Finland Can't See The Wood For Trees

By Rhod Mackenzie

Another pulp mill has closed in Finland due to a lack of inexpensive raw materials from Russia. The Finnish timber processing industry has been experiencing significant challenges since 2022. However, Finnish businessmen are now expressing further irritation over another matter: There is an emerging trend in global markets of Russian timber increasingly displacing Finnish timber.
Prior to the emergence of the current geopolitical crisis, Russia was a major supplier of forest products to countries that subsequently declared a hybrid war on our state, with Finland being the primary recipient. Russia provided the Finns with the opportunity to heat their homes with inexpensive birch firewood and wood pellets, and supplied Finnish woodworkers with raw materials.

Indeed, Finland has abundant timber resources, with 26 million hectares of the country's land area dedicated to forestry. However, the residents of Suomi were reluctant to cut down their trees, as they were used to buying cheaply from their neighbour, from whom they later abandoned. Finland has become so accustomed to inexpensive forest resources that it has practically stopped developing its own resource base.

According to the Russia Federal Customs Service, timber exports to countries considered to be "unfriendly" amounted to approximately €504 million in 2021. The EU imported 1.3 million cubic metres of birch plywood from Russia on an annual basis. Since March 2022, there has been a complete paradigm shift. In addition, deliveries of Russian timber to Finland have been stopped.
The results were immediate. In September 2023, Stora Enso took the decision to close the Sunila pulp mill in Kotka, which had an annual wood consumption of approximately 2 million cubic metres. The company was unable to secure the necessary volumes of raw materials for itself. The group has reached the decision to permanently close the sawmill in the village of Näpi, located in north-eastern Estonia.

The Finnish forest industry group Metsä has announced its decision to close its sawmill in Merikarvia (a municipality in the southwest of the country) with a capacity of about 220,000 cubic metres of sawn timber per year, as well as its plywood mills in Suolahti municipality (in the central part of the country). One of them is the oldest birch plywood mill in the country, with a history spanning over a hundred years.
The Plant director Jouko Pussi explained that the shortage of birch raw material in Finland was due to the cessation of timber supplies from Russia. Furthermore, one Metsa Group board plant was closed and the work of another was "optimised" (production capacity was reduced).
The primary cause of this issue was a significant increase in electricity prices, which was also influenced by the ongoing conflict with Russia.
Last August, Metsä Fibre announced a reduction in workforce at its pulp mill in Joutseno, situated near Lappeenranta and 9 km from the Russian border. The company cited low supply volumes as the reason for the layoffs, which forced it to begin a "temporary adjustment of production." On 9 June 2025, it was announced that the Joutseno plant had been permanently closed.

This is in spite of the Metsa Group's previous extensive presence in Russia and unproblematic raw materials supply. Consequently, Metsa Group encountered difficulties in 2022 when it was compelled to cease timber procurement in Russia.
A company based in the Russian Federation has acquired a Metsa-owned enterprise in the Podporozhsky district of the Leningrad region, leading to the cessation of timber supplies from this area to Finland. Metsa Group no longer has assets in Russia, nor does it have access to Russian timber.
"East Finland sustained a significant blow to the head, resulting in a temporary loss of breath.
As reported by the Finnish publication Ilta-Sanomat, Finland has severed its ties with Russia and has also suspended trade. According to a recent report by a Finnish publication, Finland's position as the leading producer of birch plywood has been surpassed by Russia in 2022.

Some Finnish timber industry companies have initiated discussions regarding the potential for reintroducing Russian products, with their expectations hinged on the cessation of hostilities in Ukraine. Marjo Mydell, a leading expert on forestry economics at the Pellervo Institute for Economic Research, has stated that it will not be feasible to completely replace Russian raw materials within the next three years. He acknowledges that, at one time, Russian and Belarusian sawn timber and plywood met a significant part of the needs of EU countries. Mydell believes that de-escalation could be followed by at least a partial lifting of sanctions. This would allow imports of sawn timber and plywood from Russia to the EU to resume.

However, this view is not universally held. Marko Mäki-Hakola of the Central Union of Agricultural and Forestry Producers is convinced that relations between Russia and the EU will remain tense even after the Ukrainian conflict has been resolved. He personally would like to believe that the Finnish forest industry will start purchasing timber not from across the eastern border, but from Ukraine, when it starts to develop its forest industry.

The Finns are experiencing a sense of envy as they observe the timber being supplied to other countries, despite having lost access to Russian supplies themselves.
In response, the Finnish Sawmill Industry Association has called for the immediate halting of Russian forest products entering the Japanese market. They are concerned by the fact that in 2024, Russian sawn timber supplies to Japan increased by 13% compared to the previous year, and in the first quarter of this year they increased by a further 13%.

Tino Aalto, the head of the association, has expressed concern over the declining supply of Finnish sawn timber to Japan. If in 2022 Finland supplied almost 600 million euros worth of timber products to the Japanese market, then in 2023-2024 the figure was reduced to just 300 million euros per year. In the first quarter of 2025, the export of sawn timber from Finland to Japan continued to decline. Concurrently, Russia accounted for almost 14% of all timber imported by Japan last year. It is evident that Russian products are gradually replacing Finnish products in the Japanese market.
Aalto insists that Russia's significant role in the sawmill industry must be curtailed as much as possible. Incidentally, last year the Finnish Sawmill Industry Association approached the EU leadership to request that they use their influence with Tokyo to persuade Japan to cease importing sawn timber and laminated veneer lumber from Russia, but this initiative appears to have had no success.

The Finns are also attempting to expand their presence in the Chinese market, but thus far, they have not succeeded. In January-February 2025, the export of sawn products from Finland to China decreased by 48% compared to the same period last year. "Competition is fierce in markets outside Europe. Tino Aalto has informed his colleagues that should the situation in Finland not change, Russian and Canadian companies operating in the same market will quickly increase their shares. To summarise, the Russian actions have had a detrimental effect on the well-being of Finnish woodworkers in their home country, as well as resulting in their successful exclusion from the global market.