Review by the President and CEO

25 April 2024

For most of Metsä Group’s business areas, the market situation in the first quarter of 2024 was stronger than at the end of the previous year. Paperboard order inflows  clearly improved from the low levels of the previous year, while the pulp price increased on the European market. Sawn timber prices increased, and the outlook for the second quarter strengthened. The markets for Kerto® LVL and birch plywood, as well as tissue and greaseproof papers, remained at a good level. In a situation promising budding growth and stronger demand, the four-week political strikes had a very significant impact on Metsä Group’s result. The majority of Metsä Group’s 21 mills in Finland were shut down for 2–3 weeks due to the port strike and the strike affecting rail goods transport. The result effect is expected to total EUR 60 million, EUR 20 million of which is allocated to the second quarter. Metsä Group commands a globally significant position as a soft-wood pulp supplier and a seller of premium folding boxboard and linerboards to European and North American customers. The long political strike will seriously affect customer relationships. Such irresponsible behaviour on the trade unions’ part undermines opportunities to develop Finnish industry in the long term.

As a group owned by Finnish forest owners, Metsä Group develops its operations true to its basic mission of increasing the value of Finnish forests. All our business areas have growth strategies, which we implment even if external factors do not always support this development. As one growth option for Metsä Board’s paperboard business, we explored the possibility of investing in a new paperboard mill in Kaskinen. As the results of the pre-engineering stage indicated that the project would not achieve adequate profitability, we abandoned the investment plan. Instead, we decided to carry out an investment programme to improve the efficiency of our existing paperboard mills. The investments in Metsä Tissue’s and Metsä Wood’s new production lines are progressing as planned towards their deployment scheduled for 2025. Our new product development projects are also making progress. Studies are underway to determine the profitability of investments in commercial production units in both the Muoto^TM 3D fibre packaging and the Kuura® textile fibre project. Metsä Fibre decided to invest in a demo plant for lignin products in Äänekoski. The pre-feasibility study concerning a large-scale carbon capture facility is still underway.

Metsä Group has gradually adopted harmonised business processes. As part of the project, the SAP ERP solution will be renewed by 2026. The central financial system and the wood supply system have already been implemented, and the deployment of the business system for the Wood Products Industry has begun. In future, the harmonisation of data architecture and content, part of the system renewal, will enable business efficiency to be improved with the aid of AI-based systems, for example.

Metsä Group’s work begins with our owner-members in Finnish forests and ends in products that meet our global customers’ daily needs. Implementing this value chain by continuously improving resource efficiency and considering the sustainability impact of our business in every respect is the basis of planning our operations. Metsä Group’s strong financial position and the personnel’s solid competence provide a good foundation for this work.

Ilkka Hämälä
President and CEO
Metsä Group