Forest investments - Strong long-term demand for wood in Finland

For more than 300 years, the export of forest industry products has been a cornerstone of Finland’s national economy.

Despite extensive utilization, Finland’s timber reserves have grown by approximately 70 percent over the past 50 years. While tar dominated exports in the 18th century, the future belongs to products that store carbon for as long as possible throughout their lifecycle.

Private Forests: The Backbone of Supply

Private forests provide around 70 percent of the raw wood required by Finland’s forest industry. With over half a million private forest owners, forestry remains deeply rooted in Finnish family traditions. Mikko Söderling, Managing Director of Skogssällskapet Finland, believes this will continue:

“Finland’s forests are in the best possible care when owned by either an active private owner or an institutional investor. Current growth can even be increased if necessary maintenance work is done on time.”

Forest investment is well suited for investors with a long-term perspective. Söderling highlights Finland’s transparency in official operations as a key advantage. Unlike in many other countries, Finnish forest owners have access to high-quality, up-to-date, and free information about their forests and their potential.

Today, Finland’s forest and woodworking industries process timber into diverse products at roughly 150 facilities nationwide. Söderling stresses the importance of having multiple regional buyers for raw wood:

“It’s not wise to rely on a single option for wood sales. Independent sawmills, especially those not dependent on large processors, are crucial to ensuring forest owners receive the best possible compensation. Russia’s invasion of Ukraine in 2022, combined with extensive bark beetle damage in Sweden and Germany, disrupted wood supply around the Baltic Sea. In Finland, this led to a sharp rise in domestic wood prices.”

Strong Political Support for Forestry

The principle established in Finnish forest law back in 1885 — “a forest shall not be destroyed to clear land”—continues to guide forestry practices today.

“The position of wood-processing industry has always been strong in Finland. Political decision-makers have committed across parliamentary terms to promoting good forest management,” Söderling says. “Forest policy is no longer solely in national hands, so communicating its special characteristics to the EU is important.”

Ecological and social sustainability now stand alongside economic considerations in Finnish forest legislation. According to Söderling, these perspectives complement each other: areas with high recreational or natural value can coexist with economic use.

“About half of the forests we manage for our clients are FSC-certified, ensuring better prices for their timber. The rest are certified under the PEFC system. The client always decides which certificate to apply for their forests.”

Skogssällskapet: Driving Research and Innovation for the Future

Finnish forest research has also a long and valuable tradition. Skogssällskapet annually invests about €2 million in forest and nature research in Finland and Sweden. Preparing for climate change is becoming an increasingly critical research theme. The Skogssällskapet-foundation owns approximately 7,000 hectares of forest in Finland, mostly in the south.

“Our lands host extensive research and experimental activities. Increasing bark beetle damage and other climate-related factors pose major risks. Our preparation includes, for instance, growing multiple tree species on the same hectares and considering site conditions from a long-term standpoint—thinking about what the situation will be in 30–50 years,” Söderling explains.

Text: Martti Linna