Production in the forest industry in Finland rose by over 6% in 2004 according to figures issued by the Finnish Forest Industries Federation. This was mainly a result of the strong gains in the pulp and paper industry, which achieved a rise in production of 7%, while the rise in the volume of wood products was only slightly over 2%.

In fact sawn wood production fell by over 1% in 2004 to slightly under 13.5 million m3 but this was to some extent compensated for by plywood production which showed an increase of nearly 4% and 50,000 m3, totalling 1.35 million m3 for the year. Plywood production was particularly strong in the fourth quarter of 2004 and at 350,000 m3 was nearly 8% higher than in 2003.

Stora Enso made a lower operating profit than the previous year despite increased sales but the company expects that market conditions will continue to remain favourable for them and that their profit enhancement programme will continue to improve performance. Other Finnish forest industry companies also took measures to increase efficiency in the face of very high raw material prices but low sawn timber prices, which are due to oversupply of Swedish and Finnish sawn timber.

Despite taking such measures, Finnforest‘s operating results for 2004 showed a loss, particularly in its sawmilling business despite it being operationally in good shape and the mills having high productivity levels.

But the company continues to invest. To meet growing demand for its wood-based building systems it is its Kerto production unit at Punkaharju in the east of Finland. Production capacity at Punkaharju will be increased by 60,000m3 a year to an annual 130,000m3. The investment involved will be €20m and the present aim is to begin production in February 2006. Finnforest’s total investment in plants at Punkaharju has thus risen to €70m since 2000 after two investment stages and a power plant investment.

Following the success of its Building & Timber Academy model in the UK, Finnforest has also started to use it to coach its own personnel and customers in Finland and Scandinavia as well. Its intention is to improve knowledge of Finnforest products and services and provide information about the properties and advantages of wood in all its various end uses.

Modern building

The company has additionally announced that it is building Europe’s highest wooden office building in Espoo. The Finnforest Modular Office, FMO Tapiola will be ready in the autumn of this year and the company believes that it will mark a real step forward in modern wood-based building.

UPM-Kymmene was able to declare that a growth in delivery volumes kept the financial results the same as the previous year despite a further fall in sales prices and the negative effect of the stronger euro as a result of being in the euro zone. Furthermore, the targets set for its €200m cost-cutting programme were achieved earlier than envisaged.

UPM is to invest a total of €14m in the modernisation of the Korkeakoski and Kaukas sawmills and the Jyväskylä plywood mill. The aim of the investments, which will be complete by next autumn, is to increase the production of special products and ensure the competitiveness of the mills. This investment is in addition to the €4.5m investment in the Kaukas plywood mill announced in December last year. In addition the company is to invest in smaller projects that will improve production efficiency in the Finnish sawmills and plywood mills and improve their competitiveness.