When I look back, I realize that all standing, old log structures in Finland are some sort of manors or churches. To less degree, there are some other buildings but almost to no exception, they are in poor condition. Why is this?

Log homes were popular because it was easy to fell trees and stack them as a log home. Sawing was impossible because of the inadequate tools. What made the difference were the building location and artisan skills. Farmers and hunters built lone log cabins all over Finland’s forests. However skilled they were, they weren’t master builders and their log cabins tended to rot away.

When important building was in question, master builders did their very best. These log homes and log buildings were also investments, therefore it was sensible to keep maintaining them even it was expensive.

Locations were also different from moist forest clearings. Important log buildings are located on hills and they are built on stone or rock foundation. This way log home can stay dry and solid.

These two principles are still valid today. It is fairly cheap to have a log home frame, but it is expensive to have professionals working on it and to locate it on solid and high foundation. I will soon write more about choosing a good location for log home in the article series, but for now – have a nice day.

There are two main reasons for troubles for Finnish sawmills. Firstly, price of wood has risen slowly and now comprises 72% of the price of any finished sawed product. Secondly, basis for timber income taxation changed from land area based taxation into sales based taxation. Together these result into diminishing timber sales and rising timber prices, which in turn result into diminishing production and lower profit margins.

How to get out of this vicious circle before everybody in the industry have gone bankrupt? According to analysts the answer is by increasing the value of finished products. How to do that? To my opinion, log home companies stand at better place as value adders for wood than pure sawmills…

Finnish paper mills have been pushed into corner. Traditional cycle of currency devaluations in order to improve paper companies’ competitiveness has come to an end because of Finland’s European Union membership. Now it is the company that has to change instead of the currency value.

Finnish paper companies have been pushing hard to get in shape. Investments have been done near end markets and remote Finland has lost its importance as a production location. Right now the unimaginable is happening. United Paper Mills has announced massive downsizing programs, which focus especially on Finland.

Arrangements in the use of capital are another road that most paper companies are taking. Properties are sold to garner money to be invested in core functions. This in turn affects sawmills. There are lots of sellers but few buyers. Moreover the logging industry has been on the red for five continuous years and things are not going to get better any time soon.

Where am I getting at? Demand for various timber products in Finland is about to drop and that means business for log home manufacturers, which can benefit from lower raw material prices.

Kauppalehti – the biggest economic newspaper in Finland had overly positive look on the future of log building in Finland. This resulted in 16% increase in stock price of Honka B-share. Increase is out of proportion because the ownership of Honka is very centralized and trade volume is low so few sales can rock the price greatly. On the other hand, Friday saw exceptionally high trade volume, totaling 25 million euros.

I am not as optimistic, I think that growth trend remains steady, but there will be increasing competition at every market area. Globally low interest rates have saturated house ownership market and while big domestic markets are saturated, the growth can be found from export markets. My take on the matter is that log home company can only be successful by excelling competition and eating market share. What do you think? You can check Honka financial information at Google Finance.

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