Issue 17 - August 2010 - International Forest Industries (IFI)

SAWPOINTSBillion Euro Swedish CTLindustry looking strongA CTL machine unloads in SwedenThe global market for forest machines that usethe environmentally friendly cut-to-length (CTL)method is currently worth about €1 billion,according to figures from the Swedish forestryresearch institute SkogforskTogether with Finland, Sweden is a leaderin the field of modern forest technology,with Swedish manufacturing in this sectorworth about €330 million. On top of that is thevalue of equipment and accessories plus smallscaleforest technology. These are also worthmillions of Euros, conclude studies by theSwedish University of Agricultural Sciences andother research bodies.Sweden and Finland together make up about30% of the total global CTL market. During the firstdecade of the 2000s this market grew by 50% toabout 3,000 machines sold annually. A majority ofthese machines are made in Sweden and Finland,and it is this Swedish forest machinemanufacturing sector that the new Skogforsksurvey values at about €330 million. This figuredoes not include the value of harvesting heads andother equipment, which are exported separately.The most important growth markets are SouthAmerica, South East Asia and China – thanks to thespread of plantation forestry – plus Russia.One factor that has contributed to the growingexport success of many small Swedishmanufacturers is the fact that the internationalindustry trade fair, Elmia Wood, is held on theirhome ground.“This is where many Swedish companieshave established their first contacts with newmarkets, and then their exports have just grownfrom there,” Per Jonsson, the project managerof Elmia's forestry fairs explained.The manufacture of forest machines –including the operations of subcontractors –currently employs about 2,000 people inSweden, says the Skogforsk survey. Most ofthese jobs are in rural areas and are spreadthroughout the country.Skogforsk concludes that a strong forestmachine manufacturing industry in Sweden,with products that are designed for domesticconditions and environmental regulations, hasproven to be of decisive importance both to theprofitability of the Swedish forest industry andto ensuring the competitive supply of rawmaterials to that industry. These in turn are animportant prerequisites for continuedinvestment in the Swedish forest industry.Swedish forest machine manufacturers arerelatively small in terms of their annual revenuebut they have a high level of technical expertiseand are very innovative. One issue withstrategic ramifications is therefore how thesecompanies, with their lack of cohesiveorganisation, can be strengthened anddeveloped in Sweden, for instance with thehelp of advanced technical research atuniversities and other third-level institutions.Skogforsk argues that such help is a necessityfor continued productivity growth in the forestindustry, improved competitiveness, higherexport earnings from forest machines and morejobs in this sector.AUGUST/SEPTEMBER 2010 | International Forest Industries 9