European Forestry Pulse #111 🌲

Hello,

Finland's sawmills have had a hard summer. Demand is thin. Spruce is sitting unsold.

So here is a question worth asking.

If the market is this difficult, why did somebody just buy one of the country's biggest sawmills?

Here's what's moving European forestry this week:

On 31 July, the shareholders of Kuhmo Oy and Juntinsalo Oy agreed to sell.

They are selling the entire share capital of both companies.

The buyer is BINDER BETEILIGUNGS AG. That company belongs to Austria's Binderholz group.

Binderholz is one of the world's largest producers of sawn timber.

The deal still needs clearance from competition authorities.

No price was disclosed. We are not going to guess one.

Kuhmo sits on a lakeshore site in Kainuu, in eastern Finland.

It draws its logs from Kainuu and the northern part of North Karelia.

The numbers, from the company announcement:

Juntinsalo is the property company of the Kuhmo group.

Reinhard Binder chairs the Binderholz group. He explained the purchase in one sentence.

Kuhmo, he said, together with the group's existing sites at Lieksa and Nurmes, secures its demand for high-quality timber for its further processing units.

Read that again.

He did not describe buying a sawmill. He described securing a log supply.

Lieksa and Nurmes are mills Binderholz already owns. They need wood. Kuhmo's catchment delivers a million cubic metres a year, every year.

That is the asset. The saw line is how you get at it.

This is the part that looks strange from the outside.

Nordic sawmilling is in a trough. In EFP #106 we reported UPM planning a temporary shutdown at its Kaukas pulp mill. In EFP #107 we showed Finnish forest owners selling 21% less roundwood in the first half of 2026.

Thin market. Less wood coming forward. And somebody buys.

Those are answers to two different questions.

A shutdown answers "what do we run this quarter." Buying a million cubic metres of annual throughput answers "what feeds these mills for the next twenty years."

One is a demand decision. The other is a supply decision.

When wood is scarce, the scarce thing gets bought. Not the machinery.

Over 1 million cubic metres of roundwood go in. About 500,000 cubic metres of sawn timber come out.

Roughly two cubic metres of log for one of lumber. That is normal for softwood.

It also tells you what a mill this size really needs. Not a good year. A catchment that can deliver a million cubic metres, reliably, for decades.

That is a forest question, not a factory question.

If you sell logs in eastern Finland: your buyer is about to have an Austrian parent. Group buyers plan volume further ahead than standalone mills. Ask about longer supply agreements once the deal clears.

If you run a standalone sawmill: this is the competitive pressure, stated plainly. An integrated group can accept a weak quarter at one site because the fibre still earns money downstream. A single mill cannot. (Working out what that means for your own position is exactly the kind of question a ForestryBriefing answers — see below.)

If you own forest elsewhere in Europe: watch what changes hands in a downturn. Nobody is buying sawing capacity right now. They are buying access to fibre. That tells you what the market believes is genuinely short.

If you value forest assets: an undisclosed price is not a comparable. But you were given a revenue and a volume. €150 million across 500,000 cubic metres works out near €300 per cubic metre of sawn output. That is our arithmetic, not the company's disclosure. It is not a valuation. It is a starting point for better questions.

Europe's wood processors are telling you where value sits. It sits upstream, in the ground, growing. Sources: binderholz — Kuhmo Oy and Juntinsalo Oy to become part of the binderholz Group | Timber Trades Journal | Timber-Online, 5 August | Forestry Journal

The German Timber Trade Association published its half-year review on 5 August.

Turnover among participating member companies rose 6% in January to June.

June on its own was stronger. Turnover rose 17% against June last year.

By product group, June looked like this:

One caveat matters. This is reported turnover for the association's comparison group. It is not a national total. It is not a price.

Why it matters: In EFP #108 we showed Germany exporting 28% fewer softwood logs. Here is the other half of that picture. German wood is staying home because German buyers want it.

The takeaway: If you sell into Germany, the trade is buying again. If you buy German logs, expect more competition for them. Turnover is money, not volume — ask your German customers how many cubic metres actually moved. Source: GD Holz — Erste Halbjahresbilanz 2026

In EFP #81 we made Ponsse's first quarter the Big Story. Order intake rose. Operating profit fell 88.6%.

We set one test for readers. Would the order book that Q1 built convert into revenue in Q2?

Today's half-year report answers it.

Second-quarter net sales came in at €187.1 million, up from €172.3 million a year ago. The invoicing arrived. On that test, the recovery thesis holds.

Now the less comfortable part.

Q2 order intake was €179.2 million, against €177.1 million last year. Barely moved. It also sits below the €193.3 million Ponsse took in during Q1.

Guidance is unchanged for a second quarter running. Ponsse still expects 2026 operating profit close to 2025's €41.6 million.

Why it matters: The Q1 order book converted, exactly as it should have. But the order book being built underneath it is thinner. Invoicing tells you about the past. Order intake tells you about next year.

The takeaway: Ponsse passed the Q2 test we set in April. The Q3 test is a different one — watch whether order intake recovers in the autumn buying season. If you contract harvesting, expect used machine prices to stay soft into 2027. If you sell logs, your contractor is unlikely to add capacity for you. Sources: Ponsse — Interim Report 1 January – 31 March 2026 | Ponsse newsroom (Half-year Report, 11 August 2026)

On 5 August, Rayonier completed two timberland deals with Resource Management Service.

It sold about 36,000 acres in southwest Washington for $145 million.

It bought about 57,000 acres in Alabama and Texas for $146 million.

The two were structured as a like-kind exchange. The land acquired is 69% plantable, with an average site index of 75 feet.

Now do the division yourself. Washington comes out near $4,000 per acre. The southern land comes out near $2,560.

Rayonier did not publish per-acre prices. Those figures are our arithmetic, not its disclosure.

Why it matters: In EFP #109 we gave you Weyerhaeuser selling Oregon ground at roughly $9,700 per hectare. Here are two more disclosed marks, two weeks later.

The takeaway: Three real prices in three weeks, differing by more than three times. Species, rotation length, site quality and tax treatment explain most of that spread. Put all three in one row of a spreadsheet and write down why each differs. That exercise is worth more than any single number in it. Source: Rayonier — Completes Transactions to Optimize Timberland Portfolio

Find out who owns your buyer. Ten minutes.

Today's Big Story turned on a single fact. Kuhmo's logs feed mills in another country.

Most log sellers never check this.

If the answer is yes, your buyer is a supply point inside a bigger system. That changes how it behaves when markets turn. Group-owned mills can run thin margins, because the fibre still earns money somewhere else. Standalone mills cannot.

Then ask your buyer one question directly: how far ahead do you plan your volume?

Groups plan further ahead. That is usually where longer supply agreements come from.

Forest owners around Kuhmo got their answer on 31 July. Yours is worth ten minutes of your own.

The next time someone asks why a foreign company is buying your local sawmill, you'll have thirty seconds to answer.

Right now — what do you say?

If the answer isn't ready, the Playbook is.

€150 million of revenue on 500,000 cubic metres. Is that a good business?

You cannot answer that without knowing the conversion rate, the log cost, the energy cost and the product mix. Most people in a room full of investors nod anyway.

I wrote the Forest-Investment Dictionary with Danish forest economist Anders Tærø Nielsen. It has 151 pages, 11 chapters, 14 printable tools, and 3 calculators. Investors learn to read a forest. Foresters learn to read a term sheet.

When the market turns, the people who can read the numbers make the better calls. The price is €99. Get yours below.

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Until Thursday!

Wish you all the best: Peter

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