Finnish forest industry booming, study finds
Associated Press, Copyright 2000
October 25, 2000
By MATTI HUUHTANEN, Associated Press Writer
HELSINKI, Finland - Finland, known for its technical innovations in an increasingly wireless society, is also seeing a sudden surge in its more traditional export sector, the forest industry.
Buoyed by a strong world economy, the country's paper and pulp makers are enjoying record growth, according to a report released Wednesday by the Finnish Forest Research Institute. Forecasts for 2001 are equally good.
Pretax profits of the country's three largest forest groups, UPM-Kymmene, Stora Enso and Metsaliitto, are expected to top $2.8 billion this year, a 54 percent increase from last year,the government-run institute said.
The total value of forest product exports will grow by nearly 4 percent this year and in 2001, up from 2.7 percent growth in 1999, according to the report. "The Finnish forest sector always does well when the world economy is doing well," senior researcher Lauri Hetemaki said.
In an industry where pricing is in dollars, a decline in the value of the European Union's common currency also has helped Finnish paper and pulp makers and sawmills.
"So, we're in a situation where there's high demand in the export sector, Finland is competitive because of the weak euro, and there's very little new production coming onto the market," Hetemmaki said.
On Tuesday, the world's third-largest papermaker, Helsinki-based UPM-Kymmene, released a record third-quarter result and predicted strong growth for the rest of the year.
UPM-Kymmene's net sales in the three months ending Sept. 30 hit $2 billion, up from 2 billion euros for the same period in 1999, while its nine-month profit doubled to $962 million.
From January to December, UPM-Kymmene's total paper production topped 6,000 million tons - up 10 percent on the same period last year.
Juha Niemela, the group's chief executive officer, said some of their plants were runnning at full capacity. "For about a year now we've been going at full steam, and at times there's been a shortage of pulp and paper on the markets," Niemela said.
Market analysts are expecting equally strong performances from Stora Enso and Metsaliitto - which includes the Metsa Serla group - when they announce their third-quarter earnings next week.
Export prices of paper products will grow by an average 12 percent this year and in 2001, the forest research institute said. The value of pulp and paper exports is expected to grow 14 percent this year and 15 percent in 2001.
Finland, a sparsely populated nation of 5.2 million, has a total land area of 135,000 sq. miles, of which 65 percent is covered by forest. Its most famous company is mobile phone giant Nokia.