Metsä hit by decline in pulp prices

The annual result of forest industry company Metsä Group worsened in 2019 mainly due to the decline in pulp prices.

The group's profits dropped to 495 million euros (539.2 million U.S. dollars) in 2019 from 849 million euros in 2018, while its turnover worsened slightly from 5.7 billion euros to 5.5 billion euros, the company said on Wednesday.

The prices of mechanical forest industry products also dropped in 2019. However, Metsä said it does not expect the decline in pulp prices to continue in 2020.

President and Chief Executive Officer (CEO) Ilkka Hamala noted that Metsa expects consumer demand to grow in developing markets. "The potential of renewable materials, such as wood, for replacing fossil-based materials is good in all markets," Hamala was quoted as saying in a press release.

Hamala also regarded the current markets for folding boxboard, white kraft liner, tissue and greaseproof papers as good or stable.

The Metsä Group is Finland's third largest forest industry operator. Present in 30 countries, it is a cooperative of forest owners, while its subsidiaries are publicly listed. Metsä's bioproduct mill in Aanekoski, Finland is the largest wood-processing plant in northern hemisphere. The company has expansion plans in Husum, Sweden and in Kemi, Finland.

Earlier this year, two other leading forest industry giants headquartered in Finland -- Stora Enso and United Paper Mills (UPM) -- also published their 2019 results, showing that they too suffered greatly from the decline in pulp prices.