HELSINKI: Exchange rate developments this year have significantly improved the results of Finnish forest industry companies.
Their costs are in euros, but a large part of their revenues comes in other currencies. “The relationship between the euro and the dollar is the most important factor,” said Nordea analyst Harri Taittonen. The euro has weakened to about 1.10 dollars, a large drop from last year’s 1.40 dollars.
The devaluation of the euro has particularly boosted the pulp mills, as pulp is traded in dollars. Other export products outside the eurozone are often based on the dollar. Not always, though. “The pound has also been very strong,” Taittonen noted.
Almost 40 per cent of forest industry exports go to the eurozone. Over 60 per cent of exports are exposed to the fluctuations of foreign exchange rates. Twenty per cent of exports go to non-eurozone European countries, mainly the UK. Sweden does not import many forest industry products, but the stronger krona has improved the competitiveness of Finland to its main competitor.
