire 66% of the outstanding shares of the sawmilling operations and 100% of the wood procurement operations of AS Sylvester, Estonia’s largest sawmilling company, which has annual net sales of approximately e160m. Through this acquisition, Stora Enso will become the leading sawmilling and wood procurement com-pany in the Baltic states in addition to being the clear leader in Europe.
“The acquired mills will complement and enhance the product portfolio of Stora Enso Timber, and support the group’s wood procurement in the region. The Baltic states are a major emerging source and market for competitive high quality wood products, and an important area for wood raw material procurement,” said Arno Pelkonen, senior executive vice-president, Stora Enso, Timber Products.
The deal also provides a platform for further growth, including a commitment to build three more sawmills in Latvia, Lithuania and the Pskov region of Russia within the next few years.
