The Finland Sawmilling market is a topic of interest for several timber industry experts globally. Mr Amir Rashad, the CEO of Timber Exchange, recently hosted a Timber & Technology webinar that focused solely on the subject. To do the same, he brought on board the Chief Executive Officer of Finnish Sawmills Association (Sahateollisuus) and Sales Director of Koskisen Sawmills - Mr Tommi Sneck.
Taking place on the 25th of May 2022 over a video conference that was attended by industry experts and enthusiasts all over the world, this hour-long webinar spoke about the Finnish sawmilling industry in general, the current operational environment of the market, the effects of the Russian sanctions, and what the future holds.
Amir took the lead by sharing how Timber Exchange benefits the global timber market through its four major features – Smart supply chain tools, B2B Marketplace, Market Data Hub and Trade-Finance and Compliance Services.
He then went on to introduce the panellist, and the session went on to touch upon pointers such as:
- What makes sawmilling in Finland unique and competitive?
- How is the Finnish timber industry adapting to current circumstances?
- Are there currently any big changes in stumpage rates, raw material availability or bark beetles?
- What are the effects of Russian sanctions?
- What is the market outlook for Finland and its trade partners?
Mr. Sneck opened the floor by speaking about how the Finnish sawmill industry is unique and has the best practices around the world by mentioning that “there are around 80 industrial sawmills in the area with a production output of 12 million. As the fourth biggest exporter, as per last year’s data, the importance of the sawmilling industry in Finland is big.”
He also goes on to mention that “75% of the land area is covered by forests, around 21 million hectares are available for wood production, and 65% of the forests are owned by private families.”
While sharing a graph mentioning stumpage prices of Roundwood and its changes from 1995 to 2021, Mr. Sneck adds that the “non-working Roundwood market has also been a headache in Finland for the sawmills for many years.”
“We see almost a 100% increase on the whitewood sawlogs but only a 2% increase in whitewood pulpwood. The pulpwood graph is like a dead man's heartbeat. The only changes that have been happening are in the log side.”
“The forest owners are mainly concerned about the log price. Even though we harvest more pulpwood from Finland annually than sawlogs. That’s the kind of market habit we have had for years.”
When prompted about the legal landscape and what is happening there, Mr. Tommi shares, “the forest sector in Finland, we have been thinking that this is a nightmare that will pass, but unfortunately, this will not pass. There are so many processes in the EU dealing with forests that are trying to hurt the ways that we try to use the forests today.”
Talking about the harvesting levels, he adds, “if you look at the harvesting today in Finland, we harvest around 70% of the annual growth. But still, the starting point should be the same for everybody.”
He goes on to share, “on one side, we see a shrinking supply from Russia, Ukraine, and Belarus. On the other side, we see inflation and the general lack of consumer confidence due to the war in Ukraine. We're trying to find a balance here.”
“I think we will soon have two groups of markets. One that will accept Russian sawn timber and one that doesn’t. Finnish sawn timber will more or less go to the group that doesn’t accept Russian sawn timber. This is my strong prediction for autumn,” he adds.
On the topic of Russian sanctions and how it affects Finland, he mentions, “we have to wait until next Autumn to see the effect of the missing Russian sawn timber in the EU.”
Mr. Sneck shares, “there are three groups of sawmill companies in Finland. First off, there are integrated sawmills that are basically pulp & paper companies. On the private side, there will be mills that will either expand or sell their mill. The third group is those who are more small family-private businesses who have a next-generation coming up.”
Talking about the logistical issues faced by Finland over the past few years, Mr Tommi mentions, “we haven’t had any bigger issues than others all this while. At the moment, there are a lot of containers in Finland because the container companies are trying to empty the Russian harvest, and they are bringing it to Finland. The situation is very good, but for a longer period, there might be a risk there.”
Towards the end of the webinar, while speaking about what the future holds, the speaker adds, “I think the European sawn timber market has become a little bit like the North American lumber market. It is much more volatile these days.”
He also adds, “I believe that this Russian supply going away in the autumn will give us some sort of cushion so that if we're going down, we are not going down as low as we used to go. So, there will be a difference.”
While Amir shared a few quips about the industry & knowledge about the market gathered from previous encounters, the webinar ended with a Q/A session from the audience where the speaker was asked vital questions on the Finland sawmilling industry.