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Jobs arise from ashes of Finland forestry industry

When Finland's UPM-Kymmene bowed to tough market conditions and shut its Voikkaa paper plant two years ago, Raimo Loytty readily swapped a 30-year career in the mill for a stone mason's chisel.

Posted: Thursday, January 17, 2008, 8:44 (GMT)
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The painter-to-be said while the career change will mean a drastic cut in income, losing his job at UPM gave his life needed structure as he swapped shift work for a day job.

"This has been an opportunity for me. I doubt I would have changed career otherwise."

Like its people, the town is reinventing itself.

Out of the 678 laid off in the Voikkaa closure, only about 160 are still out of work, 50 are in training programmes and some 20, like Loytty, have started their own businesses.

"The employment situation in Kuusankoski has been rather good," said Marjukka Matikka of the regional employment office, adding that most who have found new work still live in the town.

The UPM facility has been re-named the Voikkaa Business Park and is home to 17 businesses, including the workshop of Loytty and his partner. More are set to move in.

In October, Swiss engineering group ABB said it would hire 40 people at a new component plant there due to start production during the first quarter of this year.

"We want to find new use for this industrial area," UPM's property manager Hannu Lahtinen said. "We want to take part in developing employment in Kuusankoski."

The town's jobless rate was 10.9 percent in November, up from a year-earlier 10.7 percent but a clear improvement from the 13.1 percent in December 2006 when UPM paid its last wages.

DOWNWARD TRACK

The reinvention in Kuusankoski mirrors a broader trend in Finland, where metals, machinery and electronics have overtaken wood and paper as the country's dominant exports.

The timber industry suffered a steep reversal since the golden 1990s, when prices were so high that media mogul Rupert Murdoch paid a 1995 visit to Helsinki to "beg for paper."

Seduced by the strong market, many European paper producers overexpanded, which has only fed the price decline since 2001.

"The companies started to build up capacity in the turn of the century encouraged by growing paper demand," said Evli Bank analyst Teemu Salonen.

According to research group RISI, paper prices fell some 19 percent in North American markets in 2001-2002. In Europe, prices dropped about 20 percent from 2001 until 2005.

Meanwhile, wood, energy and labour costs have risen, eating up savings reached through cost cuts.

However, as the forestry sector has contracted, other industries have stepped into the breach.

According to 2006 data, some 34 percent of Finland's exports were metal and machinery products, 25 percent electronics products and 20 percent forestry products.

Spurred on by Nokia, Finland's largest company and the world's biggest mobile handset maker, electronics has been on a particularly strong growth track since the 1990s.

Loytty said the economic transformation of Kuusankoski may yet prove precarious since many of his colleages have found only temporary replacement jobs.

"A year from now will show what the situation really is like," he said.



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