Finnish and Austrian Wood Markets in a Changing Environment

At present the operating environment of sawmills in Europe is changing and there are uncertainties related in raw material supply in many countries. The changes in the operating environment of roundwood markets and the effects followed by these changes have brought up several interesting issues from the viewpoint of research. Lately new factors have been influencing the roundwood markets, such as increasing interest towards wood-based energy and implementation of new energy policies as well as changes in wood trade flows that affect the domestic markets in many countries. This Master’s thesis studies the adaptation ability of Finnish roundwood markets in a changing operating environment, aiming to produce an up-to-date analysis considering new development trends. The study concentrates on the roundwood markets from the viewpoint of sawmill industry since the industry is dependent on the functioning of the markets and sawmills are highly affected by the changes on the roundwood markets. To facilitate international comparison, the study is implemented by comparing Finnish and Austrian roundwood markets and analysing changes happening in the two countries. Finland and Austria share rather similar characteristics in the roundwood market structures, forest resources and forest ownership as well as production of roundwood and sawnwood. In addition they both are big exporters of forest industry products. In this study changes in the operating environment of sawmill industry both in Finland as well as in Austria are compared to each other aiming to recognise the main similarities and differences between the countries. In addition both development possibilities as well as challenges followed by the changes are discussed. The aim of the study is to define the main challenges and possibilities confronted by the actors on the markets and also to find new perspectives to approach these. The study is implemented as a qualitative study. The theoretical framework of the study describes the operating environment of wood markets from the viewpoint of the sawmill industry and represents the effects of supply and demand on the wood markets. The primary research material of the study was gathered by interviewing high level experts of forestry and sawmill industry in both Finland and Austria. The aim was to receive as extensive country specific viewpoint from the markets as possible, hence interviewees represented different parties of the markets. After creating country-specific profiles based on the theoretical framework a cross-country comparison was implemented. As a consequence the main similarities and differences in the operating environment and on the roundwood markets of Finland and Austria were recognized. In addition the main challenges and possibilites were identified. The results of the study offer a wide analysis regarding the main similarities and differences of the wood markets of Finland and Austria and their operating environments as well as concerning challenges and possibilities faced on the markets.

Late-industrial sawmill customers.

The methods of secondary wood processing are assumed to evolve over time and to affect the requirements set for the wood material and its suppliers. The study aimed at analysing the industrial operating modes applied by joinery and furniture manufacturers as sawnwood users. Industrial operating mode was defined as a pattern of important decisions and actions taken by a company which describes the company's level of adjustment in the late-industrial transition. A non-probabilistic sample of 127 companies was interviewed, including companies from Denmark, Germany, the Netherlands, and Finland. Fifty-two of the firms were furniture manufacturers and the other 75 were producing windows and doors. Variables related to business philosophy, production operations, and supplier choice criteria were measured and used as a basis for a customer typology; variables related to wood usage and perceived sawmill performance were measured to be used to profile the customer types. Factor analysis was used to determine the latent dimensions of industrial operating mode. Canonical correlations analysis was applied in developing the final base for classifying the observations. Non-hierarchical cluster analysis was employed to build a five-group typology of secondary wood processing firms; these ranged from traditional mass producers to late-industrial flexible manufacturers. There is a clear connection between the amount of late-industrial elements in a company and the share of special and customised sawnwood it uses. Those joinery or furniture manufacturers that are more late-industrial also are likely to use more component-type wood material and to appreciate customer-oriented technical precision. The results show that the change is towards the use of late-industrial sawnwood materials and late-industrial supplier relationships.

Pre-harvest measurement of pine stands for sawing production planning.

To enhance the utilization of the wood, the sawmills are forced to place more emphasis on planning to master the whole production chain from the forest to the end product. One significant obstacle to integrating the forest-sawmill-market production chain is the lack of appropriate information about forest stands. Since the wood procurement point of view in forest planning systems has been almost totally disregarded there has been a great need to develop an easy and efficient pre-harvest measurement method, allowing separate measurement of stands prior to harvesting. The main purpose of this study was to develop a measurement method for pine stands which forest managers could use in describing the properties of the standing trees for sawing production planning. Study materials were collected from ten Scots pine stands (Pinus sylvestris) located in North Häme and South Pohjanmaa, in southern Finland. The data comprise test sawing data on 314 pine stems, dbh and height measures of all trees and measures of the quality parameters of pine sawlog stems in all ten study stands as well as the locations of all trees in six stands. The study was divided into four sub-studies which deal with pine quality prediction, construction of diameter and dead branch height distributions, sampling designs and applying height and crown height models. The final proposal for the pre-harvest measurement method is a synthesis of the individual sub-studies. Quality analysis resulted in choosing dbh, distance from stump height to the first dead branch (dead branch height), crown height and tree height as the most appropriate quality characteristics of Scots pine. Dbh and dead branch height are measured from each pine sample tree while height and crown height are derived from dbh measures by aid of mixed height and crown height models. Pine and spruce diameter distribution as well as dead branch height distribution are most effectively predicted by the kernel function. Roughly 25 sample trees seems to be appropriate in pure pine stands. In mixed stands the number of sample trees needs to be increased in proportion to the intensity of pines in order to attain the same level of accuracy.

Integrated climatic impacts of forestry and fibre-based packaging

The purpose of this study was to examine the integrated climatic impacts of forestry and the use fibre-based packaging materials. The responsible use of forest resources plays an integral role in mitigating climate change. Forests offer three generic mitigation strategies; conservation, sequestration and substitution. By conserving carbon reservoirs, increasing the carbon sequestration in the forest or substituting fossil fuel intensive materials and energy, it is possible to lower the amount of carbon in the atmosphere through the use of forest resources. The Finnish forest industry consumed some 78 million m3 of wood in 2009, while total of 2.4 million tons of different packaging materials were consumed that same year in Finland. Nearly half of the domestically consumed packaging materials were wood-based. Globally the world packaging material market is valued worth annually some €400 billion, of which the fibre-based packaging materials account for 40 %. The methodology and the theoretical framework of this study are based on a stand-level, steady-state analysis of forestry and wood yields. The forest stand data used for this study were obtained from Metla, and consisted of 14 forest stands located in Southern and Central Finland. The forest growth and wood yields were first optimized with the help of Stand Management Assistant software, and then simulated in Motti for forest carbon pools. The basic idea was to examine the climatic impacts of fibre-based packaging material production and consumption through different forest management and end-use scenarios. Economically optimal forest management practices were chosen as the baseline (1) for the study. In the alternative scenarios, the amount of fibre-based packaging material on the market decreased from the baseline. The reduced pulpwood demand (RPD) scenario (2) follows economically optimal management practices under reduced pulpwood price conditions, while the sawlog scenario (3) also changed the product mix from packaging to sawnwood products. The energy scenario (4) examines the impacts of pulpwood demand shift from packaging to energy use. The final scenario follows the silvicultural guidelines developed by the Forestry Development Centre Tapio (5). The baseline forest and forest product carbon pools and the avoided emissions from wood use were compared to those under alternative forest management regimes and end-use scenarios. The comparison of the climatic impacts between scenarios gave an insight into the sustainability of fibre-based packaging materials, and the impacts of decreased material supply and substitution. The results show that the use of wood for fibre-based packaging purposes is favorable, when considering climate change mitigation aspects of forestry and wood use. Fibre-based packaging materials efficiently displace fossil carbon emissions by substituting more energy intensive materials, and they delay biogenic carbon re-emissions to the atmosphere for several months up to years. The RPD and the sawlog scenarios both fared well in the scenario comparison. These scenarios produced relatively more sawnwood, which can displace high amounts of emissions and has high carbon storing potential due to the long lifecycle. The results indicate the possibility that win-win scenarios exist by shifting production from pulpwood to sawlogs; on some of the stands in the RPD and sawlog scenarios, both carbon pools and avoided emissions increased from the baseline simultaneously. On the opposite, the shift from packaging material to energy use caused the carbon pools and the avoided emissions to diminish from the baseline. Hence the use of virgin fibres for energy purposes, rather than forest industry feedstock biomass, should be critically judged if optional to each other. Managing the stands according to the silvicultural guidelines developed by the Forestry Development Centre Tapio provided the least climatic benefits, showing considerably lower carbon pools and avoided emissions. This seems interesting and worth noting, as the guidelines are the current basis for the forest management practices in Finland.