Forest Products Industry

US President Donald Trump announced he’s directing his administration to investigate imports of furniture into the United States that will lead to higher tariffs by October. Source: CNN “Within the next 50 days, that Investigation will be completed, and furniture coming from other countries into the United States will be tariffed at a rate yet to be determined,” Trump wrote in a Truth Social post. “This will bring the furniture business back to North Carolina, South Carolina, Michigan, and States all across the Union,” he said. The investigation comes as the Trump administration is mulling higher tariff levels on imported goods such as copper, semiconductors and pharmaceuticals. Already, furniture prices have been increasing over the past few months as Trump hiked tariffs on countries including China and Vietnam, the top two sources of imported furniture. Both countries imported US$12 billion worth of furniture and fixtures last year, according to US Commerce Department data. Furniture and bedding prices, an overarching category the Consumer Price Index tracks, rose 0.4% in June and 0.9% in July after prices had been largely deflationary for the past two and a half years. Other furniture, including office, recreation and patio, saw the biggest spikes since May. Prices were up 1.5% in May, 1.6% in June and 1.5% in July. Like most goods, these categories were seeing prices fall by that much on a monthly basis, if not more, following the unravelling of pandemic nesting trends. Furniture stocks, such as Wayfair, William-Sonoma and Restoration Hardware, all tanked in after-hours trading Friday evening following a big day of gains across the stock market after Federal Reserve Chair Jerome Powell opened up the door to an interest rate cut.

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Finland’s Koskisen Corporation, whose main business is in sawn timber and panels, maintained its position as the strongest performer with remarkable growth, achieving a 24.3% year-on-year increase in revenue to €176.0 million (US$205.5 million). The company’s sawn timber segment was particularly strong, with revenue growing 47.2% to €96.2 million in the first half of 2024. Source: Fastmarkets Koskisen’s sawmill production reached record levels, and the strategic acquisition of Iisveden Metsä’s business in June expanded sawmill capacity by approximately 35%. “The positive development of the sawn timber industry segment continued,” said chief executive officer Jukka Pahta, though acknowledging that current raw materials prices are “not sustainable from the point of view of the profitability of the industry.” Sweden’s SCA demonstrated remarkable resilience with net sales increasing 7% to 10.5 billion Swedish krona (€932 million) and maintaining an impressive EBITDA margin of 34.9% at SEK 3.7 billion. The company’s high degree of self-sufficiency in wood raw materials, energy and logistics proved crucial in maintaining strong profitability against rising input costs. SCA’s wood segment delivered particularly robust performance with net sales increasing 24% to SEK 3.2 billion and EBITDA growing 35% to SEK 546 million, supported by higher selling prices and delivery volumes of 1,092,000 cubic meters (up by 19% year-on-year). The Finnish and Swedish company Stora Enso delivered solid performance with sales increasing approximately 5% and maintaining operational stability despite volatile market conditions. The company reached a major milestone with an agreement to divest approximately 175,000 hectares of forest land (equivalent to 12.4% of total forest holdings in Sweden) for an enterprise value of approximately €900 million. “While market conditions remained challenging, we focused on the areas within our control – enhancing sourcing, operational efficiency, commercial excellence, working capital, and fixed costs,” CEO Hans Sohlström said. The Swedish company Södra faced the most significant challenges among the six Nordic companies, posting an operating loss of SEK 389 million in the second quarter of 2025 compared to a profit of SEK 398 million in the same quarter last year. Net sales declined 4% to SEK 7.2 billion for the quarter, with results severely impacted by exchange rate effects of over SEK 580 million and scheduled maintenance shutdowns costing approximately SEK 240 million. “The second quarter was challenging for Södra. Increased global uncertainty, combined with rapid currency fluctuations and high raw materials prices, has created a triple external effect that puts pressure on our profitability,” President and CEO Lotta Lyrå said. In response, Södra initiated a comprehensive action program to strengthen competitiveness and profitability. Finland’s UPM reported 2025 first-half sales of €5.05 billion (down 3% year-on-year) with comparable EBIT decreasing 20% to €413 million, facing significant adversity from global trade tensions. “Tariff announcements caused uncertainty in global trade, which weakened demand and the US dollar. These had a negative impact, particularly on the pulp and communication paper businesses,” CEO Massimo Reynaudo said. The company’s advanced materials businesses showed greater resilience, though pulp operations were indirectly impacted by escalating trade tensions, particularly affecting Chinese demand. Another Finnish forest major, Metsä Group, struggled with a challenging first half, reporting sales of €3.07 billion (up by 4.5% year-on-year) but seeing comparable operating results decline to €44 million from €57 million. “Higher costs – especially higher wood raw materials prices – weakened the profitability of all business operations,” President and CEO Jussi Vanhanen said. The company has initiated a €300 million cost savings and profit improvement program to address these challenges. The sawn timber divisions across these Nordic companies demonstrated the sector’s resilience despite significant cost pressures, with most achieving volume growth even as margins came under strain. Koskisen led the sector with exceptional sawn timber performance, delivering 197,200 cubic meters (up by 41.4% year-on-year) in the first half of 2025. The company’s new sawmill in Järvelä, southern Finland, continued its ramp-up toward the target of 450,000 cubic meters annual capacity, while the June acquisition of Iisveden Metsä added approximately 140,000 cubic meters of annual spruce sawn timber production. Despite challenging market conditions, Koskisen maintained strong customer relationships and benefited from market-specific product concepts, achieving significant improvements in shift-specific production and operational indicators. Södra’s wood division experienced the most severe challenges, with operating profit collapsing to SEK 3 million from SEK 128 million in the second quarter of 2024. The division was heavily impacted by significantly higher saw log costs, though the company achieved some recovery through higher delivery prices and maintained positive developments in its CLT (cross-laminated timber) business. Despite the weak construction market, Södra’s CLT operations showed increased sales and production, reflecting the growing proportion of timber used in construction applications. SCA’s wood segment delivered robust volume growth with strong operational performance, benefiting from its strategically located sawmills close to forest holdings in Northern Sweden. Across the sector, several consistent patterns have emerged. High raw materials costs continue to pressure margins universally, with multiple companies stating that current wood prices are unsustainable for long-term industry profitability. Companies with integrated value chains demonstrated significantly greater resilience in this challenging environment. Global trade tensions and increasing tariffs have created substantial market uncertainty, while currency volatility – particularly the rapid strengthening of SEK against USD – has severely impacted export-oriented operations. Operational efficiency has become a critical focus area for all companies, with many implementing comprehensive cost reduction and competitiveness programs. Strategic investments made in previous years are beginning to show positive returns, such as UPM’s biochemicals refinery in Leuna, Germany, Stora Enso’s new packaging line in Oulu, Finland, and Koskisen’s new sawmill in Järvelä. However, scheduled maintenance shutdowns have had more significant negative impacts than in previous years, with Södra experiencing approximately SEK 240 million in costs from two major shutdowns. Market conditions vary significantly by segment and region, with construction sector weakness continuing to affect traditional sawn timber demand, while value-added products and export markets provided some offset. The CLT segment showed particular promise, with both Koskisen and Södra reporting positive developments despite overall market challenges. The industry outlook for the remainder of 2025 remains cautiously managed, […]

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PEFC has released a new informative clarification document to help non-EU based PEFC chain of custody certified organisations meet the requirements of the PEFC EUDR Due Diligence System (DDS) Standard (PEFC ST 2002-1:2024). Source: Timberbiz This standard was developed to support PEFC chain of custody certified companies in aligning with the EU Regulation on Deforestation-Free Products (EUDR), which came into force in June 2023 to prevent deforestation and forest degradation. Covering key commodities such as timber, natural rubber, coffee, soy, cocoa, palm oil, cattle, and their derivatives, the EUDR requires that products be deforestation-free and legally produced before entering the EU market. The PEFC EUDR DDS standard differentiates requirements for EU based and non-EU based companies. This informative resource clarifies the PEFC EUDR DDS requirements applicable to non-EU based companies. Some non-EU based businesses may assume the EUDR does not apply to them. In reality, if your products or materials are destined for the EU market – even via distributors or customers – you play a critical role in ensuring compliance. Without proper due diligence in place, your EU buyers may not be able to purchase from you, risking the loss of valuable market access. The PEFC EUDR DDS module standard is designed specifically to help both EU and non-EU based companies meet the regulation’s demands. By using it, non-EU based companies can: Demonstrate the alignment of their products to EUDR requirements for deforestation-free and legal production. Support EU customers in meeting their legal obligations. Safeguard and grow market opportunities in one of the world’s largest trading blocs. The clarification document helps non-EU based companies identify the PEFC EUDR DDS requirements that apply to them, including: Establishing a management system to meet PEFC EUDR DDS requirements. Identifying inputs and declaring outputs with the PEFC-EUDR claim. Collecting key EUDR data such as geolocation of harvest plots and evidence of deforestation free and legal compliance. Conducting risk assessments and applying mitigation measures where needed. Responding to substantiated concerns quickly and effectively. No placement on the market of products that do not meet EUDR or PEFC requirements. For most non-EU based companies, there is no need to submit due diligence statements to the EU’s TRACES system unless they are directly importing into the EU and responsible for customs declarations. The PEFC EUDR DDS integrates with the existing PEFC Chain of Custody standard, making it straightforward to implement. By adopting it, non-EU based companies show leadership in sustainability, commitment to deforestation free, and strengthen relationships with EU buyers, while helping them ensure their products continue to flow into the EU market without disruption. “EUDR compliance starts long before a product reaches Europe. This new publication gives non-EU based companies a clear view of the PEFC EUDR DDS standard requirements applicable to them, helping them keep their place in the EU supply chain through using PEFC scheme” said Marta Martinez Pardo, Standards and Integrity Senior Manager at PEFC International. Download: SIMPLIFYING COMPLIANCE: THE BENEFITS OF THE PEFC EUDR DDS Download: Responsibilities of non-EU based PEFC chain of custody certified organisations in implementing the PEFC EUDR DDS standard (Informative)  

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Agri Investor reported last week that UK company Gresham House is developing an international forestry strategy that could see a large investment in Australia and New Zealand. Source: Timberbiz According to Agri Investor around 40% would be allocated to Australasia as the company aims to expand its global footprint in the timber industry which includes afforestation and carbon projects. This comes off the back of Australia’s Nature Repair Market which is a voluntary national market that enables people to take action to restore and protect the environment. The scheme establishes a marketplace where individuals and organisations can undertake nature repair projects and attract investors. Projects under the Nature Repair Market encourage land management practices that improve biodiversity. These projects could include: planting trees on farmland re-establishing vegetation along waterways protecting and managing existing habitat or native vegetation. The Nature Repair Market allows investors to earn biodiversity credits for these projects.

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The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) is celebrating a milestone of 80 years of operations. Source: Timberbiz Recognised for its independent and authoritative analysis that has supported the growth and sustainability of Australia’s agricultural and resource sectors, the bureau first came into being on 21 August 1945. Originally known as the Bureau of Agricultural Economics, one of its first functions was to “investigate the economic prospects of primary industries with particular reference to efficiency factors”. The bureau has been through a series of mergers, most recently with the Bureau of Rural Sciences in 2010, bringing with it the capacity to undertake integrated economic, scientific and social science research. ABARES’s functions have ranged from shaping Australia’s post-war agriculture policies to addressing contemporary challenges like climate change, sustainability and biosecurity issues. ABARES Executive Director Dr Jared Greenville said the bureau had made a significant contribution to decisions on structural reform, trade, and natural resource management. “Since we began, ABARES’ aim has been to provide professionally independent economic analysis and advice on agricultural policies – a mission that has remained at our core,” Dr Greenville said. “A key activity of ABARES has been our farm surveys program, which expanded in 1971 to cover broadacre and dairy industries on an annual basis. “The support of Australian farmers who volunteer their time and provide their data each year has been critical to the success of the farm surveys.”

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