Editor’s pick“China still a big market for us”: Finnish Sawmill Industries

Finnish Sawmill Industries,Kai Merivuori,CEO,CIFF,China,Asia

Kai Merivuori, CEO of Finnish Sawmill Industries, shares his perspective on wood trade developments between Finland and China.

“There is more wood in our forest than ever. Wood is renewable. It is a great argument for its use these days,” Merivuori says. “Resource efficient and using high-tech systems, we are able to use everything we take from the forest.”

The Finnish Sawmill Industries of which Merivuori is CEO is an association representing 35 private sawmills. Together, they are responsible for 60 per cent of Finnish softwood production. Finland covered by 70 per cent forests (pine, 50%; spruce, 30%; birch, 16%). It has an annual forest growth of 104 Mn cbm. 60 per cent of this resource is utilised for industries. Furthermore, consumption can still be increased by another 15 Mn cbm, Merivuori says.

Finland ranks among the top five exporters of softwood lumber, behind Canada Russia and Sweden. (Germany is in fifth place.) Although USA, Canada, Russia, China, Germany are the world’s top five sawn wood producers, Merivuori estimates that his country’s production is projected to go up between 2016 and 2025.

Eyes on the China market

1993 marked the first time Finland exported to Japan. Then, it was a market that used to buy only European dimensions. Now, all European companies make according to Japanese specifications. Annual export figures have now stabilised at one million cbm.

Where five years ago, China did not even make it to the top five list of importing countries, it is now the third largest market for Finnish sawmills. (In 2016, the main export countries were Egypt, Japan, China, UK and France.)

In 2010, exports to the Mainland was 68,000 cbm; in 2016 it was one million cbm; this year, the figure is expected to rise to 1.5 Mn cbm. Furthermore, sawn softwood exports to China rose 20 per cent year-on-year in the first half of 2017.

“I have never seen such a development in my career, where exports to one country increases so quickly!” Merivuori claims. “We are keen to develop business between Finland and Chinese companies.”

Overall, demand for softwood sawn lumber will increase globally, as will that for renewable certified, sustainable wood. Merivuori adds that although demand from the Middle East is growing fast, there is also a lot of political instability in the region that hampers smooth development.

Other factors that would likely impede growth are volatile exchange rates, logistics market, political instability as well as the global availability and cost of raw material.