Sweden

Jan Remröd
Swedish Forest Industries Association, Stockholm

General economic situation

The weakening of the economic activity, that started during the second half of 1995, continued in 1996. Stocks were reduced in the industry and in the distribution chain, and stock reduction seems to have contributed negatively to GDP with one percentage point. Industry production slowed down considerably, from an increase of 10 percent in 1995 to 1 percent in 1996. Investments showed a strong increase for the whole year, 7 percent, but slowed down during the course of the year, as a three-year investment cycle is nearing its end.

The inflation rate continued to decrease to a record low and is one of the lowest in Europe. Both long- and short-term interest rates continued to decrease. The unemployment continues to be a major problem, and the unemployment rate is considered to be only marginally reduced during the next few years. The budget deficit in the public sector has been considerably reduced.

Key indicators, percentage change

	1995	1996	1997 prognosis
GDP	3.6	1.2	2.0
Consumer prices	2.9	0.8	1.0
Open unemployment	7.7	7.9	7.0
Current account balance, in percentage of GDP	2.1	2.6	4.0

Performance of the pulp and paper industry

The Swedish production of paper and board decreased in 1996 for the second consecutive year and amounted to 9 million tonnes, a decrease by 125 000 tonnes or 1 percent. The capacity utilisation fell to 90 percent. Exports decreased marginally, by 0.5 percent and amounted to 7.3 million tonnes. Deliveries to the EU countries fell by 2 percent and reached 5.7 million tonnes. Deliveries to Eastern European countries increased strongly but are still at low levels, and also exports to Asia increased. Deliveries to the home market decreased by 3 percent. For further details see the statistics attached.

The Swedish exports of pulp increased by 2 percent. Producers' inventories were reduced in the first half year, but showed again an increase towards the end of the year. See also the statistics attached.

Recovered paper

The consumption of recovered paper at paper and board mills increased by 5 percent to 1.5 million tonnes in 1996. This resulted in an increase of the utilization rate to 16.7 percent compared to 15.6 percent the year before. The collection of recovered paper has been calculated to 1.1 million tonnes corresponding to a recovery rate of about 55 percent. The availability of recovered paper was good during the year.

A new de-inking line with a yearly capacity of 140 000 tonnes of newspapers and magazines started up in May 1996.

Raw material availability 1996-1997

Both the sawmill industry and the pulp and paper industry experienced high raw material availability during most of 1996. The situation for the sawmills, however, changed during the third quarter, when sawmills in some regions started to experience timber shortage. Price raises during the fourth quarter for saw timber have improved the situation, and at present there is a good availability for raw material for both sawmills and pulpmills.

Investment and capacity in the pulp and paper industry

Investments in the pulp and paper industry in Sweden reached 12 billion SEK in 1996 and are predicted to reach 9 billion SEK in 1997.

According to preliminary figures in the most recent capacity survey, paper and board capacity will increase by 500 000 tonnes to 10.5 million tonnes in 1997. A new machine for the production of liquid board has recently started up, and the capacity figures also reflects the new machines for LWC and newsprint that started up in 1996. Investments also concern improved quality standard of pulp and paper, rebuilds of wood-handling and of the bleaching process in the pulp mills and other environmental measures. Market pulp capacity will increase by 100 000 tonnes to 3.9 million tonnes in 1997.

Issues of particular interest

Progress in sustainable forest management (SFM) also in relation to certification

Swedish forestry has gone through some major changes during the last decade. All forest companies have introduced ambitious environmental programmes to be able to practise forestry without jeopardising the biological diversity. Sustainable forest management is today not only a question of sustainable yield, but also of ecological sustainability. Some steps towards sustainability that have been taken are: site-adaptation, day-to-day conservation and ecological landscape planning.

The Swedish forest industry looks upon certification as a way to verify, and get credit for, the environmentally friendly methods that already have been, and will be, introduced.

The Swedish forest industry is involved in the certification issue at three different levels:

International

The industry participates in the ISO Working Group (ISO/TC207/WG2 on Forestry). The groups mission is to create a linkage between national certification standards and ISO 14000. The Swedish forest industry believes that a nationally-developed certification standard within the Forest Stewardship Council (FSC) framework could be very well linked to the ISO environmental management system. Therefore, FSC and ISO are complementary, and do not exclude each other.

Nordic

The Nordic Certification Project is a cooperation between the forest industry and the forest owners in Sweden, Finland and Norway. The aim of the project is to share information and experiences from the national certification initiatives which now take place in the Nordic countries, and to harmonise the national work as much as possible.

National

A Swedish FSC Working Group was formed in February 1996. Economic, environmental and social interests participate in the work. All relevant stakeholders have decided to take part in the work. The Swedish forest industry is also an active part in the discussion. The Working Group plans to propose a national standard during the spring of 1997. The proposals should be developed in consensus.

The socio-economic dimension of SFM and wood processing

Sweden has a long tradition of a good relations between employers, employees and indigenous people. Most potential conflicts have been settled a long time ago. In some cases, the parties have opposing interests, such as wages, etc. These questions are, however, settled in regular negotiations each year.

The remaining questions regarding the socio-economic dimension of SFM will be discussed and handled within the Swedish FSC Working Group.

Sustainability of fibre supply

The annual timber harvest has, throughout the whole century, been far below the annual increment. At present, only 70 percent of the yield will be harvested. The Swedish fibre supply is therefore sustainable indeed.

Paper and board statistics, 1996

Production		1996	1995	Change in	1996	1995	Change in
thousand tonnes		Q4	Q4	% 96/95	Acc	Acc	% 96/95
Newsprint		580	561	3.4%	2283	2345	-2.6%
Woodfree printing and writing		390	303	28.8%	1418	1394	1.7%
Wood-containing printing and writing		204	155	31.9%	752	652	15.3%
Tissue		76	79	-3.6%	297	293	1.5%
Wrapping papers		206	260	-20.7%	880	1082	-18.7%
	Kraft paper	200	254	-21.2%	858	1057	-18.8%
Folding boxboards		319	285	11.9%	1345	1358	-0.9%
Case materials		475	404	17.6%	1910	1904	0.3%
	Kraft liner	381	313	21.9%	1506	1491	1.0%
Others		35	36	-2.6%	132	140	-5.7%
Total paper and board		2286	2083	9.7%	9018	9169	-1.6%
Total deliveries		1996	1995	Change in	1996	1995	Change in
thousand tonnes		Q4	Q4	% 96/95	Acc	Acc	% 96/95
Newsprint		615	580	6.0%	2252	2350	-4.2%
Woodfree printing and writing		373	297	25.5%	1422	1377	3.3%
Wood-containing printing and writing		204	177	15.4%	722	715	0.9%
Tissue		68	67	2.3%	272	279	-2.5%
Wrapping papers		189	239	-21.1%	811	988	-17.9%
	Kraft paper	182	232	-21.2%	790	962	-18.0%
Folding boxboards		322	282	14.0%	1318	1281	2.9%
Case materials		464	392	18.4%	1932	1826	5.8%
	Kraft liner	364	304	19.8%	1514	1424	6.3%
Others		33	32	3.1%	129	132	-2.6%
Total paper and board		2267	2066	9.8%	8858	8948	-1.0%
Exports		1996	1995	Change in	1996	1995	Change in
thousand tonnes		Q4	Q4	% 96/95	Acc	Acc	% 96/95
Newsprint		512	463	10.6%	1862	1929	-3.5%
Woodfree printing and writing		305	232	31.4%	1162	1118	4.0%
Wood-containing printing and writing		164	137	20.3%	594	569	4.3%
Tissue		39	36	6.8%	152	146	4.3%
Wrapping papers		167	215	-22.4%	723	891	-18.9%
	Kraft paper	162	209	-22.7%	704	869	-19.0%
Folding boxboards		265	227	17.1%	1068	1037	3.0%
Case materials		389	324	20.1%	1614	1524	5.9%
	Kraft liner	326	271	20.2%	1356	1272	6.6%
Others		26	24	8.6%	101	100	0.9%
Total paper and board		1869	1658	12.7%	7275	7315	-0.5%
Domestic deliveries		1996	1995	Change in	1996	1995	Change in
thousand tonnes		Q4	Q4	% 96/95	Acc	Acc	% 96/95
Newsprint		102	117	-12.3%	390	420	-7.3%
Woodfree printing and writing		68	65	4.3%	260	259	0.3%
Wood-containing printing and writing		39	40	-1.3%	128	146	-12.2%
Tissue		30	3!	-3.1%	119	133	-10.1%
Wrapping papers		21	23	-9.1%	89	97	-8.9%
	Kraft paper	21	22	-7.2%	86	93	-7.9%
Folding boxboards		56	55	1.5%	250	244	2.7%
Case materials		76	69	10.5%	318	301	5.4%
	Kraft liner	38	33	15.9%	158	152	4.0%
Others		7	8	-14.0%	28	32	-13.1%
Total paper and board		399	407	-2.0%	1583	1634	-3.1%
Deliveries per destination		1996	1995	Change in	1996	1995	Change in
thousand tonnes		Q4	Q4	% 96/95	Acc	Acc	% 96/95
EC, excl. Sweden		1443	1306	10.5%	5716	5827	-1.9%
	United Kingdom	364	334	9.0%	1429	1466	-2.5%
	Germany	345	332	4.0%	1429	1475	-3.1%
	France	146	126	16.2%	604	621	-2.8%
	Italy	101	102	-1.1%	432	482	-10.5%
Other West Europe		116	100	16.1%	446	408	9.2%
North America		21	31	-32.1%	83	135	-38.5%
Asia		165	114	44.7%	616	529	16.3%
Other countries		124	108	15.3%	414	415	-0.1%
Total exports		1869	1659	12.7%	7275	7315	-0.5%
Domestic		399	407	-2.0%	1583	1634	-3.1%
Total Deliveries		2268	2066	9.8%	8858	8948	-1.0%

Swedish Forest Industries Association, March 1996.

Exports of Paper and Board

Deliveries by destination-change in per cent 96/95

Deliveries by grade

Market pulp statistics, 1996

Market pulp

PRODUCTION	Q4	Q4	Change	Cumul.	Cumul.	Change
thousand tonnes	1996	1995	96/95%	1996	1995	96/95%
TOTAL	820	719	14.2	3136	3324	-5.7
of which
Mechanical pulp	78	90	-13.0	328	412	-20.4
White pulp	709	603	17.6	2679	2781	-3.7
EXPORTS	Q4	Q4	Change	Cumul.	Cumul.	Change
thousand tonnes	1996	1995	96/95%	1996	1995	96/95%
TOTAL	617	516	19.7	2628	2587	1.6
of which
Mechanical pulp	48	59	-19.6	219	272	-19.3
White pulp	546	439	24.3	2292	2213	3.6
DELIVERIES OF WHITE PULP	Q4	Q4	Change	Cumul.	Cumul.	Change
thousand tonnes	1996	1995	96/95%	1996	1995	96/95%
EU excl. Nordic	444	366	21.2	1885	1893	-0.4
of which
Germany	190	154	22.9	792	776	2.1
France	85	60	41.9	338	330	2.3
Netherlands	30	21	45.8	118	109	7.6
Italy	39	30	30.0	183	188	-3.0
W. Europe excl. Nordic	465	377	23.4	1963	1961	0.1
Finland+Norway	28	21	31.4	103	101	1.8
E. Europe	27	17	59.6	110	84	31.4
Asia	21	14	53.6	78	38	107.4
North America	3	7	-61.6	22	17	31.1
Other countries	2	4	-36.4	15	12	26.0
TOTAL EXPORTS	546	439	24.3	2292	2213	3.6
Domestic	129	87	47.6	458	419	9.2
TOTAL DELIVERIES	675	527	28.2	2750	2632	4.5

White pulp = bleached sulphate, unbleached and bleached sulphite.
Swedish Forest Industries Association, March 1996.

EXPORTS OF PULP, Q4 1996

DELIVERIES OF WHITE PULP BY DESTINATION - Percentage change 96/95

DELIVERIES BY GRADE - Percentage change 96/95

PRODUCTION OF WHITE PULP

EXPORTS OF PULP, Q4 1996