6 February 2025
The year 2024 was exceptionally weak financially, with comparable operating profit falling to EUR 203 million. Demand in our main markets was subdued in all product groups, except for tissue and cooking papers and Kerto® LVL. At the beginning of the year, political strikes caused a loss of EUR 60 million. The effects of higher raw material and logistics costs could not be passed on to product prices, as demand was weak. Major development investments in recent years have significantly increased depreciation. The positive effects of new capacity on profits have not yet materialised in the sawmill, pulp and paperboard industries due to the start-up of production and weak demand.
The development investments already made and those still being planned will strengthen Metsä Group’s operational competitiveness, which means that our ability to operate in a challenging competitive environment is strong. The Group’s equity ratio has remained stable at 56%. The Group’s parent company Metsäliitto Cooperative remains free of debt. We are therefore well placed to continue our planned long-term development.
In the wood market, trade was normal, and prices remained at a record high all year compared with figures across the last two decades. Metsä Group aims to be a forerunner in forestry that combines the ecological and economic development of forests. A third of the wood trade in 2024 was conducted under the Metsä Group Plus model, which uses enhanced forestry measures to safeguard biodiversity. The objective is to achieve regenerative forestry, where the impact of commercial forest management on forest biodiversity is net positive. Key actions to achieve this goal include the diversification of tree composition, increasing the amount of decaying wood, extending buffer zones and controlled burning of small forest areas to support species that live in burnt forest. The enhanced ecological forest management services have been very well received by our owner-members.
The overall situation for the mechanical forest industry has been weak due to the continuing recession in the construction industry and high wood prices. We had to significantly curtail sawn timber production for demand and profitability reasons in 2024. Demand for Kerto LVL has been good, and we have been able to use all our Kerto LVL capacity at a slightly rising price level. This is because of the efficiency advantage of Kerto LVL in industrial construction and stronger demand in the US market than in Europe. In 2024, the construction of the new Kerto LVL mill in Äänekoski progressed, and the installation phase is about to begin. The commissioning of the mill will begin in early 2026.
The Chinese pulp market, which is important for Metsä Group, experienced strong fluctuation during 2024. In the first quarter, demand and prices increased, but in the second quarter, demand almost came to a standstill. During the third quarter, the market started to pick up again, and softwood pulp trading resumed at slightly higher prices. In Europe, demand is stable but weak due to a further decline in the consumption of printing papers. The use of pulp in hygiene products and packaging materials is increasing. Metsä Fibre’s four mills represent the most efficient quarter in a global comparison of market softwood pulp producers. The bioproduct mills in Kemi and Äänekoski are in a class of their own – the best of the best. A strong pulp industry provides Metsä Group with a solid basis for developing its business to increase the value of the forest industry and forestry.
Global demand for packaging materials made from renewable wood raw materials continues to grow. Growth is driven by economic growth, increasing food packaging and the replacement of fossil packaging materials with renewable raw materials. The competitiveness of product quality and the growth of customer demand are good for both our folding boxboards and high-quality linerboards. Our challenge, especially in the EMEA region, is the growing overcapacity in
Chinese paperboard. In this situation, Metsä Board’s competitive edges are its strong sustainability performance, high and consistent product quality, and comprehensive and competent customer service. In the paperboard industry, we have many development projects underway to improve the efficiency and quality of our mills and products. We are also assessing our potential to produce new packaging materials.
Metsä Group is a leading player in the Nordic tissue paper industry. Our consumer brands Serla and Lambi, as well as our Katrin product family for professionals, are known to almost everyone. In addition, we produce high-quality products for private labels. Our two mills in Germany also make Katrin products and private-label products for major Central European retail chains. In Eastern Europe, we operate both un-der our own brands and those of retailers. A major growth area for our tissue industry is the UK, where we have sold increasing product volumes from our continental European mills, and where we are now considering a potential mill investment. Our investment in Mariestad, Sweden, will start at the end of 2025 and will strengthen our role in Scandinavia. Cooking papers is a small segment with sales of around EUR 150 million, but its growth prospects are very interesting thanks to the growing use of food packaging, which boosts this product category.
Metsä Group is determined to build on its success story in forestry and the forest industry. We take external factors into account in our operations. We promote biodiversity and meet the challenges of combating climate change. Resource-efficient products made from renewable wood raw materials are our answer to the needs of people’s daily life. Our aim is not to support overconsumption but to create sustainable solutions to meet people’s basic needs. Wood construction is a way to create environmentally efficient housing, and fibre-based packaging can reduce food waste and ensure a high level of recyclability of packaging material. Hygiene products made from wood fibre contribute to health and wellbeing.
Our operations are founded on Finnish forests. Forest health, biodiversity and resilience to climate change are important to all Finns and are especially close to the hearts of our more than 90,000 owner-members.
Ilkka Hämälä
President and CEO
Metsä Group
