Finland's forest industry plans to invest €435M in 2013, down 12% from last year, inquiry finds; 35% will be spent on replacing old capacity, 7% on building new capacity, 53% on rationalization

Wendy Lisney

HELSINKI , January 28, 2013 (press release) – Forest industry’s investments in Finland are, after significant increase in 2011, decreasing also this year. The share of investments in new capacity is also decreasing.

According to the inquiry on industrial investments in Finland conducted by the Confederation of Finnish Industries EK, forest industry’s investment plans in Finland come up to 435 million euros this year. Compared to last year, there is a decrease of 12 percent.

Looking at the other industries, the figures are as low in electronics industries and much lower in metal products manufacturing and in textile and clothing industries, some 65 and 58 percent respectively. The absolute investment figures of textile and clothing industries are, however, very small.

On the other hand, graphic and chemical industries are going to increase their investments, some 29 and 10 percent respectively.

All in all, the manufacturing industries plan to invest some 3,200 million euros in Finland this year. This means a decrease of nine percent.

Only 900 lost their jobs in Finland

Fears have been expressed that investments in Finland are so low that industry equipment starts to deteriorate. Theoretically this happens when investments are lower than depreciations.

On the other hand, calculations subcontracted by the largest economic newspaper in Finland, Kauppalehti, show that this has not happened in Finland at least before October 2012, as far as listed companies are concerned.

As to the forest industries, 35 percent of this year’s investments are planned to replace old capacity. Seven percent will be used to build new capacity, which is significantly less than the predicted figure of previous year, 27 percent.

53 percent of the investments will be used in rationalising, while the previous year’s predicted figure was 30 percent.

Looking at the factors behind investment plans, especially the lack of demand is expected to lessen the interest to invest in several industry branches. This is the case especially in the forest and food and beverage industries.

Technical factors contribute to investments in forest industry more than in the previous year, in about 26 percent of investment decisions. Technical factors mean developments in technology.

Of the Finnish forest industry companies’ personnel, some 54,900 were working abroad in 2012, which is more than in previous year and slightly more than in Finland, 49,100.

The number of those working abroad has increased by 1,400, while the number of those working in Finland has decreased by 900 since 2011.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.