Metsä Forest
Metsä Wood
Metsä Fibre
Metsä Board
Metsä Tissue
1 August 2024
The first half of 2024 was financially very weak for Metsä Group. This was due to lower year-over-year sales prices, especially in pulp and paperboard, and the continued increase in wood costs. In the review period, political strikes caused a loss of EUR 60 million in operating profit. The gas explosion at the Kemi bioproduct mill’s evaporation plant reduced comparable operating profit by approximately EUR 100 million before insurance compensation. Despite the gloomy figures, positive development is seen in many of our businesses. In Europe, the pulp market was strong in the second quarter, and the price level is increasing. Demand for fresh fibre paperboards in 2024 has clearly improved from last year's record low levels. Despite the continued weak situation in the construction industry, Kerto® LVL has been at a stable and good level in terms of both price and demand. The profitability of tissue papers continues to be reasonable, but raw material prices have a significant impact on the level of results. Of all our product groups, the weak cycle now only continues in sawn timber and spruce plywood, which are directly hit by the construction industry’s muted sentiment.
In the early part of the year, we have continued our preparations for the Group’s future development. Our Kuura® textile fibre project has moved on to the next phase, in which we will explore opportunities for an industrial investment. The demo plant will continue its operations, producing raw material for textiles for the market to obtain customer feedback.
The pre-engineering project for an industrial-scale mill for moulded MuotoTM fibre-based packaging in Rauma is progressing. In the latter part of the year, our demo plant in Äänekoski will move from development activities to production for end customers, seeking to obtain product development feedback for the mill’s industrial stage. The product’s primary end use will be as a replacement for fossil-based materials in food packaging. We are also looking into the refining of lignin at the demo plant constructed in Äänekoski. Lignin can be used to replace fossil-based raw materials in many chemical industry products. The first application will be an additive used in the concrete industry. The investigation of carbon capture from the pulp industry’s combustion gases is a very extensive and significant development project. The EU’s stricter carbon capture targets for the future include a scheme for a significant volume of technologically captured carbon. Metsä Group’s potential for carbon capture exceeds 10 million tonnes annually, but the project is very challenging in terms of technology and requires legislation supporting the use of captured carbon.
The preparation and potential implementation of these large-scale development projects require Metsä Group’s existing businesses to be competitive and to create cash flow for development inputs. The markets for Metsä Group’s main products are increasing, and we have a strong position in our selected product segments. The situation in the pulp industry, extremely important for the Finnish forest industry, matches our market position as the world’s largest producer of softwood market pulp.
All Metsä Fibre’s four mills offer world-class performance in softwood pulp production, with the Kemi and Äänekoski mills in a class of their own compared to their competitors. Metsä Board’s folding boxboard industry is the market leader in its segment for demanding customer uses in both Europe and the US. The expansion of the Husum folding boxboard machine, completed last year, makes it Europe’s most efficient unit. Metsä Board has decided to modernise folding boxboard machine at Simpele board mill as part of a wider development investment programme at the mill. It will ensure the qualitative and financial competitiveness of operations far into the future. Metsä Tissue will strengthen its position as the leading Nordic tissue paper producer thanks to the new production line in Mariestad and the Mänttä mill development programme. The ongoing mill investment in Äänekoski will significantly increase the volume and production efficiency of Kerto® LVL, which is in strong demand.
Metsä Group’s short- and long-term industrial development measures focus on higher value-added and strengthen industrial competitiveness. Everything is based on Finnish commercial forests – both now and in the future. Sustainable forestry development work that pays attention to the ecological, economic and social balance must be continued actively, openly and persistently. The success of Finnish forestry and forest industry plays an important role in safeguarding our national wellbeing. Around a third of the net earnings from Finnish goods exports is generated by the forest industry, which uses Finnish raw materials and work. The cash flows from export earnings are channelled through many routes into building wellbeing for Finnish society.
Ilkka Hämälä
President and CEO
Metsä Group
