The investigation studied the conditions on which business economics of large-scale forestry, mainly in the state forests, operates. It gives an overview on the economic geography of the state forestry in Finland, including the location of forest industry units and purchase of raw materials in relation to the state forests. The calculations are based on the of the financial performance of the districts of Forest Service in Finland.
The state forests are situated mainly in Northern Finland. Only 6% of the forests were situated nearer that 10 km from the nearest railroad, floating channel or business center. The size of forest districts decreases from north to south and from east to west, which affects the intensity of felling and the economic result of the districts. On the account of the remote situation of the forests of the state the amount of timber felled has been considerably below the growth of the forests.
During the period of 1924-1943 annual cut in state forests decreased in Northern Finland, stayed in the same level in the east and increased in the west. Proportion of large-sized timber of the sales decreased, while the sales of piled pine wood, mining timber and sulphate wood increased. The economic result of state forests was in average modest, reflecting the economic result in the northern districts were the most state forests are located. However, the financial results of the state forests were not less good than those of other forests under similar conditions of economic geography. Proximity to floating channels and especially railways increased the effectivity of fellings. Railways made it possible to harvest also small timber that is difficult to transport by floating, thus increasing the felling volume. Finally, means to improve profitability of state forests are discussed.
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