European Forestry Pulse #89 🌲

Hello,

Last week, Vida announced two sawmill closures. Yesterday, Stora Enso took a softwood pulp line off the map. Different products. Different drivers. Same direction.

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

May 18, 2026. Canfor (TSX: CFP) announced that its 77%-owned subsidiary Vida AB will permanently close its Urshult and Orrefors sawmills in southern Sweden. Combined capacity removed: 265,000 m³ of structural softwood per year. Combined job losses: 75.

The mill detail matters.

Vida CEO Karl-Johan Löwenadler: "The closures are necessary given the ongoing imbalance between production capacity and access to fibre in southern Sweden."

After the closures, Vida will operate 13 remaining sawmills across central and southern Sweden.

May 25, 2026. Stora Enso announced plans to permanently close softwood pulp production on fiberline 3 (L3) at its Skutskär mill in Sweden. Production stops in Q3–Q4 2026, subject to change negotiations and customer orders. Up to 80 employees are affected.

Skutskär itself stays open. Fluff pulp production continues on the other two lines. Total mill capacity: 515,000 tonnes/year. Total mill workforce: about 370 people.

The reason Stora Enso gave was direct. European softwood pulp demand has fallen since 2023. Prices dropped. Wood costs rose. L3 now runs at negative margins, with no return path in sight.

Timo Tidenberg, Head of Stora Enso's Business Unit Skutskär: "We have examined a number of options to improve the financial situation of fiberline 3. However, none of these options have proved feasible in ensuring long-term cost competitiveness for L3."

Two announcements, seven days apart. Both Swedish. Both about taking capacity off the map. The temptation is to call them the same story.

They are not. Read closely.

Vida is closing two sawmills because there is not enough wood. Southern Sweden has a fibre supply problem. Götaland's notified felling area was down 47% in April (see Quick Hit 2 below). Sawlogs are scarce. Costs are at records. Vida's response is to consolidate production into fewer, more efficient sites.

Stora Enso is closing a pulp line because there is not enough demand. European softwood pulp is in a structural decline. Prices have been falling for two years. The same fibre squeeze that hurts Vida helps no one when the downstream product cannot sell at a margin.

These are two different problems hitting the same country at the same time. One is upstream. One is downstream. Both end with capacity coming off the European map.

This is the Nordic processor cycle we previewed in EFP #84 and closed the loop on in #85. It is no longer a question of when the cycle bottoms. The structural answer is now visible. Mills that cannot run profitably in 2026 are being shut, not paused.

If you own forest in southern Sweden: The Vida closures remove 265,000 m³ of local sawmill demand. That sounds bad. It is not. The driver was log shortage, not log surplus. Your stumpage is not at risk from these closures. The fibre squeeze that caused them is still in your favour.

If you sell pulpwood in central or eastern Sweden: Skutskär's L3 closure removes one softwood pulp customer. The mill stays open. Fluff pulp keeps consuming wood. But the mix shifts toward higher-value grades.

If you allocate institutional capital to European forest assets: This is the data point that confirms the cycle has structural teeth. Not every Nordic mill comes back. Some close permanently. Your portfolio model needs to assume continued capacity attrition through 2027, not a clean cycle recovery.

If you run a sawmill anywhere in Europe: Karl-Johan Löwenadler just published your message to the board. Capacity rationalisation is no longer a tail risk. It is the visible peer behaviour. Sources: Canfor press release — Vida AB to close two sawmills in southern Sweden | Lesprom — Vida AB to close two Sweden sawmills, cut capacity 265 thousand m³ | PaperAge — Stora Enso plans to close softwood pulp line 3 at Skutskär | PulpAperNews — Stora Enso plans to reorganise its Skutskär production unit

On May 21, 2026, Latvia's State Audit Office published a critical audit of Latvijas Valsts meži (LVM), the state-owned company that manages 47% of Latvia's forests.

The audit found that the Ministry of Agriculture, as shareholder, failed to direct at least €130.3 million in additional dividends to the state budget. A separate decision to reduce prices for second-grade spruce and pine sawlogs in 2024–2026 cost LVM €49.4 million in revenue.

The scale matters. LVM's 2024 net turnover was €586.1 million. Its 2024 dividend to the state was €141.3 million — 37% of all state-owned company dividends to the Latvian budget.

State Audit Office Council member Oskars Erdmanis: "When there is a lack of clear goals, transparent governance, and economically justified decisions, not only does the state budget suffer, but also public trust in how state forests are managed."

Why it matters: This is the first audit-confirmed quantification of governance failures at one of the Baltic's largest state forest companies. For investors benchmarking state-managed timberland, the audit is now a comparable. For policy debates on Baltic stumpage pricing, the €49.4 million number now has a source.

The takeaway: If you advise institutional capital on European state-forest co-investment or supply relationships, the Latvian audit is the new reference document on what oversight failure looks like in numbers. Sources: BNN — State Audit Office harshly criticizes LVM and Ministry of Agriculture | LSM English — Audit: Poor management of Latvian State Forests causes millions in losses

The Swedish Forest Agency (Skogsstyrelsen) reported on May 12, 2026 that the area notified or applied for felling in April 2026 was 17,904 hectares. That is 15% below April 2025. Applications for montane forest felling permits fell 31% to 479 hectares.

The regional split tells the story:

Year-to-date (Jan–Apr 2026), total notified area reached 88,269 ha, +6% YoY. The elevated YTD reading is concentrated in Dalarna and Gävleborg, both still working through windblow from Storm Johannes (27 December 2025).

Why it matters: This is the front-end indicator of Swedish softwood supply. The 47% drop in Götaland is the direct context for Vida's Urshult and Orrefors closures in the Big Story above. When notified felling falls 47% in a region, sawmills in that region run out of logs whether or not anyone announces a closure.

The takeaway: Watch Skogsstyrelsen's May and June notifications. If the Götaland number stays below long-run averages, more capacity rationalisation in southern Sweden becomes likely. Source: Skogsstyrelsen

On May 19, 2026, Finnish forest machinery manufacturer Ponsse Plc announced the PONSSE Buffalo Planter. It is the company's first tree-planting machine in its history.

The unit is built on the Buffalo forwarder platform. It carries four planters — two per side. Verified specs:

The machine was developed jointly with Ponsse's technology subsidiary Epec and South African plantation specialist Novelquip Forestry. Initial commercial market: South America plantation operations.

Ponsse Chief R&D and Technology Officer Juha Inberg: "Built on the Ponsse Buffalo forwarder platform, the planting machine performs spot tillage, plants the seedlings and waters them — all in one seamless process."

Why it matters: Ponsse has been a pure cut-to-length harvesting company for forty years. The Buffalo Planter is the first move into regeneration. Mechanised planting at industrial scale has been a research story for two decades. A major OEM productising it is a different kind of signal.

The takeaway: If you contract regeneration in Central or Eastern Europe and have ever wondered when mechanised planting becomes a real choice, the answer is "the next time Ponsse Forest brings the machine to a demo near you." Source: Ponsse Plc — Ponsse expands its technology offering into forest regeneration solutions

Forisk's weekly Timber REIT (FTR) Index for the week ending May 15, 2026 showed publicly traded US timber REITs down 3.43% over the past week.

The FTR index tracks the basket of US public timberland companies. The post-Rayonier–PotlatchDeltic merger (covered in EFP #86) means that basket is now smaller — two dominant names, Weyerhaeuser and the combined Rayonier+PotlatchDeltic. A single week's print at –3.43% does not change a long-term thesis. It does signal that capital is reading the same cycle Europe is reading.

Why it matters: European institutional investors benchmark forest fund returns against the listed US peer set. When the FTR index moves sharply, the implied discount rate on every European institutional forest valuation moves with it. The Vida and Skutskär announcements in the Big Story above land in the same week the US benchmark prints –3.43%. That is not coincidence. That is one cycle on two continents.

The takeaway: If your fund or family office holds European forest assets at a fair-value mark, check whether your discount rate is calibrated to the current FTR level. Pre-merger discount rates that assumed three listed comparables now reference only two. The denominator has shrunk before most underwriting models updated. Source: Forisk

List every European mill — sawmill or pulp — that has announced a closure, layoff, or curtailment in the last six months.

You may already have most of this list in your head. Write it down anyway.

Vida (May 18). Skutskär (May 25). Weinig Malterdingen (EFP #87). Raute (EFP #85). Valmet (EFP #83). What else?

Three columns. Date. Site or company. One line on the reason given.

Now read your own list. Which reason appears most often? Fibre shortage? Demand collapse? Margin compression? Each one points at a different forward exposure for your business — supply, sales, or cost.

Time: 20 minutes. The list you build today will be the calendar you use to track the next six months.

The next time someone on your board asks why two Swedish mills closed in one week, you'll have thirty seconds to answer.

Right now — what do you say?

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

The brief is free. The briefing is not.

ForestryBrief publishes verified intelligence — free, three times a week, in 25+ countries. When you need that intelligence applied to your specific situation, that's a ForestryBriefing.

Intelligence — Investment due diligence, market intelligence, EUDR compliance, cross-sector risk analysis, background verification in three languages.

Communication — Strategy, trade publication articles, stakeholder messaging, newsletters that people actually open. EN | DE | HU.

Live — Conference presentations, panel moderation, keynotes. Next: WAN-IFRA World Printers Summit, Rotterdam, October 2026.

First briefing guarantee: if it doesn't deliver intelligence you can act on, you don't pay.

→ See what a ForestryBriefing looks like | [email protected]

Until Thursday!

Wish you all the best: Peter

🤝 Need help with forestry communication, intelligence, or due diligence? See what we offer → ForestryBriefing

📩 Got this email forwarded to you? Subscribe to ForestryBrief here.

📚 Missed an issue? Browse the ForestryBrief archive

P.S. What’s the biggest challenge you’re facing in forestry right now?
Hit reply and let me know — I read every message personally.

P. P. S. Know a forest professional who’s drowning in EUDR complexity or missing out on timber market shifts? Forward this email to them!

Shauna Matkovich's Forest Invest Podcast is one of the best resources for understanding where forest finance is heading. If you are interested in Forest Investments, start there.

If you like FB be sure to subscribe to Boreal Tech Brief, a newsletter of my friend Axel covering tech in forestry with a Nordic angle: