ACPWP97 THE STATE OF THE INDUSTRY - SWEDEN
April 1997 FO: ACPWP 97/2

ADVISORY COMMITTEE ON PAPER AND WOOD PRODUCTS

THIRTY-EIGHTH SESSION

Rome, 23 - 25 April 1997

THE STATE OF THE INDUSTRY


SWEDEN

General Economic Situation

The weakening of the economic activity, that started during the second half of 1995, continued in 1996. Stocks were reduced in the industry and in the distribution chain, and stock reduction seems to have contributed negatively to GDP with one percentage point. Industry production slowed down considerably, from an increase of 10 percent in 1995 to 1 percent in 1996. Investments showed a strong increase for the whole year, 7 percent, but slowed down during the course of the year, as a three-year investment cycle is nearing its end.

The inflation rate continued to decrease to a record low and is one of the lowest in Europe. Both long- and short-term interest rates continued to decrease. The unemployment continues to be a major problem, and the unemployment rate is considered to be only marginally reduced during the next few years. The budget deficit in the public sector has been considerably reduced.

Key Indicators, Percentage Change

1995 19961997 prognosis
GDP3.6 1.2
2.0
Consumer prices2.9 0.8
1.0
Open unemployment7.7 7.9
7.0
Current account balance, in percentage of GDP 2.12.6
4.0

Performance of the Pulp and Paper Industry

The Swedish production of paper and board decreased in 1996 for the second consecutive year and amounted to 9 million tonnes, a decrease by 125 000 tonnes or 1 percent. The capacity utilisation fell to 90 percent. Exports decreased marginally, by 0.5 percent and amounted to 7.3 million tonnes. Deliveries to the EU countries fell by 2 percent and reached 5.7 million tonnes. Deliveries to Eastern European countries increased strongly but are still at low levels, and also exports to Asia increased. Deliveries to the home market decreased by 3 percent. For further details see the statistics attached.

The Swedish exports of pulp increased by 2 percent. Producers' inventories were reduced in the first half year, but showed again an increase towards the end of the year. See also the statistics attached.

Recovered Paper

The consumption of recovered paper at paper and board mills increased by 5 percent to 1.5 million tonnes in 1996. This resulted in an increase of the utilization rate to 16.7 percent compared to 15.6 percent the year before. The collection of recovered paper has been calculated to 1.1 million tonnes corresponding to a recovery rate of about 55 percent. The availability of recovered paper was good during the year.

A new de-inking line with a yearly capacity of 140 000 tonnes of newpapers and magazines started up in May 1996.

Raw Material Availability 1996-1997

Both the sawmill industry and the pulp and paper industry experienced high raw material availability during most of 1996. The situation for the sawmills, however, changed during the third quarter, when sawmills in some regions started to experience timber shortage. Price raises during the fourth quarter for saw timber have improved the situation, and at present there is a good availability for raw material for both sawmills and pulpmills.

Investment and Capacity in the Pulp and Paper Industry

Investments in the pulp and paper industry in Sweden reached 12 billion SEK in 1996 and are predicted to reach 9 billion SEK in 1997.

According to preliminary figures in the most recent capacity survey, paper and board capacity will increase by 500 000 tonnes to 10.5 million tonnes in 1997. A new machine for the production of liquid board has recently started up, and the capacity figures also reflects the new machines for LWC and newsprint that started up in 1996. Investments also concern improved quality standard of pulp and paper, rebuilds of wood-handling and of the bleaching process in the pulp mills and other environmental measures. Market pulp capacity will increase by 100 000 tonnes to 3.9 million tonnes in 1997.

Issues of Particular Interest

Progress in Sustainable Forest Management (SFM) also in Relation to Certification

Swedish forestry has gone through some major changes during the last decade. All forest companies have introduced ambitious environmental programmes to be able to practise forestry without jeopardising the biological diversity. Sustainable forest management is today not only a question of sustainable yield, but also of ecological sustainability. Some steps towards sustainability that have been taken are: site-adaptation, day-to-day conservation and ecological landscape planning.

The Swedish forest industry looks upon certification as a way to verify, and get credit for, the environmentally friendly methods that already have been, and will be, introduced.

The Swedish forest industry is involved in the certification issue at three different levels:

International

The industry participates in the ISO Working Group (ISO/TC207/WG2 on Forestry). The groups mission is to create a linkage between national certification standards and ISO 14000. The Swedish forest industry believes that a nationally-developed certification standard within the Forest Stewardship Council (FSC) framework could be very well linked to the ISO environmental management system. Therefore, FSC and ISO are complementary, and do not exclude each other.

Nordic

The Nordic Certification Project is a cooperation between the forest industry and the forest owners in Sweden, Finland and Norway. The aim of the project is to share information and experiences from the national certification initiatives which now take place in the Nordic countries, and to harmonise the national work as much as possible.

National

A Swedish FSC Working Group was formed in February 1996. Economic, environmental and social interests participate in the work. All relevant stakeholders have decided to take part in the work. The Swedish forest industry is also an active part in the discussion. The Working Group plans to propose a national standard during the spring of 1997. The proposals should be developed in consensus.

The Socio-Economic Dimension of SFM and Wood Processing

Sweden has a long tradition of a good relations between employers, employees and indigenous people. Most potential conflicts have been settled a long time ago. In some cases, the parties have opposing interests, such as wages, etc. These questions are, however, settled in regular negotiations each year.

The remaining questions regarding the socio-economic dimension of SFM will be discussed and handled within the Swedish FSC Working Group.

Sustainability of Fibre Supply

The annual timber harvest has, throughout the whole century, been far below the annual increment. At present, only 70 percent of the yield will be harvested. The Swedish fibre supply is therefore sustainable indeed.

Paper and Board Statistics, 1996
Production 1996 1995 Change in 1996 1995 Change in
thousand tonnes Q4 Q4% 96/95 Acc Acc% 96/95
Newsprint 580 5613.4% 2283 2345 -2.6%
Woodfree printing and writing 390 30328.8% 1418 1394 1.7%
Wood-containing printing and writing 204 15531.9% 752 65215.3%
Tissue 76 79-3.6% 297 2931.5%
Wrapping papers 206 260-20.7% 880 1082 -18.7%
Kraft paper 200 254-21.2% 858 1057 -18.8%
Folding boxboards 319 28511.9% 1345 1358 -0.9%
Case materials 475 40417.6% 1910 1904 0.3%
Kraft liner 381 31321.9% 1506 1491 1.0%
Others 35 36-2.6% 132 140-5.7%
Total paper and board 2286 2083 9.7% 9018 9169 -1.6%
Total deliveries 1996 1995 Change in 1996 1995 Change in
thousand tonnes Q4 Q4% 96/95 Acc Acc% 96/95
Newsprint 615 5806.0% 2252 2350 -4.2%
Woodfree printing and writing 373 29725.5% 1422 1377 3.3%
Wood-containing printing and writing 204 17715.4% 722 7150.9%
Tissue 68 672.3% 272 279-2.5%
Wrapping papers 189 239-21.1% 811 988-17.9%
Kraft paper 182 232-21.2% 790 962-18.0%
Folding boxboards 322 28214.0% 1318 1281 2.9%
Case materials 464 39218.4% 1932 1826 5.8%
Kraft liner 364 30419.8% 1514 1424 6.3%
Others 33 323.1% 129 132-2.6%
Total paper and board 2267 2066 9.8% 8858 8948 -1.0%
Exports 1996 1995 Change in 1996 1995 Change in
thousand tonnes Q4 Q4% 96/95 Acc Acc% 96/95
Newsprint 512 46310.6% 1862 1929 -3.5%
Woodfree printing and writing 305 23231.4% 1162 1118 4.0%
Wood-containing printing and writing 164 13720.3% 594 5694.3%
Tissue 39 366.8% 152 1464.3%
Wrapping papers 167 215-22.4% 723 891-18.9%
Kraft paper 162 209-22.7% 704 869-19.0%
Folding boxboards 265 22717.1% 1068 1037 3.0%
Case materials 389 32420.1% 1614 1524 5.9%
Kraft liner 326 27120.2% 1356 1272 6.6%
Others 26 248.6% 101 1000.9%
Total paper and board 1869 1658 12.7% 7275 7315 -0.5%
Domestic deliveries 1996 1995 Change in 1996 1995 Change in
thousand tonnes Q4 Q4% 96/95 Acc Acc% 96/95
Newsprint 102 117-12.3% 390 420-7.3%
Woodfree printing and writing 68 654.3% 260 2590.3%
Wood-containing printing and writing 39 40-1.3% 128 146-12.2%
Tissue 30 31-3.1% 119 133-10.1%
Wrapping papers 21 23-9.1% 89 97-8.9%
Kraft paper 21 22-7.2% 86 93-7.9%
Folding boxboards 56 551.5% 250 2442.7%
Case materials 76 6910.5% 318 3015.4%
Kraft liner 38 3315.9% 158 1524.0%
Others 7 8-14.0% 28 32-13.1%
Total paper and board 399 407-2.0% 1583 1634 -3.1%
Deliveries per destination 1996 1995 Change in 1996 1995 Change in
thousand tonnes Q4 Q4% 96/95 Acc Acc% 96/95
EC, excl. Sweden 1443 1306 10.5% 5716 5827 -1.9%
United Kingdom 364 334 9.0% 1429 1466 -2.5%
Germany 345 332 4.0% 1429 1475 -3.1%
France 146 126 16.2% 604 621-2.8%
Italy 101 102 -1.1% 432 482-10.5%
Other West Europe 116 100 16.1% 446 4089.2%
North America 21 31-32.1% 83 135-38.5%
Asia 165 114 44.7% 616 52916.3%
Other countries 124 108 15.3% 414 415-0.1%
Total exports 1869 1659 12.7% 7275 7315 -0.5%
Domestic 399 407 -2.0% 1583 1634 -3.1%
Total Deliveries 2268 2066 9.8% 8858 8948 -1.0%

Swedish Forest Industries Association, March 1996.

Market Pulp Statistics, 1996
Market pulp
PRODUCTION Q4 Q4Change Cumul. Cumul. Change
thousand tonnes 1996 1995 96/95 % 1996 1995 96/95 %
TOTAL 820 71914.2 3136 3324 -5.7
of which
Mechanical pulp 78 90-13.0 328 412-20.4
White pulp 709 60317.6 2679 2781 -3.7
EXPORTS Q4 Q4Change Cumul. Cumul. Change
thousand tonnes 1996 1995 96/95 % 1996 1995 96/95 %
TOTAL 617 51619.7 2628 2587 1.6
of which
Mechanical pulp 48 59-19.6 219 272-19.3
White pulp 546 43924.3 2292 2213 3.6
DELIVERIES OF Q4 Q4Change Cumul. Cumul. Change
WHITE PULP 1996 1995 96/95 % 1996 1995 96/95 %
thousand tonnes
EU excl. Nordic 444 36621.2 1885 1893 -0.4
of which
Germany 190 15422.9 792 7762.1
France 85 6041.9 338 3302.3
Netherlands 30 2145.8 118 1097.6
Italy 39 3030.0 183 188-3.0
W Europe excl. Nordic 465 37723.4 1963 1961 0.1
Finland+Norway 28 2131.4 103 1011.8
E. Europe 27 1759.6 110 8431.4
Asia 21 1453.6 78 38107.4
North America 3 7-61.6 22 1731.1
Other countries 2 4-36.4 15 1226.0
TOTAL EXPORTS 546 43924.3 2292 2213 3.6
Domestic 129 8747.6 458 4199.2
TOTAL DELIVERIES 675 52728.2 2750 2632 4.5

White pulp = bleached sulphate, unbleached and bleached sulphite.

Swedish Forest Industries Association, March 1996.
















SWEDEN

General Economic Situation

The weakening of the economic activity, that started during the second half of 1995, continued in 1996. Stocks were reduced in the industry and in the distribution chain, and stock reduction seems to have contributed negatively to GDP with one percentage point. Industry production slowed down considerably, from an increase of 10 percent in 1995 to 1 percent in 1996. Investments showed a strong increase for the whole year, 7 percent, but slowed down during the course of the year, as a three-year investment cycle is nearing its end.

The inflation rate continued to decrease to a record low and is one of the lowest in Europe. Both long- and short-term interest rates continued to decrease. The unemployment continues to be a major problem, and the unemployment rate is considered to be only marginally reduced during the next few years. The budget deficit in the public sector has been considerably reduced.

Key Indicators, Percentage Change

1995 19961997 prognosis
GDP3.6 1.2
2.0
Consumer prices2.9 0.8
1.0
Open unemployment7.7 7.9
7.0
Current account balance, in percentage of GDP 2.12.6
4.0

Performance of the Pulp and Paper Industry

The Swedish production of paper and board decreased in 1996 for the second consecutive year and amounted to 9 million tonnes, a decrease by 125 000 tonnes or 1 percent. The capacity utilisation fell to 90 percent. Exports decreased marginally, by 0.5 percent and amounted to 7.3 million tonnes. Deliveries to the EU countries fell by 2 percent and reached 5.7 million tonnes. Deliveries to Eastern European countries increased strongly but are still at low levels, and also exports to Asia increased. Deliveries to the home market decreased by 3 percent. For further details see the statistics attached.

The Swedish exports of pulp increased by 2 percent. Producers' inventories were reduced in the first half year, but showed again an increase towards the end of the year. See also the statistics attached.

Recovered Paper

The consumption of recovered paper at paper and board mills increased by 5 percent to 1.5 million tonnes in 1996. This resulted in an increase of the utilization rate to 16.7 percent compared to 15.6 percent the year before. The collection of recovered paper has been calculated to 1.1 million tonnes corresponding to a recovery rate of about 55 percent. The availability of recovered paper was good during the year.

A new de-inking line with a yearly capacity of 140 000 tonnes of newpapers and magazines started up in May 1996.

Raw Material Availability 1996-1997

Both the sawmill industry and the pulp and paper industry experienced high raw material availability during most of 1996. The situation for the sawmills, however, changed during the third quarter, when sawmills in some regions started to experience timber shortage. Price raises during the fourth quarter for saw timber have improved the situation, and at present there is a good availability for raw material for both sawmills and pulpmills.

Investment and Capacity in the Pulp and Paper Industry

Investments in the pulp and paper industry in Sweden reached 12 billion SEK in 1996 and are predicted to reach 9 billion SEK in 1997.

According to preliminary figures in the most recent capacity survey, paper and board capacity will increase by 500 000 tonnes to 10.5 million tonnes in 1997. A new machine for the production of liquid board has recently started up, and the capacity figures also reflects the new machines for LWC and newsprint that started up in 1996. Investments also concern improved quality standard of pulp and paper, rebuilds of wood-handling and of the bleaching process in the pulp mills and other environmental measures. Market pulp capacity will increase by 100 000 tonnes to 3.9 million tonnes in 1997.

Issues of Particular Interest

Progress in Sustainable Forest Management (SFM) also in Relation to Certification

Swedish forestry has gone through some major changes during the last decade. All forest companies have introduced ambitious environmental programmes to be able to practise forestry without jeopardising the biological diversity. Sustainable forest management is today not only a question of sustainable yield, but also of ecological sustainability. Some steps towards sustainability that have been taken are: site-adaptation, day-to-day conservation and ecological landscape planning.

The Swedish forest industry looks upon certification as a way to verify, and get credit for, the environmentally friendly methods that already have been, and will be, introduced.

The Swedish forest industry is involved in the certification issue at three different levels:

International

The industry participates in the ISO Working Group (ISO/TC207/WG2 on Forestry). The groups mission is to create a linkage between national certification standards and ISO 14000. The Swedish forest industry believes that a nationally-developed certification standard within the Forest Stewardship Council (FSC) framework could be very well linked to the ISO environmental management system. Therefore, FSC and ISO are complementary, and do not exclude each other.

Nordic

The Nordic Certification Project is a cooperation between the forest industry and the forest owners in Sweden, Finland and Norway. The aim of the project is to share information and experiences from the national certification initiatives which now take place in the Nordic countries, and to harmonise the national work as much as possible.

National

A Swedish FSC Working Group was formed in February 1996. Economic, environmental and social interests participate in the work. All relevant stakeholders have decided to take part in the work. The Swedish forest industry is also an active part in the discussion. The Working Group plans to propose a national standard during the spring of 1997. The proposals should be developed in consensus.

The Socio-Economic Dimension of SFM and Wood Processing

Sweden has a long tradition of a good relations between employers, employees and indigenous people. Most potential conflicts have been settled a long time ago. In some cases, the parties have opposing interests, such as wages, etc. These questions are, however, settled in regular negotiations each year.

The remaining questions regarding the socio-economic dimension of SFM will be discussed and handled within the Swedish FSC Working Group.

Sustainability of Fibre Supply

The annual timber harvest has, throughout the whole century, been far below the annual increment. At present, only 70 percent of the yield will be harvested. The Swedish fibre supply is therefore sustainable indeed.

Paper and Board Statistics, 1996
Production 1996 1995 Change in 1996 1995 Change in
thousand tonnes Q4 Q4% 96/95 Acc Acc% 96/95
Newsprint 580 5613.4% 2283 2345 -2.6%
Woodfree printing and writing 390 30328.8% 1418 1394 1.7%
Wood-containing printing and writing 204 15531.9% 752 65215.3%
Tissue 76 79-3.6% 297 2931.5%
Wrapping papers 206 260-20.7% 880 1082 -18.7%
Kraft paper 200 254-21.2% 858 1057 -18.8%
Folding boxboards 319 28511.9% 1345 1358 -0.9%
Case materials 475 40417.6% 1910 1904 0.3%
Kraft liner 381 31321.9% 1506 1491 1.0%
Others 35 36-2.6% 132 140-5.7%
Total paper and board 2286 2083 9.7% 9018 9169 -1.6%
Total deliveries 1996 1995 Change in 1996 1995 Change in
thousand tonnes Q4 Q4% 96/95 Acc Acc% 96/95
Newsprint 615 5806.0% 2252 2350 -4.2%
Woodfree printing and writing 373 29725.5% 1422 1377 3.3%
Wood-containing printing and writing 204 17715.4% 722 7150.9%
Tissue 68 672.3% 272 279-2.5%
Wrapping papers 189 239-21.1% 811 988-17.9%
Kraft paper 182 232-21.2% 790 962-18.0%
Folding boxboards 322 28214.0% 1318 1281 2.9%
Case materials 464 39218.4% 1932 1826 5.8%
Kraft liner 364 30419.8% 1514 1424 6.3%
Others 33 323.1% 129 132-2.6%
Total paper and board 2267 2066 9.8% 8858 8948 -1.0%
Exports 1996 1995 Change in 1996 1995 Change in
thousand tonnes Q4 Q4% 96/95 Acc Acc% 96/95
Newsprint 512 46310.6% 1862 1929 -3.5%
Woodfree printing and writing 305 23231.4% 1162 1118 4.0%
Wood-containing printing and writing 164 13720.3% 594 5694.3%
Tissue 39 366.8% 152 1464.3%
Wrapping papers 167 215-22.4% 723 891-18.9%
Kraft paper 162 209-22.7% 704 869-19.0%
Folding boxboards 265 22717.1% 1068 1037 3.0%
Case materials 389 32420.1% 1614 1524 5.9%
Kraft liner 326 27120.2% 1356 1272 6.6%
Others 26 248.6% 101 1000.9%
Total paper and board 1869 1658 12.7% 7275 7315 -0.5%
Domestic deliveries 1996 1995 Change in 1996 1995 Change in
thousand tonnes Q4 Q4% 96/95 Acc Acc% 96/95
Newsprint 102 117-12.3% 390 420-7.3%
Woodfree printing and writing 68 654.3% 260 2590.3%
Wood-containing printing and writing 39 40-1.3% 128 146-12.2%
Tissue 30 31-3.1% 119 133-10.1%
Wrapping papers 21 23-9.1% 89 97-8.9%
Kraft paper 21 22-7.2% 86 93-7.9%
Folding boxboards 56 551.5% 250 2442.7%
Case materials 76 6910.5% 318 3015.4%
Kraft liner 38 3315.9% 158 1524.0%
Others 7 8-14.0% 28 32-13.1%
Total paper and board 399 407-2.0% 1583 1634 -3.1%
Deliveries per destination 1996 1995 Change in 1996 1995 Change in
thousand tonnes Q4 Q4% 96/95 Acc Acc% 96/95
EC, excl. Sweden 1443 1306 10.5% 5716 5827 -1.9%
United Kingdom 364 334 9.0% 1429 1466 -2.5%
Germany 345 332 4.0% 1429 1475 -3.1%
France 146 126 16.2% 604 621-2.8%
Italy 101 102 -1.1% 432 482-10.5%
Other West Europe 116 100 16.1% 446 4089.2%
North America 21 31-32.1% 83 135-38.5%
Asia 165 114 44.7% 616 52916.3%
Other countries 124 108 15.3% 414 415-0.1%
Total exports 1869 1659 12.7% 7275 7315 -0.5%
Domestic 399 407 -2.0% 1583 1634 -3.1%
Total Deliveries 2268 2066 9.8% 8858 8948 -1.0%

Swedish Forest Industries Association, March 1996.







Market Pulp Statistics, 1996
Market pulp
PRODUCTION Q4 Q4Change Cumul. Cumul. Change
thousand tonnes 1996 1995 96/95 % 1996 1995 96/95 %
TOTAL 820 71914.2 3136 3324 -5.7
of which
Mechanical pulp 78 90-13.0 328 412-20.4
White pulp 709 60317.6 2679 2781 -3.7
EXPORTS Q4 Q4Change Cumul. Cumul. Change
thousand tonnes 1996 1995 96/95 % 1996 1995 96/95 %
TOTAL 617 51619.7 2628 2587 1.6
of which
Mechanical pulp 48 59-19.6 219 272-19.3
White pulp 546 43924.3 2292 2213 3.6
DELIVERIES OF Q4 Q4Change Cumul. Cumul. Change
WHITE PULP 1996 1995 96/95 % 1996 1995 96/95 %
thousand tonnes
EU excl. Nordic 444 36621.2 1885 1893 -0.4
of which
Germany 190 15422.9 792 7762.1
France 85 6041.9 338 3302.3
Netherlands 30 2145.8 118 1097.6
Italy 39 3030.0 183 188-3.0
W Europe excl. Nordic 465 37723.4 1963 1961 0.1
Finland+Norway 28 2131.4 103 1011.8
E. Europe 27 1759.6 110 8431.4
Asia 21 1453.6 78 38107.4
North America 3 7-61.6 22 1731.1
Other countries 2 4-36.4 15 1226.0
TOTAL EXPORTS 546 43924.3 2292 2213 3.6
Domestic 129 8747.6 458 4199.2
TOTAL DELIVERIES 675 52728.2 2750 2632 4.5

White pulp = bleached sulphate, unbleached and bleached sulphite.

Swedish Forest Industries Association, March 1996.


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