{"id":87009,"date":"2023-11-17T09:31:19","date_gmt":"2023-11-17T09:31:19","guid":{"rendered":"https:\/\/tin.happy-projects.ro\/estonian-timber-sector-finding-it-increasingly-difficult-to-compete-with-scandinavian-countries\/"},"modified":"2025-09-19T09:01:06","modified_gmt":"2025-09-19T09:01:06","slug":"estonian-timber-sector-finding-it-increasingly-difficult-to-compete-with-scandinavian-countries","status":"publish","type":"post","link":"https:\/\/www.timberindustrynews.com\/ro\/estonian-timber-sector-finding-it-increasingly-difficult-to-compete-with-scandinavian-countries\/","title":{"rendered":"Estonian timber sector finding it increasingly difficult to compete with Scandinavian countries"},"content":{"rendered":"

While the price of roundwood has come down considerably, which constitutes good news for the Estonian wood industry, prices remain higher in Estonia than neighboring countries. New sawmills are being opened in Scandinavia, while their Estonian counterparts are closing and surrendering market share.<\/span><\/p>\n

A timber market overview for the third quarter reveals that the recession and Estonia's contracting construction market continue to negatively impact the situation. Pine logs have become 30 percent and spruce around 20 percent cheaper on year.<\/p>\n

Henrik V\u00e4lja, executive manager of the Estonian Forest and Wood Industries Association, said that lower roundwood prices constitute good news for the industry. Unfortunately, raw material and energy prices remain higher in Estonia compared to other countries in the region, which makes it difficult for Estonian wood products to compete on international markets.<\/p>\n

\"Times are also difficult on our main export markets, which means lower demand. Unfortunately, we will probably see volumes fall further in one of Estonia's main export sectors and foreign trade balance contributors,\" V\u00e4lja said.<\/p>\n

He said that the Estonian government's political decisions and lack thereof are another contributing factor, pointing to plans to start limiting the availability of local raw material.<\/p>\n

\"This has resulted in Nordic groups pulling out of Estonia and local companies dialing back investments or investing outside of Estonia.\"<\/p>\n

The expert added that most companies have likely already cut staff and any further layoffs will likely follow companies going out of business.<\/p>\n

\"During a time when new sawmills are being opened in Scandinavia, ours are closing shop and surrendering market share,\" V\u00e4lja remarked. \"It is the same situation with new green industries, with two wood chemistry projects shelved for lack of courage to invest. At the same time, there are around 50 similar plants in the Nordics, with another major project to open in Kemi, Finland soon.\"<\/p>\n

Expert: The Estonian economy has not hit bottom yet
\n<\/strong>
\nOver \u20ac2 billion has been invested in the Kemi pulp mill that is estimated to need 7.6 million cubic meters of timber and produce 1.5 million tons of cellulose and other bioproducts annually.<\/p>\n

Major wood sector companies see turnovers fall by up to 40 percent<\/strong><\/p>\n

The third quarter wood market overview points to data from KPMG Law according to which major wood industries in Estonia saw their business shrink by 30-40 percent in the second quarter of 2023, whereas experts do not forecast a rapid recovery.<\/p>\n

Martti Kork, executive manager of glued timber maker AS Barrus, said that the number of new building permits issued in Finland, Sweden and Denmark is down 30-50 percent. \"I do not think we will see the situation improve before 2025,\" he said.<\/p>\n

Barrus is especially worried by falling pine logging volume. The price of pine logs is 20 percent higher in Estonia than in Finland and Sweden.<\/p>\n

The market overview by Heiki Hepner from O\u00dc Tark Mets points to the cooling global economy, Russia's war in Ukraine and poor decisions in Estonia as the main causes for the slump.<\/p>\n

\"It has to be said that the Estonian state has done everything in its power to make sure no one wants to invest or open new industries here. Therefore, the situation is complicated, market visibility low, all of which has negatively impacted the local industry's competitive ability,\" he said.<\/p>\n

Hepner added that while the Finns do not consider their situation to be rosy either, the Finnish government has ensured availability of raw material for years to come, with state forest manager Mets\u00e4hallitus' logging volumes set to remain where they are.<\/p>\n

Data from Swedbank suggests construction volume was down 16 percent in Q2 year-over-year, with a 12 percent annual drop forecast for the whole year.<\/p>\n

In Sweden, new construction projects are down 57 percent on year. No fewer than 220 companies have gone bankrupt in Finland, which statistics suggests is the country's annual bankruptcies record for the last 26 years. One of Finland's leading small wooden buildings makers Jukkatalo has also filed for bankruptcy, with falling demand given as the reason.<\/p>\n

In Estonia, Harju County Court in mid-October declared the bankruptcy of Kaper Moduls O\u00dc that mainly sold modular houses to the Swedish market.<\/p>\n

Swedbank believes the timber and construction materials market slump in Estonia and Finland could stabilize next year, while instead of growth there will likely be stagnation.<\/p>","protected":false},"excerpt":{"rendered":"

While the price of roundwood has come down considerably, which constitutes good news for the Estonian wood industry, prices remain higher in Estonia than neighboring countries. 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