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Metsähallitus 2016

Operating Environment

Metsähallitus is a state enterprise that administers more than 12 million hectares of state-owned land and water areas, or about one-third of Finland's land area.

Metsähallitus works in several lines of business: in forestry and property development within the business sector; and via Parks & Wildlife Finland in the public administration sector, where it is responsible for nature conservation, game and fisheries and recreational use of the natural environment.

Metsähallitus generates economic and public value for the state. Economic value consists of the payment of dividends to the state, and long-term development of the yield potential of business properties. Public value is generated by meeting the social obligations of business activities and public administration duties, and from the regional economic impact of Metsähallitus’ activities.

The new law and new executives

Metsähallitus’ operating environment changed in many respects in 2016. The new Act on Metsähallitus entered into force in April. As a result, the forestry unit became a subsidiary, Metsähallitus Forestry Ltd, which has the exclusive right to engage in forestry in state-owned multiple-use forests. The company does not own the forests, which remain the property of the State. Metsähallitus Forestry Ltd is responsible for fulfilling its general social obligations, such as ensuring natural diversity and promoting recreational use, reindeer husbandry, the Sámi culture and employment, in the same manner as Metsähallitus has done in the past.

In June, the Government appointed Pentti Hyttinen, Ph.D. in forest management and economics, as Director General of Metsähallitus (to succeed Esa Härmälä) and Timo Tanninen, Director General, Master of Forestry, to succeed Rauno Väisänen as Executive Director, Parks & Wildlife Finland. They began work on their positions on 1 September 2016.

As a result of these changes, Metsähallitus’ strategy was renewed.

Operational objectives renewed

The Ministry of Agriculture and Forestry and the Ministry of the Environment prepared a proposal for a new ownership policy for Metsähallitus. The profit target for operations remains ambitious. The intention is to raise the return on investment to 4.6 per cent by 2020. Based on the current balance sheet structure, this corresponds to a dividend payment target of approximately EUR 120 million, and will require a profitability improvement in Metsähallitus' business operations and the utilisation of sustainable felling potential. This policy supports the goal, defined in the Government Programme of Prime Minister Sipilä’s Cabinet, of increasing the use of wood by 15 million cubic metres per year.

Fostering biodiversity and the promotion of recreational use are an important part of these policies.

  • In business operations, the level of social obligations will at least remain as before: various degrees of use restrictions apply to approximately 530,000 hectares of multiple-use forest in commercial use, due to biodiversity, recreational use and reindeer husbandry requirements.

  • The aim is to improve the productivity and impacts of Parks & Wildlife Finland.

  • The protection level of habitats will be improved in areas used by Parks & Wildlife Finland.

  • Use for the purposes of tourism, recreation, hunting and fishing will be developed on the basis of demand, in order to enhance the well-being effects of various areas and create business opportunities for entrepreneurs.

Wide range of partnerships with interest groups

A multitude of wishes and expectations relate to the use of state-owned land and water areas. In natural resource planning, these are coordinated without exceeding the limits of sustainable use. Natural resource planning is a key tool in this. In 2016, the natural resource plan for state-owned lands and waters in Kainuu was completed and natural resource planning for southern Finland began.

Around 30 local and regional stakeholders and partners in Kainuu and more than 50 in southern Finland participated in the planning process. This cooperation will also help to ensure the preservation of the Sámi culture and the preconditions for traditional sources of livelihood in the Sámi Homeland in northern Finland.

The number of lease and right of use agreements made with various parties in relation to the use of state-owned lands and waters totals around 17,000. The pool of interest groups is vast, with forms of cooperation ranging from trading to guidance, information exchange and interaction. Metsähallitus’ operations accommodate the needs of research and education, and the land use requirements of the Defence Forces and the Border Guard.

 

sidosryhmät


Metsähallitus in Europe and around the world

Metsähallitus cooperates with European forest and park services, and international nature conservation organisations. Metsähallitus is an active participant in the international PEFC forest certification project and Eustafor, the umbrella organisation of European State Forest organisations. Metsähallitus is one of Eustafor's founding organisations.

As part of Finland's environment administration, Metsähallitus is a member of the EUROPARC Federation (the network for Europe's natural and cultural heritage), is represented on various expert commissions of the IUCN (the International Union for Conservation of Nature) and collaborates in nature conservation activities with neighbouring areas in Sweden, Norway, Russia and the Baltic countries.


Business Environment outlook for 2016-2020

The bioeconomy will contribute to sustainable growth:

  • Fossil raw materials are being replaced with renewable domestic wood, the use of which will increase by 15 million cubic metres per year.
  • New forms of business will be developed for the circular economy and in order to promote banks of natural value, the utilisation of fresh water and aquaculture.
 

Energy self-sufficiency is becoming increasingly important

Alternative methods of energy production utilising renewable wind, geothermal and solar energy will be developed.

 

Urbanisation

Urbanisation, particularly the growth of the capital region, will continue. People living in urban areas value local green spaces as important recreational resources: visitor pressure in these areas will increase.

 

The purity of the Baltic Sea

The purity of the Baltic Sea and water bodies in general is valued and their protection is becoming increasingly important.

 

Well-being from nature

Nature is becoming an increasingly important source of well-being and health.

 

Nature tourism

Global nature tourism is growing.

 

Climate change is advancing

Climate change is advancing and the effects are appearing gradually:

  • The rate of forest growth is accelerating.
  • Insect and storms are causing more damage to trees.
  • The poorer condition of the forest road network is resulting in logistics problems for timber harvesting and transport.
 

The concentration of the population in urban areas

The concentration of the population in urban areas may affect the availability of labour force and impair the maintenance of infrastructure in remote areas.

 

Advancing digitalisation

Advancing digitalisation is creating opportunities for new forms of participation and interaction.

 

The state-owner’s expectations for Metsähallitus' operations

  • Manage state-owned lands and waters well and increase their value.
  • Produce revenue for the state.
  • Create the preconditions for new measures and activities on state-owned land areas.
  • Protect the cultural heritage and biodiversity.
  • Assume responsibility for supervising the interests of state-owned lands.
  • Provide services and well-being for citizens.
  • Take account of the needs of organisations using state-owned lands (the Defence Forces, research, education).
  • Promote climate benefits in state-owned areas, including forests acting as carbon sinks.
 

Photo: Jari Salonen