Metsä Group implemented a major development investment programme between 2015 and 2018. Most of the new production capacity created during this EUR 2 billion investment programme was in use in 2018. The favourable economic situation enabled all business areas to sell their increased production capacity in the market. This, combined with improved product prices, led to an excellent financial result in 2018.
There is an ongoing global demand growth in all areas of our business portfolio. We must actively take development steps to support this growth. In engineered wood products, pulp, paperboard, and tissue and greaseproof papers, our focus is on sustainability throughout the value chain. One of Metsä Group’s special strengths is that through our parent company, Metsäliitto Cooperative, we can establish a direct link between sustainable family forestry and our industrial business operations and products. As the largest provider of forest services in Finland, Metsä Group plays a prominent role in the development of sustainable forestry.
In August 2018, the Äänekoski bioproduct mill reached its nominal production capacity on schedule. In May, Metsä Fibre launched a prefeasibility study related to the renewal of the Kemi pulp mill.
The testing phase of the Pärnu birch plywood mill was completed in August, and the mill began production. The birch veneer mill established in Äänekoski had already started veneer production earlier in the spring. In operation since 2017, the Lohja laminated veneer lumber (LVL) line reached nominal production capacity. The Punkaharju LVL line investment project progressed as planned towards its estimated completion in Spring 2019.
In the fourth quarter of 2018, Metsä Tissue commissioned an expansion in greaseproof paper capacity at its Düren mill, as well as new tissue paper converting lines at its Raubach and Žilina mills. Metsä Board continued to increase production, especially at the Husum mill, where a folding boxboard machine started up in 2016, and an extrusion coating line was commissioned in 2017. At the Kaskinen high-yield pulp mill, production levels rose by 10 per cent following an investment in increasing the pulp drying capacity.
In addition to developing its current business operations in 2018, Metsä Group strengthened its efforts in promoting new opportunities in the bioeconomy. In May, Metsä Group established the innovation company Metsä Spring. The new company acts as developer and venture capital in new product industrialisation projects. The first project company was established to build a new textile fibre pilot plant in Äänekoski with Itochu Corporation.
SIGNIFICANT GROWTH IN OUR WOOD SOURCING
As a result of our investment programme, our annual use of wood has increased by roughly five million cubic metres. This increase concerns both timber logs and pulpwood. Maintaining balance in converting different wood fractions is vital for Finnish forestry and its profitability. Markets must direct each wood fraction to the use that yields the most added value.
Wood trade in Finland has been brisk, with our owner-members especially active and responding to growing demand. Prices of all wood grades saw an increase in 2018 because of strong demand.
Forest owners have continued to actively adopt our digital services. In 2018, more than a third of wood trade and an even higher proportion of orders for forest management were made through digital channels. The users of our Metsäverkko service gain access to a virtual forest application that enables them to view their forests and the required actions at any time or place.
METSÄ GROUP CONTINUES ACTIVE DEVELOPMENT WORK
After a stable and favourable economic period, the markets began to exhibit uncertainty and weakening demand at the end of the year. This was at least partly due to the increase in international trade obstacles. However, demand for business areas’ products continues to show an increasing long term trend as demand for renewable materials grows, and economic growth and urbanisation in developing economies progress.
Metsä Group is in a stable economic position, enabling us to continue with our development projects without interruption from market fluctuations. I took up the position of CEO of the Group’s parent company, Metsäliitto Cooperative, at the beginning of 2018, and the position of President and CEO of the Group on 1 April 2018. Under my predecessor, Kari Jordan, Metsä Group developed into a strong company and a major global player in the forest industry. All 9,300 of us at Metsä Group want to continue this development as an innovative and sustainable player. Our roots are in Finnish forests, and our competitors and customers are all over the world. With our stakeholders, we will be successful in this task.
Ilkka Hämälä
President and CEO
