Review by the Director General

After a year of decision-making, it is time to move forward together

The year 2016 was lively and eventful for Metsähallitus. Metsähallitus performed well, despite major changes. Our skilled and highly professional work yielded great results in forestry, nature conservation, property development and the recreational use of Metsähallitus’ forest and land areas.

2016 was an eventful year at home and abroad. The new Act on Metsähallitus entered into force in the spring, a new Director General and Director of Parks & Wildlife Finland were appointed, and the State ownership policy for Metsähallitus and its strategy were revised. Global winds of change blew in on many fronts, including the UK’s Brexit decision and the presidential election in the United States.

A lively, downright passionate debate arose concerning the revised Act on Metsähallitus. This is a clear indication of the importance of state-owned lands and waters for Finns, and is very gratifying. We at Metsähallitus place a high value on our work. The ongoing implementation of the new strategy revealed that our staff regard relevance to society as one of the most valuable aspects of their work.

The key change due to the new law was the incorporation of the Forestry unit into Metsähallitus Forestry Ltd. The company now has the exclusive right to engage in forestry in state-owned multiple-use forests. However, it does not own the forests, which remain the property of the State. The purpose of this arrangement was to organise the state-owned forestry business in a competition-neutral manner and in compliance with EU regulations, so that the business can remain in government ownership. National parks, wilderness areas and other protected areas remain in their current use and continue to be managed under the guidance of the Ministry of the Environment.

A range of other benefits in addition to money

Metsähallitus Group’s turnover for 2016 was EUR 333 million; very close to the EUR 337 million in turnover for the previous year. Excluding non-recurring expenses, the adjusted annual result was EUR 107 million; about four million euro above the budget target. However, additional pension contributions and other non-recurring items resulting from the change in legislation reduced the result to EUR 94 million.

For the period of validity of the former Act (1 January–14 April 2016), Metsähallitus paid EUR 10 million in dividends to the Finnish State. For the rest of the year, the enterprise’s Board of Directors proposes a payment of EUR 86 million to the state in the public interest. Additionally, Forestry Ltd pays taxes to the state on its profits.

Parks & Wildlife Finland has a major impact in addition to our business activities. The funding used by this unit reached EUR 63 million last year.

Metsähallitus’ business is an overall activity whereby, for every two euros generated, non-monetary benefits worth at least one euro are created for the state. The legislative amendment had no effect on Metsähallitus’ social obligations; the recreational use of multiple-use forests in commercial use, the protection of diversity, and the preconditions for reindeer husbandry on state-owned land will continue to be taken into account as before.

In 2016, the financial input for these social obligations totalled EUR 56 million. Without these, the operating result would have been an estimated EUR 56 million higher.

Vitality for regions

Metsähallitus' activities have a wide range of indirect economic impacts that generate both employment opportunities and money for the regions. In 2016, national parks were visited more than 2.8 million times; an increase of 7 per cent on the previous year. In the case of all 39 national parks, the local impact of visitor expenditure on total income and employment amounted to EUR 178.9 million and 1,774 person-years of work. The economic impact of visitors’ expenditure on the neighbouring regions increased by 21 per cent year-on-year.

In business activities, Metsähallitus’ Property Development (Laatumaa) provided major momentum for the development of two key tourist destinations, Ruka and Saariselkä. The commencement of land use planning in eastern Ruka will provide an important stimulus of growth for the entire tourist centre.

Forestry Ltd, the unit responsible for Metsähallitus’ primary business, achieved its goals. The sales volume of commercial timber was 5.9 million cubic metres; roughly the same as in the previous year. Timber harvesting, transport and some forest management work is carried out by entrepreneurs. In 2016, Metsähallitus’ pool of contractors included around 420 forestry businesses that employed 2,000 people. Tourism and recreation in nature conservation and hiking areas also provided work for entrepreneurs, both in tourism and the maintenance of sites.

Management measures helped endangered species

Metsähallitus’ high-quality nature conservation work to improve biodiversity was successful: for example, populations of endangered species such as the Saimaa ringed seal and the white-backed woodpecker have strengthened as a result of excellent conservation efforts. According to a 2016 review, the situation was good in most habitats of species requiring urgent protection, even in multiple-use forests.

The inland water protection project, Freshabit-LIFE IP, was the largest of the several large-scale LIFE projects launched last year. Financed by EU LIFE funding, this project, the largest ever integrated LIFE project in Finland, involves developing new methods for the management of Finland’s water heritage in collaboration with partners.

Nurturing natural values is beneficial not only for species in the natural environment, but also for us as users of nature. For example, management of fishing waters will strengthen the wild and native fish and crayfish populations, which will in turn enhance the fishing opportunities available for fishermen. This will also support the local economy. In 2016, hunting and fishing on state-owned land and waters contributed more than EUR 40 million in revenue and 249 person-years in employment.

The future is created together

Finland’s 100th anniversary year, 2017, is the 158th year of operation for Metsähallitus. We are an integral part of society. We want to develop society together.

In southern Finland and Ostrobothnia, this work involves natural resource planning. Together with dozens of stakeholders, we are striving to find ways of using the state-owned land and water areas in these regions to improve well-being in society in an ecologically, economically and socially sustainable manner.

Innovations in bioeconomy hold out the promise of a good future, even for Metsähallitus. State-owned land and waters involve a huge amount of potential: in addition to timber production, energy, food, other natural products, and the well-being and health services provided by nature lie at the very heart of the bioeconomy.

Metsähallitus is in a better shape than ever before to manage and develop our national heritage successfully. We are implementing our new strategy of leading the way in the diverse bioeconomy, together with our staff. Internal processes have been developed to comply with the new Act of Metsähallitus, in order to function even better than before.

According to the results of a stakeholder survey, Metsähallitus still has a good reputation for corporate responsibility. 79 per cent of stakeholders are of the opinion that Metsähallitus is able to secure a stable return on state-owned lands fairly well, or very well. I would like to thank our staff for their outstanding efforts. Let’s continue moving forward together!

Pentti Hyttinen
Director General


Photo: Kaisa Sirén