European Forestry Pulse #35 🌲

Hello,

Stora Enso just announced the biggest European forestry restructuring in years. The company will split off 1.2 million hectares of Swedish forest into a new public company worth €5.7 billion. At the same time, they're reviewing seven Central European sawmills representing half their wood products business.

Meanwhile, Metsä Group confirmed 520 permanent job cuts in Finland. Timber trade there collapsed 42% despite prices staying 14-55% above 2022 levels. Something broke in the Finnish market.

But technology offers hope: Poland rolled out AI timber measurement to 700+ forest units after successfully measuring 250,000 cubic meters. And Canada announced it will divert 10% of lumber exports away from the US to European markets.

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

Stora Enso announced November 14 it will separate its Swedish forest holdings into a new publicly-listed company. At the same time, the firm launched a strategic review of seven Central European sawmills. This represents the most significant restructuring of a major European forestry company in recent memory.

The Swedish forest demerger: Over 1.2 million hectares of Swedish forest land will become a new company. Fair value: approximately €5.7 billion as of September 30, 2025. The company already sold about 175,000 hectares this year for €900 million. What remains becomes Europe's largest pure-play listed forest company.

Major shareholders Solidium Oy and FAM AB support the plan. Together they hold roughly 21% of shares and 55% of voting rights. The new company will list on Nasdaq Stockholm and Nasdaq Helsinki. Headquarters: Falun, Sweden. Timeline: completion expected in first half of 2027.

The wood supply deal: The new forest company and Stora Enso will sign an 18-year wood supply agreement. Initial volumes represent approximately 9% of Stora Enso's Nordic wood and fiber supply. This guarantees the packaging business gets wood. But it also means the forest company can sell to other buyers.

The Central European review: Stora Enso simultaneously announced it will review its Central European sawmills and building solutions operations during 2026. This covers seven sawmills in Austria, Czechia, Poland, and Lithuania. Combined annual production capacity: roughly 3 million cubic meters. That's about 50% of the Wood Products segment's sales.

The review also includes three cross-laminated timber (CLT) mills, wood procurement operations, and international sales. Stora Enso stated this business "does not bring strategic or operational synergies for Stora Enso's core renewable packaging operations."

Why this matters: Stora Enso is essentially exiting traditional forestry and sawmilling. The company wants to focus on renewable packaging. Forests become a separate investment vehicle. Central European sawmills face uncertain future - likely sale, closure, or restructuring.

What this means for you: If you supply timber to Stora Enso's Central European mills, expect changes in 2026. The seven sawmills under review represent significant processing capacity. A buyer might continue operations. Or capacity might exit the market, tightening regional supply-demand balance.

For forest owners in Sweden, the new forest company will operate independently with its own board and strategy. The 18-year supply deal provides stability. But the company will also pursue market opportunities. Expect professional, profit-focused forest management.

The market signal: When a major integrated company splits forests from processing, it signals structural change. Stora Enso sees more value managing forests separately than feeding its own mills. That tells you where management sees future profits - in packaging, not timber. Sources: Stora Enso Press Release | Timber Trade Journal | Wood Central

Metsä Group announced November 11 it will eliminate 520 permanent positions, with a maximum of 440 redundancies. Statutory negotiations concluded in Finland. The initial estimate was 540 positions.

The cuts are part of a €300 million cost savings programme announced in July 2025. CEO Jussi Vanhanen called it "a very sad moment for our entire committed work community" but "indispensable" for the profit turnaround the company needs.

Breakdown: Metsä Board cuts 150 positions. Metsä Fibre announced November 12 it may temporarily lay off approximately 350 staff at four sawmills (Lappeenranta, Rauma, Renko, Vilppula) for up to 90 days during 2026. Wood procurement and forest services eliminate approximately 60 positions.

Metsä Board will record approximately €12 million in one-off costs in Q4 2025. The company employs about 9,600 people worldwide, with roughly 5,600 in Finland.

The takeaway: Major Finnish forest company confirms significant workforce reductions as softwood lumber market remains weak despite high stumpage prices. Sources: Metsä Group | Panels & Furniture Asia | YLE

Finland's forest industry purchased only 4.8 million cubic meters of wood from privately-owned forests in Q3 2025 (July-September). That's 42% less than Q3 2024. Roughly one-third below the five-year average.

Pulpwood volumes: 2.3 million m³ (over one-third below long-term average). Log volumes: 2.0 million m³ (nearly 40% lower than average).

The paradox: Prices remain at historically high levels. Conifer log prices are 14-20% higher than 2022 averages. Birch log prices increased about 33% since 2022. Pulpwood prices average 55% above the same period.

High prices with collapsing volumes signals something broke in the market. Mills can't afford to buy at these prices. Or forest owners won't sell expecting further increases. Either way, the Finnish timber market isn't functioning normally.

The takeaway: Sharp volume decline combined with high prices indicates severe market dysfunction in key Nordic timber market. Source: Pulp & Paper News

My latest article just published on Fordaq: "The PR battle forestry never fought: How we lost public opinion while perfecting sustainability."

In 1996, the public ranked the forestry industry as more environmentally damaging than oil, gas, coal, and mining. We - the renewable, carbon-storing sector - lost a perception battle to fossil fuels.

The piece explores how forestry failed to invest in professional communications while environmental NGOs built sophisticated campaigns. Now we face the consequences: hostile regulations, public suspicion, and policy makers who don't understand what we actually do.

Read the full article on Fordaq: The PR battle forestry never fought

The takeaway: Forestry's communication failure created today's regulatory challenges. Understanding this history helps us fix it.

Polish State Forests (PGL LP) entered the second phase of nationwide AI timber measurement deployment following successful pilot completion. The rollout covers over 700 forest units across all 17 Regional Directorates managing 7.3 million hectares.

The pilot phase measured over 250,000 cubic meters of timber in 14 forest districts. The photo-optical technology uses smartphone images and AI analysis to calculate timber stack volume. Data automatically transfers to State Forests' Leśnik+ system.

Field feedback shows the system reduced forester workload, improved efficiency by 10-30%, and provided photographic documentation ensuring transparency for contractors and timber buyers. The system creates auditable records within fully digital data management.

Strongest engagement reported in Szczecin, Piła, Poznań, Radom, and Katowice regions.

The takeaway: Major European state forest organization demonstrates practical, large-scale AI deployment with verified results, setting new standard for transparent timber measurement. Sources: Timbeter | Tree Frog Creative | Forest Machine Magazine

British Columbia announced plans to divert 10% of softwood lumber exports away from the US market to the UK, European Union, and Middle East. Target: one billion board feet redirected to new markets.

The move responds to persistent US-Canada softwood lumber trade disputes and tariff uncertainty. Canadian producers are actively seeking European buyers as an alternative to US market dependence.

For European buyers, this means increased availability of Canadian softwood at potentially competitive prices. Canadian lumber typically competes on price with Nordic suppliers in certain grades and specifications.

The takeaway: US trade tensions create opportunity for European importers to access Canadian softwood supply previously destined for American markets. Source: Lesprom Network

November 19-22, 2025: Vietnam Wood Show in Ho Chi Minh City – Asia-Pacific export opportunities for European timber

November 24-December 5, 2025: CITES Conference in Samarkand, Uzbekistan – Timber trade regulations and species protection discussions

December 30, 2025: EUDR compliance deadline for large/medium operators (current legally binding date - see next issue for regulatory update)

Map your exposure to major company restructuring. With Stora Enso splitting and Metsä cutting, supply chains are shifting.

Twenty minutes, critical insight:

Don't wait until restructuring is announced. The Finnish market shows what happens when major buyers pull back - volumes collapse even with high prices. Know your alternatives before you need them.

When €5.7 billion of forest assets split off and 3 million m³ of sawmill capacity faces review, ripples spread. Make sure you're not caught in the wave.

Until Thursday!

Wish you all the best: Peter

P.S. What’s the biggest challenge you’re facing in forestry right now?
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