Achieving good results together on a united basis
The year 2017 was the first full year of operations under the new act on Metsähallitus. The year was a successful one: the performance target was exceeded and Metsähallitus also achieved the other targets set for it. Metsähallitus can only be successful in its operations if the expectations and needs of its stakeholders can be reconciled.
The development of Metsähallitus, which began in spring 2016 after the new act had entered into force, has progressed as planned. The core activities of Metsähallitus are divided into four units of which Metsähallitus Forestry Ltd and Metsähallitus Property Development are commercial operators. Parks & Wildlife Finland serves as the public administration unit of Metsähallitus and it is responsible for the management of nature reserves, provision of hiking services and game and fisheries supervision.
Good operating result and a strong regional role
The year 2017 was a successful one for Metsähallitus. Metsähallitus Group's turnover was EUR 328 million and the operating result was EUR 105.9 million. We will pay the Finnish State EUR 92.7 million in the public interest from our 2017 profits. Metsähallitus Forestry Ltd will also pay EUR 5.4 million in taxes on its profits.
Of the business units, Metsähallitus Forestry Ltd had a turnover of EUR 296.7 million and reported an operating profit of EUR 26.5 million. Metsähallitus invested a total of EUR 37 million in biodiversity in state-owned multiple-use forests.
The result for Metsähallitus Property Development in 2017 was EUR 16.5 million. Growth in tourism boosted plot sales during the year. As the party responsible for the development of the wind power projects in state-owned land, Metsähallitus Property Development also contributes to the achievement of renewable energy targets.
With its business units and by providing public administration services through Parks & Wildlife Finland, Metsähallitus generates significant economic impacts at regional level. The timber felled in Metsähallitus-managed forests accounted for about EUR 1.8 billion of the gross value of the production of the Finnish forest industry and it generated about one billion euros in export revenue. A total of 3.1 million visits were made to Finnish national parks in 2017. Visitors to national parks and state-owned hiking and cultural heritage areas brought EUR 258 million to areas adjacent to them. The total income impact of wilderness visitors totalled nearly EUR 43 million.
Metsähallitus played a prominent role in the arrangements of the events to celebrate the centenary of Finnish independence. The Nature Days, inauguration of the Hossa National Park and Bio Era Tour for young people were the highlights of the year. We also took part in the organisation of the campaign ‘My nature gift to the centenarian’, which had been launched at the initiative of Kimmo Tiilikainen, the Minister for Housing, Energy and the Environment. As a result of the campaign, private landowners established private nature reserves totalling 3,064 hectares, and Metsähallitus pledged to protect an equal amount of state-owned land.
Internal development continued
Under the new act on Metsähallitus, its new strategy and the new rules of procedure, Metsähallitus is now more clearly a single organisation. We revised the policies guiding our operations and updated our values in cooperation with the personnel. Regional management groups provide a regional perspective to decision-making.
We made structural arrangements in accordance with the ownership policy by divesting unprofitable business operations. For example, the forest tree seedling company Fin Forelia was sold to the company's operative management. Administrative tasks were reduced by ten as part of the reorganisation of Group operations.
At the conclusion of the co-determination negotiations on the employment of loggers during the winter months, Metsähallitus Forestry Ltd announced that it would lay off most of its loggers for the period. New solutions for wintertime employment of loggers will be sought in a working group which will meet for the first time in spring 2018.
Despite the changes, the motivation of the personnel remained high. According to the results of a personnel survey, employees consider work at Metsähallitus important and the staff members are highly committed. Areas where improvements are desired include the opportunities for professional development and the giving of feedback.
Responsibility and reconciliation
Responsibility as well as equal consideration of the interests of our stakeholders are at the core of our activities. A wide range of different expectations are placed on the land and water areas managed by Metsähallitus and the purpose of the regional natural resource plans is to reconcile these expectations in cooperation with our stakeholders. The natural resource plan for Southern Finland for 2017–2022 was approved in 2017 and the work on the natural resource plan for Ostrobothnia was launched. The plan will be presented in spring 2018.
The work on a responsibility programme for Metsähallitus began at the end of 2017. The purpose of the programme is to determine the responsibility areas that are essential for our activities, how they can be more measurable and how they can make a stronger impact. We are determined to base our responsibility work on best practices and we are committed to the achievement of the sustainable development goals of the United Nations (2030 Agenda).
Multi-objective forest management
Metsähallitus manages state-owned forests with a long-term perspective so that the forests will remain viable, the tree stock will grow, and the forests are used in a sustainable manner on the basis of the multiple-use principle.
As a reliable wood supplier, we are an important link in the forest sector value chain. The renewable natural resources extracted from the forests can be used as replacements for fossil raw materials, and wood is used as a raw material for increasingly innovative bioeconomy products. Well-managed multiple-use forests also act as important carbon sinks. Last year, Metsähallitus launched the Ilmastoviisas (climate wise) forest management project, in which we are for the first time examining the management of the state-owned multiple-use forests from the perspective of carbon capture and storage.
Forest management issues also caused concern, especially in Kainuu where there was debate on planned cuttings at a number of forest sites. Finding widely accepted solutions requires a dialogue with stakeholders and the acceptance of different types of forest relationships. There was also debate on the changes to the Fishing Act that affected residents in the northern parts of Finland. As the party enforcing the act, Metsähallitus had to respond to the criticism arising from the changes.
We continued to promote biodiversity in nature reserves and in the multiple-use forests. The extensive Hydrology LIFE project was launched last year. The purpose is to restore peatlands and streams so that they would be closer to their original state. Positive results have been achieved in the protection of species and a good example of these efforts is the Saimaa ringed seal.
Biodiversity in the multiple-use forests is promoted by means of retention trees, landscape ecological network and active environmental management measures. The updating of the landscape ecological network was started from Lapland and this year the work will also continue in Kainuu. Metsähallitus Forestry Ltd also started the updating of its environmental guide and the work will be completed in spring 2018.
The future looks good
High expectations will also be placed on Metsähallitus in the future: we must operate in a sustainable and responsible manner and, in accordance with the policy decisions of our owner, our operating profit must be at least EUR 120 million by the year 2020.
We possess extensive expertise as a broad-based bioeconomy operator and we are determined to be a partner when solutions are sought to global environmental problems. State-owned land and water areas generate a wide range of different benefits and there is increasing demand for them. I believe that we are well placed to meet the expectations of Finnish society and our stakeholders. We can only succeed in our work if we listen to our stakeholders and engage in a continuous dialogue with them and keep own expertise up to date.
Photo: Olli-Pekka Orpo