Stora Enso will permanently close its 200,000 m\u00b3 Veitsiluoto sawmill in Kemi and move pine production to its newer and larger units in northern Finland. The decision removes one of Finland\u2019s older sawmills but does not signal a comparable withdrawal from the regional log market, as the group intends to retain most of the production and wood procurement within its Oulu, Kalajoki and Oulainen network.<\/p>\n
Stora Enso has completed the negotiations launched in August over the future of the Veitsiluoto sawmill, confirming that production will not restart after the temporary curtailment introduced at the beginning of August. Around 60 employees will lose their jobs.<\/p>\n
The Kemi mill, established in 1922, has an annual softwood lumber capacity of approximately 200,000 m\u00b3 and has concentrated on pine products. Stora Enso will transfer the production to its remaining northern Finnish sawmills, with Oulu and Kalajoki expected to take the largest share.<\/p>\n
The closure is therefore both a capacity adjustment and an internal redistribution of production. Stora Enso has not indicated that the entire nominal capacity of Veitsiluoto will disappear from its sales portfolio. Some volumes can be absorbed by other mills, particularly as the new Oulu sawmill continues to increase output.<\/p>\n
The company said its sawlog demand in northern Finland would be affected only marginally. Pine sawlogs previously directed to Kemi can be allocated to Oulu, Kalajoki and Oulainen, while pulpwood and sawmill chips remain required by Stora Enso\u2019s expanding packaging board operation in Oulu.<\/p>\n
Veitsiluoto became the oldest asset in a much larger network<\/strong><\/p>\n The industrial structure surrounding Veitsiluoto changed substantially after Stora Enso acquired Junnikkala in May 2025. The transaction brought the Oulu, Kalajoki and Oulainen sawmills into the group, adding approximately 700,000 m\u00b3 of annual softwood lumber capacity and increasing Stora Enso\u2019s Finnish wood procurement by an estimated 1.7 million m\u00b3 per year.<\/p>\n The acquired assets gave the company a much larger and more modern production network in northern Finland. Kalajoki supplies construction and joinery customers, Oulainen specialises in smaller-diameter logs, and the new Oulu sawmill began ramping up production at the end of 2023. The Oulu unit has an annual capacity of approximately 300,000 m\u00b3 and produces both pine and spruce lumber.<\/p>\n Against this background, operating the 102-year-old Veitsiluoto sawmill alongside three recently acquired units became increasingly difficult to justify. Production can now be allocated according to log dimensions, product mix, delivery destination and proximity to the Oulu industrial complex.<\/p>\n Stora Enso paid up to \u20ac137 million for Junnikkala, with part of the price linked to production targets. The group expects annual synergies of approximately \u20ac15 million once the new Oulu sawmill reaches full production. Those synergies depend partly on concentrating wood flows and making greater use of the links between the sawmills and the Oulu board mill.<\/p>\n The Veitsiluoto decision should therefore be read as part of the integration of Junnikkala rather than as an isolated response to several weak months in the softwood lumber market. The group has added considerably more sawmill capacity in northern Finland than it is now removing at Kemi.<\/p>\n Even after the closure of Veitsiluoto, the three former Junnikkala mills retain about 700,000 m\u00b3 of combined annual capacity. This is approximately 500,000 m\u00b3 more than the nominal capacity being taken out at Kemi.<\/p>\n High pine sawlog costs collide with weak lumber demand<\/strong><\/p>\n The timing of the consolidation is nevertheless closely connected to difficult market conditions. Finnish sawmills entered 2026 with raw-material costs still high relative to the prices available for softwood lumber.<\/p>\n Standing-sale prices for pine sawlogs averaged \u20ac73.17\/m\u00b3 in January 2026, according to the Natural Resources Institute Finland. Prices increased again during the spring and reached \u20ac77.28\/m\u00b3 in May. Although this remained below the exceptional peak registered in June 2025, it left sawmill margins under pressure as pine lumber demand weakened.<\/p>\n Pine sawlog prices dropped sharply in June, but the correction came too late to repair first-half profitability. Roadside prices also remained high, indicating that harvesting and delivery costs continued to place Finnish mills at a disadvantage against competitors operating with cheaper raw material.<\/p>\n The pressure has been more severe in pine than in spruce. Finnish pine lumber is highly dependent on exports to North Africa, the Middle East and Asia, where purchasing slowed and competition remained intense during the first half of 2026. Demand in several European construction markets also remained insufficient to support the price increases required by Finnish producers.<\/p>\n Finnish softwood lumber production fell by around 3% year on year to 6.1 million m\u00b3 in the first half of 2026. The decline followed a strong production increase in 2025, when the country\u2019s output reached approximately 11.7 million m\u00b3, 7% more than in 2024.<\/p>\n The comparison indicates that the industry entered 2026 with increased production capability and weaker sales conditions. In the first quarter alone, output fell by 6% to 2.9 million m\u00b3, while softwood lumber exports declined by 13% in January and February.<\/p>\n Pine exports performed particularly poorly, falling by 18% during the first two months of the year. Average export prices increased slightly, but not enough to offset lower volumes and persistently expensive sawlogs. The value of Finnish softwood lumber exports consequently fell by 10% to \u20ac286 million.<\/p>\n Veitsiluoto was particularly exposed to this imbalance because of its concentration on pine. Transferring production to mills able to divide fixed costs across larger volumes or process a wider range of log dimensions offers Stora Enso a faster route to reducing unit costs than maintaining a separate operation in Kemi.<\/p>\n Integration with packaging changes the economics of the sawmills<\/strong><\/p>\n Stora Enso\u2019s northern Finnish sawmills are no longer operated solely as independent lumber production sites. They also form part of the raw-material network serving the company\u2019s packaging board investment in Oulu.<\/p>\n The group converted a former paper machine at Oulu into a high-capacity consumer board line through an investment of approximately \u20ac1 billion. The machine started ramping up in 2025, increasing the site\u2019s requirement for pulpwood, sawmill chips, bark and internally sourced biomass.<\/p>\n Sawmills generate large quantities of chips and other residues alongside lumber. Locating significant sawmill capacity close to the Oulu board mill allows Stora Enso to use these by-products internally and reduce transport and procurement costs. The arrangement also gives the company more flexibility when dividing purchased wood between sawlogs, pulpwood and energy assortments.<\/p>\n This connection helps explain why Stora Enso expects only a limited reduction in regional wood consumption after closing Veitsiluoto. Log intake can move to the remaining sawmills, while chips produced at those sites continue to supply the Oulu industrial complex.<\/p>\n The company will retain approximately 840 employees across its Oulu board mill, the Oulu, Oulainen and Kalajoki sawmills and its port operations following the closure.<\/p>\n Another stage in the contraction of the Veitsiluoto site<\/strong><\/p>\n The sawmill closure marks the latest reduction at an industrial site that once combined pulp, paper and lumber production on a much larger scale.<\/p>\n In 2021, Stora Enso permanently stopped three paper machines, chemical pulp production, groundwood production and sheeting operations at Veitsiluoto as demand for printing paper declined. The decision directly affected about 550 Stora Enso employees, with additional losses among contractors and service providers.<\/p>\n The sawmill continued operating and became one of the remaining industrial activities at the site, employing around 50\u201360 people. Its closure five years later ends Stora Enso\u2019s lumber production at Veitsiluoto and removes an operation that had been active for more than a century.<\/p>\n The employment impact is relatively limited when measured against the 2021 shutdown, but it is significant for Kemi and the Sea Lapland region, which has already experienced a major industrial restructuring. Stora Enso said it would provide relocation assistance, employment coaching and support for workers interested in transferring to other sites.<\/p>\n Northern Finnish sawlog demand is unlikely to fall proportionally<\/strong><\/p>\n For forest owners and timber suppliers, the immediate consequence is more likely to be a change in delivery routes than a loss of demand equivalent to the full Veitsiluoto intake.<\/p>\n Oulu lies approximately 110 kilometres south of Kemi, while the Kalajoki and Oulainen units are farther south. Redirecting logs will increase average transport distances for some suppliers in the Kemi area and could change the competitiveness of individual harvesting locations.<\/p>\n However, Stora Enso\u2019s enlarged network continues to require large quantities of pine and spruce sawlogs. The company has specifically stated that demand for high-quality logs will continue at Oulu, Oulainen and Kalajoki. Pulpwood and chips will also remain necessary for the Oulu board mill.<\/p>\n The redistribution may increase competition for logs closer to the three continuing sawmills while weakening Stora Enso\u2019s purchasing position in the northernmost part of the former Veitsiluoto procurement area. Other industrial buyers could gain access to volumes previously committed to the Kemi mill, depending on transport economics and contract structures.<\/p>\n A reduction in Finnish sawmill output could eventually ease log prices, but the Veitsiluoto closure alone is unlikely to produce a major change. Much of its production is being transferred, and Stora Enso\u2019s integrated board and sawmill network still requires substantial domestic wood volumes.<\/p>\n Consolidation rather than a full capacity withdrawal<\/strong><\/p>\n Veitsiluoto\u2019s nominal 200,000 m\u00b3 capacity will disappear as a separate production unit, but the effect on Finland\u2019s effective softwood lumber supply will depend on how much additional volume Stora Enso can run through Oulu, Kalajoki and Oulainen.<\/p>\n If most of the former Kemi output is transferred, the net reduction in national production could be considerably smaller than 200,000 m\u00b3. The closure would then represent the retirement of an older cost base rather than a complete removal of the associated sales volume.<\/p>\n The decision also indicates where Stora Enso intends to place future investment in northern Finland. Production is being concentrated around newer assets, larger throughput and direct connections with the Oulu packaging operation. Veitsiluoto, isolated from that integrated structure and dependent on a difficult pine lumber market, became the least competitive part of the network.<\/p>\n For Finland\u2019s sawmill industry, the closure adds to the evidence that high sawlog costs can no longer be absorbed through temporary curtailments alone. Production is increasingly moving toward mills able to secure higher recovery rates, use a wider range of log sizes and generate additional value from chips, bark and energy products.<\/p>\n Veitsiluoto had already been scheduled to remain idle between August and October. The conclusion of the negotiations turns that temporary stoppage into a permanent closure, but it does not end Stora Enso\u2019s expansion in northern Finland. It completes a transfer from a century-old site in Kemi toward a larger sawmill and packaging network centred farther south around Oulu.<\/p>","protected":false},"excerpt":{"rendered":" Stora Enso will permanently close its 200,000 m\u00b3 Veitsiluoto sawmill in Kemi and move pine production to its newer and larger units in northern Finland. The decision removes one of Finland\u2019s older sawmills but does not signal a comparable withdrawal … Continue reading