Developing the forest business requires hard work and collaboration

Sauli Brander
Sauli Brander
Senior Vice President UPM, Wood Sourcing and Forestry
8 July 2016

News of investments in the Finnish forest industry has electrified the discussions around the sufficiency of raw material. According to the most recent national forest inventory, there is plenty of wood in Finnish forests. The question is: how can this wood best be utilised? In Finland the forests are typically privately owned. How eager are Finnish forest owners to manage and utilise their forests and how can Finland keep its traffic infrastructure in good condition?

New investments in the forest industry encourage forest owners to manage their forests in an active and sustainable manner. The investments also mean additional income to forest owners: increasing the use of wood by approximately 10 million cubic metres translates into an additional income of approximately EUR 350 million. Despite this, there is a significant number of forest owners who have not identified the potential of the forests they own.

Wanted: a new comprehensive solution

What is needed is a comprehensive solution that includes measures with rapid effects and measures that will affect the structures in the long run. New tax models, activities that accelerate transfers to the next generation, and the distribution of estates are all part of this solution. We also need different ways of owning forests: jointly owned forests, funds and other forms of ownership that place the focus on diverse forest values. UPM expects the government to genuinely work on these matters.

The increase in wood use also means more work and income for harvesting and transport entrepreneurs and more tax income to the state. Each cubic metre of wood ending up at a mill results in approximately 14 euros of various taxes. If the Finnish wood trade increases by 10 million cubic metres, the tax income of the state and municipalities will grow by approximately EUR 140 million per year.

A functional traffic infrastructure is important

Forest owners invest in forests and the forest industry invests in production plants. We need a functional traffic infrastructure to link forests to production facilities. Building and maintaining the cornerstones of our society is one of the most important tasks of the public sector. This includes creating suitable conditions for business life, in this case wood supply, to function smoothly. Good wood resources and a busy wood trade are of no use if the wood cannot be transported from forests to mills in a reliable manner and without interruptions.

When we rejoice over news on new investments, we need to keep in mind that our mills need wood every day. Taking care of the wood supply and competitiveness of UPM mills is part of the everyday duties of our staff. These duties include the optimisation of the entire supply chain and determining the best supply locations for each type of wood at each mill. Long transport routes or bad logistical connections would mean additional costs that eat away at the profitability of the mills. This is why we prefer to use local wood purchased from local forest owners.

Increasing wood-based biofuel production is one of the reasons more wood is needed on the market »

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