Production and demand for Finnish forest products will continue to decline in the coming years

   Moscow. May 28, 2009. /Lesprom Network/. The Finnish Forest Research Institute (Metla) said that the contraction of the country's wood-processing industry had only just begun, with paper output projected to shrink by a third by 2020 from the level seen in 2007, as Newsroom Finland informed Lesprom Network.

Antro Säilä of the Finnish Forest Industries' Federation described the outlook as an "extreme" contingency that could come to pass only if the companies and the government did nothing to secure the future of the industry.

"We are talking about a horror scenario that sets off from very pessimistic premises," Mr Säilä said.

"I think it is important to stress that this will happen only if nothing is done."

But he added that the forecast should be taken seriously all the same and urged the government not to raise the industry's tax burden. Matti Vanhanen, the Finnish prime minister, said he hoped the Finnish wood-processing industry would remain competitive thanks to demand for bioenergy as well as new ways of using wood. He added that the EU's targets to raise the share of renewable energy would help.

"A single biodiesel facility easily uses two to three million cubic metres [of wood] a year," Mr Vanhanen said.

The prime minister added that Finland could make biofuel to cover its own as well as other EU countries' needs.

"It has to be produced somewhere, and I think Finland has good prerequisites for it."

Mr Vanhanen said he was confident that future demand for wood in construction would be higher than that forecast by Metla.