Why Finnish sawmills are in trouble?
There are two main reasons for troubles for Finnish sawmills. Firstly, price of wood has risen slowly and now comprises 72% of the price of any finished sawed product. Secondly, basis for timber income taxation changed from land area based taxation into sales based taxation. Together these result into diminishing timber sales and rising timber prices, which in turn result into diminishing production and lower profit margins.
How to get out of this vicious circle before everybody in the industry have gone bankrupt? According to analysts the answer is by increasing the value of finished products. How to do that? To my opinion, log home companies stand at better place as value adders for wood than pure sawmills…
