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Tue, 11 Aug, 2015 12:35:08 AM FTimes-STT Report, Aug 11  File Photo Lehtikuva. 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.
File Photo Lehtikuva. 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.
File Photo Lehtikuva. North and South America’s share of exports is just under 10 per cent, Asia 17 per cent. Pulp is especially popular in Asia.
The price performance of South American currencies also favours Finnish forest companies, with production in the area.
“Brazil’s currency, the real, has weakened significantly,” Taittonen said.
Stora Enso has joint ventures in Brazil, Veracel, and in Uruguay, the Montes del Plata pulp mill, in Fray Bentos.
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