Many Finnish forest owners consider that selling timber is a complex business. Not so, says a woman who has sealed thousands of deals.
At the beginning of her career, Ms.
Kirsi Nordstrom was the first woman allowed to make timber sales in the company then known as Enso Gutzeit. Currently Marketing Director at Stora Enso Forest and responsible for concluding thousands of timber deals, she thinks that timber sales are regarded as mystical for no good reason at all. The rules are clear and when dealing with well-known and responsible buyers, the forest owners are not done out of their money or left with roads churned to mud by trucks.
"When meeting with a forest owner, the first thing we do is to ask what the forest owner wants and needs from his or her forest. The second question is whether the holding has a forestry plan. An existing forestry plan makes things easier as it indicates what kind of forest there is on the holding, and how much," Nordstrom says.
The majority of Finnish forest owners sell their timber by 'standing sale', which is what this story also deals with. In standing sale the forest owner sells the right to fell the trees on an agreed area. The forest owner is paid a stumpage price. The buyer is responsible for the felling and transport costs. In a 'sale at delivered price', the forest owner fells the trees and transports them to a place accessible to a timber truck.
A visit to the forest is obligatory When the owner's goals regarding the management and use of the forest property are clear, a forest professional visits the holding. This is the time to assess the potential felling possibilities, silviculture needs and valuable habitats and other nature values. "I always try to arrange that the forest owner comes along, as they could learn a lot about their forest," Nordstrom says.
After the visit to the holding, a proposal is presented to the forest owner about what to do in the forest. Proposals for fellings and silviculture activities and what they are based on are discussed. "It is not difficult to explain the need for silviculture activity to forest owners. Finns want to take care of their property."
The nature values associated with the holding are also discussed, and the reasons why some areas are left outside forestry operations, retention trees and buffer zones are explained. NordstrĂm says that some forest owners have their own wishes about which areas should be conserved.
Separate agreement on nature management With every timber sale, a separate nature management agreement is made at Stora Enso. This agreement states which legislation, guidelines and certification systems the company adheres to in its activity in forests.
"No timber sale can be registered in our information system unless the agreement is made. This is a way to ensure that nature and environment issues are discussed with the forest owner," NordstrĂm explains.
Other issues discussed at this point are how the forest will be regenerated and the possible gathering of logging residue for energy use.
Many things affect the timber price After all this discussion, the interesting issue of timber price is reached. The price is agreed on separately in each and every timber sale.
The price is agreed on per cubic metre of timber. The price is affected by many issues, but the most important is the quality of the logs: whether they can be used in making paper, or as sawn timber or veneer. The stout logs suitable for making veneer are the priciest. More is paid over stout logs suitable for sawn timber than for the thinner ones used to make pulp and paper.
Another important issue is when the stand - the area marked for felling - can be felled.
Stands that can be felled at any time of the year, regardless of how much it has rained or of whether the ground is frozen or not, are the most sought-after and therefore most expensive. "In such places the ground and roads can take the machines without being broken and the timber can be felled and taken to the mill exactly when it is needed," NordstrĂm explains.
The price paid for cubic metre of timber decreases if the stand can only be felled during wintertime and ground frost.
The bigger the deal, the higher the price per unit Timber sales are different from many other deals in that the more the forest owner has to sell, the more is paid per unit. A forest owner selling 300 cubic metres of timber is offered less per cubic metre than one selling 1,000 cubic metres of the same quality.
This is because increasing the amount of timber that can be felled at the same time brings down the fixed cost per cubic metre of timber. The fixed cost includes the price of moving machinery from one stand to the next and the time used to negotiate the deal, for example.
Other issues affecting the price offered are whether it is a regeneration felling or a thinning, the quality of terrain in the forest, the distance from the stand to a road accessible to timber trucks and the distance to the mill.
Often the negotiations for a timber sale take one or several weeks to accomplish. If a forest owner experienced in timber sales walks into to the office of a familiar timber buyer near his or her forest, the deal can be made even in a day.
A bundle of papers and a map A bundle of documents are signed in a timber sale. The felling agreement includes all the points agreed on in regard to the sale. By Finnish law, the felling has to be done within two years of the date on the felling agreement, or the sale becomes void. The felling agreement also states whether the forest holding is certified or not.
Usually an advance payment is made to the forest owner within 30 day of signing the agreement. The rest is paid within 30 days of the end of the felling.
A map of the felling area is also included in the felling agreement. All places where the felled timber can be stored to wait for long-distance transport are marked on it, as well as the roads that can be used to access the stand.
Even though all maps are converted into digital format and are visible on the harvester's computer screen, the stand is always marked in situ in the forest to make sure the felling does not slip into the wrong area.
A notification of felling is made to the regional forestry centre at least two weeks prior to beginning the felling. The forestry centre checks whether there are any reasons why the felling should not take place and that the sites with nature values have been correctly taken into account.
"By law, the notification should be made by the forest owner. When we make a deal we always agree that Stora Enso makes the notification, to ensure that it is not forgotten," NordstrĂm says.
If the forest owner wants to, he or she can come and watch the felling. "We let the forest owner know when the machines arrive," Nordstrom says.
Krista Kimmo
