Forest industries suffer pulp price decline

Two leading forest industry giants headquartered in Finland, Stora Enso and United Paper Mills (UPM), both published their 2019 results on Thursday, showing that they suffered greatly in 2019 from the decline in pulp prices.

Both companies operate internationally. Stora Enso was hit worse than UPM. Its profits for the whole year declined by 28 percent and turnover by four percent. The operative profit for 2019 was 953 million euros, while in 2018 it was 1,325 million euros. The turnover for the whole year was 10,055 million euros, News Agency STT reported.

Annica Bresky, CEO of Stora Enso who began her work last year, singled out the low price for pulp as the main reason.

A Finnish language newspaper Helsingin Sanomat reported on Thursday that the price of bleached longfibre pulp produced in Europe came down in 2019. The price is now somewhat lower than the 2010s average, the report said.

In her written statement published on Thursday, Bresky expressed concern about the labour market situation in the Nordics against the backdrop of the major strikes in pulp industry continuing in Finland. She said it is important that the Nordic countries would maintain the worldwide competitive edge of their export industries.

Stora Enso predicted that vista for 2020 remain challenging because of geopolitical uncertainties and the mild winter in the Nordic area hampering harvesting.

UPM profits declined seven percent from 2018, to 1.4 billion euros, while its turnover dropped two percent to 10.2 billion euros. UPM exceeded Finnish analyst expectations.