Finland’s Keitele Group Sees Temporary Slowing in Demand for Lumber and Wood Products

Finland’s Keitele Group is reporting (2-2-2023) that the “temporary slowing” in the demand for lumber and wood products—which started in June of 2022—continues with no immediate relief in sight. Keitele Group is a family-owned business founded in 1981, consisting of three independent companies.

While certainly not alone, Keitele Group cites the war in Ukraine, rising interest rates, expensive energy, and the overall global economic situation. Coupled with the steadily rising cost of logs and the log harvesting process, these factors continue to challenge construction, as well as building repair and remodeling. This in turn has diminished their and other sawmills profitability.

When the temporary slowdown was first experienced in the summer of 2022, Keitele reported that it originally addressed the situation by providing the entire staff with two additional weeks of paid time off. However, in January 2023, the company decided it could no longer produce additional lumber and wood products for storage and entered into negotiations with the personnel representatives regarding layoffs that may take place during 2023, lasting a maximum of 90 days. The negotiated solution allows for layoffs of hourly paid staff doing productive work in Keitele, Kemijärvi, and Alajärvi.

However, Keitele Group remains optimistic. The company says it believes that demand will weaken only temporarily, and in time there will be an increase in demand and activity. Keitele added that when the economic situation does stabilize, its modern and competitive production machinery will be up and running again.