Vision of the forest sector’s future

Director-General Juha Ojala, Ministry of Agriculture and Forestry, Department of Forestry

Vision of the forest sector’s future

How to modernise the forest sector is the single issue that worries me most. The forest sector was the key element in the creation of our affluent welfare state. For a very long time, forest industry exports accounted for 30 to 50 per cent of the aggregate exports and were the principal source of foreign currency input and revenue. Major investments were made in the forest industry from the 1960′ to the 1990s: in new products and paper grades, and a more efficient sawmill industry. These investments created the prerequisites for the forest companies’ success, growth, and international operations.

In the last decade, this development was reversed, and the forest sector’s share of the gross national product and employment opportunities decreased sharply. Today, the forest sector accounts for 16 to 18 per cent of the country’s aggregate exports and employs approximately four per cent of the workforce. Investments in production capacity are now targeted outside Finland, and R&D investments remain at a very modest level. Over the last few years, also overall consumption of wood has begun to stall.

Investing in the forests over the years has paid off: annual stand growth is 100 million cubic metres. Yet most of the growth – i.e., return on the capital invested – is not harvested, and this is something our national economy cannot sustain. Addressing the environment-related forestry issues was an excellent thing to do in itself, and something that simply had to be done. However, we should have invested simultaneously in the development of business know-how, customer-centric product development, and increased refining value.

In my vision, the trends of the past decade will be reversed, and the turnover, exports, and profitability of all trade and industry relying on forests will start to increase. This cannot be accomplished through enhancing the production efficiency of existing products; instead, we will have to manufacture products with a greater degree of refining and start providing services associated therewith. This will require in the coming years significant investments in the development of wood-based products and services.

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