Finland’s wood product exports to China remain undented with one all-important sector, pulp, having grown despite the economic slowdown there, a leading industry body has told Asia Cargo News.

“What it looks like is that China and Asia are growing economies (and) more likely than not they will need forest industry products,” Riitta Salo, manager of information services for the Finnish Forest Industries Federation told Asia Cargo News in an interview.

One eye-catching fact is that unlike other imports, there is no evidence in the federation’s statistics of wood product sales to China slipping. Indeed, the opposite is seemingly true.

“Pulp exports from Finland have grown in recent years to Asia and to China. They have grown even this year. What China doesn’t have is a lot of forest, and that’s why it needs the pulp to make the paper,” Salo said.

Wood and wood products exports were worth some €11.65 billion (US$13 billion) and are 21.6% of Finland’s total exports, Finnish Customs reported.

Of the wood products, just under a fifth, or 18%, are Asia-bound, but those products are an important part of China’s economic development, which is the key to why they are resilient.

Statistics confirm this. Pulp, paper board and converted products make up €9.1 billion of the total forestry-related exports.

In 2005, China imported some €140 million worth of wood products, which had risen to €714 million ten years later. This gave China an enviable compound annual growth rate of 18%. No other country comes close, although countries such as South Korea, the Philippines and India had a good try with 6%, 8% and 7% in the same time frame on the same basis, respectively.

The region’s second-largest market, Japan, has been static for a decade. It imported €459 million worth of wood products in 2005 (more than three times China’s total) and €463 million worth last year. “What is not growing is Japan, not economically or in terms of forest product markets,” Salo said.

Looking ahead, the Federation outlines a mildly optimistic future, although it does point out concerns about the macro-economic environment (and more local ones, too, such as Finland’s high labour costs), as well as the digitization of media, which no longer needs the volume of newsprint it used to. Even the rise of digital photography has weakened demand for Federation products.

Balancing this, it cites subsectors where it has grounds for hope: packaging including paper boards, and tissues and hygienic papers such as sanitary towels and nappies, or diapers.

The packaging has a fairly easy explanation: consumers in emerging markets where the population is increasingly urban use it. “The more you have supermarkets, the more you have packaging,” Salo said

It’s a similar thing with tissues and hygienic papers. Asia, with large populations of young children, is an ideal market for nappies, and women in Asia are moving more to western hygiene products than traditional ones. “The more money you have, the more it’s used,” said Salo, adding that consumers also want more product lines – and better quality of the ones they have.

By Michael Mackey

Correspondent | Helsinki