The Perpetual Motion Iisveden

Iisveden Metsä is a unique company among Finnish sawmills. Its century-long history, the stability of its ownership, and its ability to always meet the demands of the time set it apart from all others. A hundred years is a long time in the sawmill industry, where the threshold for starting up hasn't been impossibly high, but the end can come quickly.

The establishment of Iisveden Metsä is the result of cooperation among forest owners in the area. The founders came from Suonenjoki, Karttula, and Vesanto. In hindsight, it's impossible to say to what extent the company's founding was self-driven and how much influence the Forest Owners' Forest Centre, established a few years earlier, had. In any case, a large number of forest owners from the surrounding area took responsibility for getting the company started and financed the initial investments. The founding meetings were held in 1923, and our own sawmill was operational by the end of 1924.

Iisvesi was already a sawmill village before the establishment of Iisveden Metsä. It was known for its sawmills and its port. Due to extensive log drives, the junction of extensive waters and the railway had one of the busiest inland ports in the country. The need for labor was so great that workers came to the sawmills from all over Inner Finland, even from Ostrobothnia.

The significance of sawmills as a source of wealth in newly independent Finland was considerable. In the early 1920s, 90 percent of our country's exports consisted of sawn timber, pulp, and paper. The revenue generated by wood processing was the highest among individual product categories.

A significant change in Finnish forest ownership occurred during the early stages of the sawmill by the Jauholahti bay. The number of private forest owners in our country doubled when, in the 1920s, landless tenants were liberated, and forests acquired by industry were returned to private individuals as required by law. At the same time, extensive educational efforts began, aimed at all forest owners. The goal was to change attitudes so that tree fellers gradually became forest growers. This direction was influenced by both legislation and increased information dissemination and the establishment of forestry promotion organizations. The most important reform was the Forestry Act of 1928, which defined the principles of rational forestry for the following decades.

As owners began to understand the value and possibilities of forests, they also began to pay attention to the marketing of wood and the income derived from the forest. With its own processing plant, the entire benefit of the forests was to be returned to its owners.

Iisveden Metsä has brought additional competition to the timber market in an area already characterized by strong demand, benefiting forest owners. Originally, owners were obliged to give priority to the company among wood buyers. This requirement has been abandoned, partly because not all of the owners' wood has been used in Iisvesi for decades. For a long time, the sawmill has been just one company in highly competitive markets. Nowadays, less than half of the processed wood comes from our own forestry department, and collaboration with other forestry companies is widespread.

I would summarize Iisveden Metsä's history in a few key words, factors that have sustained the entire hundred-year timeframe. These basic elements, in my opinion, are courage, commitment, leadership, and the ability to innovate.

Courage was needed especially in the early stages of the company's establishment. The founders had nothing to offer in return for the invested capital except hope that the company would not be in vain. Forest owners had to trust that payment for the felled timber would be received in due course. The first timber sales revenue had to be waited for up to two years.

Commitment has been required from both the company's management and its employees. In the company's startup phase and during the economic downturn of the 1930s, the members of the management personally guaranteed the company's debts. Many would have lost significant fortunes if the sawmill had not survived the hardships of the 1930s. Employees demonstrated their commitment by agreeing to wage cuts during the same difficult period. Their loyalty is also evidenced by their long careers with the company.

Owners have also demonstrated commitment by remaining behind the company for several generations. The return on invested capital has been very modest over the decades. New capital has been raised sparingly through share issues, most recently in the late 1980s.

The only significant disruption among the owners occurred during Finland's casino economy era. At that time, Iisveden Metsä was the target of a takeover attempt, and some of the old owners sold their shares. The company's free capital was barely enough to fend off the takeover attempt.

Leadership has been primarily required from the company's executive management and key administrative personnel. Long careers have been typical in administration, with some lasting over 40 years. The executive management can be described as entrepreneurial. The position of the CEO has always been so strong in Iisveden Metsä that they have been able to operate almost like a private entrepreneur. Traditionally, the CEO has also served as the chairman of the board in the company. With a hundred years of experience, it can be said that the supervisory board has repeatedly succeeded in its leadership selections.

The ability to innovate has been a key factor due to technological advancements. A particularly strong transformation occurred towards the end of the last century when the adoption of the latest technology significantly improved productivity. These transformative years have required bold investments, for which the company has been fortunate enough to have the capacity.

In the company's life, there have been periods that are retrospectively seen as times of strong progress, and, conversely, phases that had to be endured. Particularly strong periods of construction were experienced at Iisveden Metsä in the 1920s, the early 1950s, and the 1990s. Even the last ten years have been a time of significant growth and development.

The most difficult transitional periods in the company's history were in the early 1930s when the existence of the entire company was in jeopardy. The wartime was, of course, a trying time for the company as well. Later, financiers made the company's situation difficult, especially in the 1980s. The need for development was already clearly visible then, but the opportunities for renewal were almost nonexistent.

The sawmill industry is highly cyclical, and fortunately, there have been successful periods in the company's history. Good economic conditions have typically been remarkably short, so the company has never been able to rely heavily on them alone. The company must constantly innovate to remain competitive.

Sawmills have been the most significant factor in the landscape of Iisvesi. At its best, there were as many as four operating sawmills in a small area. The renowned Kolikkoinmäki area was also built by sawmill workers in its time. Large timber rafts and sawn timber pilings visible in the environment. This phase ended abruptly in the late 1980s when transportation shifted to rubber wheels, and air drying of sawn timber was discontinued.

In the Finnish timber market, it is very unusual for the supply of logs to exceed demand. During difficult times in the sawmill industry, the desired decrease in timber prices has also led to a reduction in supply. Even Iisveden Metsä has not always had smooth timber procurement, although the company has been under the control of forest owners for decades.

Iisveden Metsä was established to strengthen forest owners' position in timber trade. The fact is that timber buyers had, by various means, jointly sought to control timber price development. Company-to-company agreements kept prices reasonable during weak economic times, but the situation changed as the market improved. For a long time, such agreements were completely legal, even mandated by the government during the wars. Nowadays, joint price agreements and exchange of price information are strictly prohibited.

Price agreements were usually entered into by larger companies, but the impact of smaller ones, especially in their local areas, was sometimes significant. Statistics have shown that Iisveden Metsä has had a price-strengthening effect on timber in the area at many points in its history.

In the history of Iisveden Metsä, a quarter is 25 years. It has been customary to present the company's history in a book every 25 years. This is now the fourth history book. The first was written by Aksel Markkanen, the principal of Suonenjoki High School, and the next two by Lauri Palomäki, a history teacher at the high school. I got the pleasant task of writing this one when my term on the board ended. My thanks to all who helped me with my work and to the board members and employees of the company whom I interviewed.

Suonenjoki, 15th March 2024

Antti Äijö

the first decade

More Income From Forests

the establishment of iisveden metsä oy was significantly influenced by the cooperative idea and the forest owners' aim to get a better price for their wood. Initially, the plan was only to collect wood for joint sales, but the need for processing became apparent quickly.

Experiences from the recently ended war showed that timber companies and private entrepreneurs in the field, known as "kulassis," did not hesitate to use any means to buy forest wood as cheaply as possible. Wood sellers had no way to defend themselves when companies colluded. Forest owners hoped to achieve the best prices available on the market by taking processing and trade into their own hands.

Education aimed at forest owners and newspapers of the young interest organization, especially Maaseudun Tulevaisuus, enthusiastically reported on poor timber trade experiences they became aware of and the blessings of cooperation among forest owners.

"Especially the great forestry commercial shortcomings of the First World War and our own War of Independence and the time that followed made minds ripe for cooperation initiatives. Since there was no regulation or control in this field from the authorities, forest owners, who were burdened by economic concerns, were completely at the mercy of the fixed purchasing rings of the forest industry and all kinds of heartless speculators. More clearly than ever before, the only solution was seen in cooperation and strong commercial activity of their own," wrote Antero Piha in his history of the Metsäkeskus Oy.

Forest owner cooperation initiatives were launched across the country, but they received the most response in eastern Finland. Iisveden Metsä Oy was founded and owned by local forest owners from the beginning, but the initiative to start the company came from outside the locality. The starting shot for all the sawmills of forest owners that began operating in the 1920s was actually given at a meeting held in Savonlinna in 1919, where the initiative was led by, among others, A.I. Savolainen, a forestry advisor to the Kuopio Agricultural Society. The meeting was followed by the establishment of the national Metsäkeskus, and Savolainen became the first paid employee of this company.

Thanks to the efforts of the Metsäkeskus’ enthusiasts, forest owners' joint companies were established in North Savo and other provinces. The nearby Pielaveden Metsäosuuskunta and Kallanvesistön Metsä Oy were established a little later than Iisveden Metsä. Both sister companies in the province could only operate for a short time due to a lack of capital. In Suonenjoki and neighboring parishes, commitment to their own sawmill was stronger, and thanks to the personal contributions of the administration members, the company managed to get through the difficult years ahead.

The embedding of cooperative ideals in wood processing did not proceed quite easily. Support for forest owner joint ventures was sought from the Pellervo Society, but the organization's powerhouse, Hannes Gebhard, was skeptical. He doubted whether forest owners' capabilities would be enough to compete with large timber companies. Support for forest owner cooperation from Pellervo was only obtained when the chairman of the board, F.M. Pitkäniemi, became its supporter.

The Central Union of Agricultural Producers and Forest Owners (MTK) strongly supported the establishment of forest owners' own sawmills, but the Finnish Forest Industries Federation saw the establishment of the Metsäkeskus as troublesome. The intensification of forest owners' cooperation was not welcomed, especially when one of the significant activities of the association in its early years was the export of pulpwood abroad, to direct competitors of Finnish industry.

Forest owners' companies were downright despised among other entrepreneurs in the industry. Capital circles mocked them as “sour milk companies" or “sour milk sawmills," presumably meaning that the companies' capital was collected from milk accounts. It is likely that this is the origin of Iisveden sawmill still being called the “Piimä” (sour milk) sawmill by older generations.

The original aim of the Metsäkeskus, established as a national central community, was not to directly increase wood processing. The purchased wood was intended to be partly forwarded abroad and partly to be processed by existing domestic companies. However, in the provinces, establishing their own sawmills was seen as the best way to increase revenue from wood. Originally, Metsäkeskus sold and forwarded both round and processed wood, but a few years later, sawn timber for export became its most important product.

Many milestone dates

There are several options for justifying the celebration of Iisveden Metsä's milestone. The year 1924 is considered the start of the company's operations, but the founding meeting of the joint-stock company was held the previous year, and the purchase of timber began in the autumn of 1923.

The initial impulse for the sawmill operation covering the whole Inner Savo area came from a meeting held in January 1923 at the Suonenjoki Youth Association's house. The meeting was attended by 60 forest owners and forestry professionals from Karttula, Kuopio, and Suonenjoki. The meeting was chaired by farmer Lauri Vilpponen, who later became the first CEO of the company.

At the meeting held on September 18th of the following year, which was actually the one leading to the establishment of the sawmill, there were 27 participants at the Suonenjoki Cooperative Dairy. This group was already seriously preparing to put the company into operation. The company's share capital was fully subscribed, and its first board of directors was elected. The chairman of the board of directors was Emil Vehviläinen, the owner of Onnela farm, who held the position until 1965. Forest owners actively participated in the subscription of shares, but obtaining money for the subscribed shares was a much more significant task.

Despite everything, the founding year of the company is generally considered to be 1924, when it was registered in the trade register. The purchase of timber had already begun the previous year, but there was no sawmill of its own. The purchased logs were sawn into lumber elsewhere for a fee, which caused various problems. When it was seen that it was not reasonable to rely on leased sawing in the long run, and there was enough wood supply in the area, it was time to start building its own sawmill. At the very end of 1924, a double-frame sawmill was put into operation in Iisvesi.

The sawmill was designed and supervised in its construction by the expert of the Metsäkeskus, sawmill technician Juho Horsti. His assistance and advice were used many times later in technical matters of the sawmill. Construction progressed rapidly, and sawing of logs could begin at the turn of November and December 1924. The investment in the sawmill was so expensive that the company's own collateral was not enough for financing. Paavo Maukonen, the owner of the Saita farm located in Karttula and a member of the company's first board of directors, allowed his estate to be used as collateral for these loans.

One of the original principles of the company was that it primarily produced lumber for the needs of its own area. A planer was soon acquired for products to be sold in the local area as well. The excess processed timber, as well as roundwood for export, was transported by rail to the lumberyard and processing facility of Metsäkeskus in Kotka port.

The establishment of the sawmill coincided with an economically favourable period. Reconstruction had accelerated, and market recovery had gained momentum after the First World War, particularly in 1923, and there were profitable years until 1928. Forest owners saw the price of wood rising. The increase was quite cautious, but between 1925 and 1928, prices paid for wood in the company's deals rose by about 20 percent.

In 1924, Finnish sawmill industry's exports reached the milestone of one million standard (4.7 million cubic meters). Lumber was the most important export product of the forest industry for a long time.

Not a walk in the park

The establishment of the forest owners' own sawmill had probably been discussed among the hosts for some time. It was not obvious that it was worth building a new processing plant when there were already functioning sawmills in Iisvesi. The most significant enterprises, Kymiyhtiö's sawmill and Peura's sawmill, processed wood near good water and railway connections by large waters. Other sawmills in Suonenjoki included at least those in Soitunlahti, Tenhanniemi, and Järvikylä on the shore of Lake Uuhijärvi.

Merchant H. Peura had founded a sawmill in 1896, and in 1908, a plywood factory was built next to it. Kymiyhtiö's sawmill was established in 1907. However, in terms of production volume and turnover, Iisveden Metsä quickly became the largest in the area. In 1926, Peura's sawmill still had more extensive operations, but after that, the sawmill of the company owned by forest owners surpassed it in production volume.

The starting point for Iisveden Metsä's sawmill operations was not the best because there was no railway connection to the new sawmill site in Jauholahti until a branch line to Iisvesi station was completed in 1925. The company acquired land from the Simola estate for the railway area, built the railway at the sawmill's own expense, and for the first few years, the company was also responsible for its maintenance.

The established Iisveden Metsä Oy was operationally close to cooperative principles. Forest owners were supposed to buy the company's shares in proportion to their forest area, and shareholders' voting rights were limited. No shareholder could use more than six votes at the general meeting during the first decades. In addition, transfers of shares to new owners had to be approved by the board of directors. This procedure, still in force today, has helped ensure that external competitors cannot easily take over the company.

In the early stages, the company's timber deals were brokerage deals, and the main sales products were firewood and props. The few purchased logs were sawn by other entrepreneurs in the first few months and then sold on. The payment to wood sellers consisted of the difference between the raw material acquisition price and the selling price of the final products, from which the company charged a 10 percent brokerage fee in the first years. Sellers had to have strong trust in their company because for the first couple of years, settlements were made almost two years after the receipt of the wood.

Capital was a scarcity for Iisveden Metsä from the beginning. Brokerage would have been a good way to reduce the amount of committed capital, but the pressure for faster settlements became too strong. Competition for wood with other buyers led to the fact that payments to forest owners could not be postponed far into the future. In this situation, Metsäkeskus became the financier of the wood payment overruns.

On average, the sawmill industry was profitable throughout the 1920s, peaking in 1927 according to Jorma Ahvenainen, who studied the history of the industry. The payment of dividends by companies was a sign of success. Iisveden Metsä paid dividends for the first time for the year 1925, amounting to 7 percent of the share capital. The return received was an important sign for those who had invested in the company that their money was not wasted.

The tight control of Metsäkeskus

The umbilical cord of Metsäkeskus, an organization striving to become a national influencer, to all subsidiaries established in the country was remarkably tight for about twenty years. The control was detailed and strict in practice as long as the parent company was in operation. Cross-ownership strengthened the bond: Metsäkeskus owned a large majority of Iisveden Metsä's shares, as well as those of other subsidiary companies, for a long time. At the same time, Iisveden Metsä was partly obligated to invest its share in Metsäkeskus’ share issues.

Due to several financing arrangements, Metsäkeskus held up to nearly 90 percent of the sawmill company's shares at most. However, decision-making power remained local, as the voting rights of shareholders were limited at general meetings. Almost invariably, a representative of the parent company was present at the general meeting until the late 1940s.

Due to the lack of capital, Metsäkeskus’ operations began cautiously with the trade of firewood and other small timber. However, as forest owners increasingly demanded the sale of larger timber and finished lumber, caution had to be set aside. Originally, subsidiary companies were supposed to own and finance Metsäkeskus, but soon the financing situation turned the other way around. Through guarantees and loans, Metsäkeskus committed itself to the capital maintenance of the subsidiaries for the entire duration of its operation.

In the practical operation of the sawmill, the influence of Metsäkeskus was crucial in the early years. Metsäkeskus collected sales revenues and financed timber deals; annually, the amounts of logs to be purchased were agreed upon, and mostly also the prices. All lumber for export was sold through Metsäkeskus. Settlements were cleared afterwards when the money from export deals had been repatriated.

Lauri Riikonen, a strong influencer of the "sister company" Ukkola sawmill in North Karelia, later criticized Metsäkeskus’ operations as burdensome for shareholder sawmills. The fees charged were high, and companies that endured the depression years of the 1930s had to cover the losses of sawmills that had closed during difficult years for a long time.

In the early years, the operating model in timber trade was that forest owners would sell their products to an open account for intermediation. Sellers had to trust their own company so much that they would give up their wood without payment and wait until the final buyer made their payment to Metsäkeskus. This could be done in the first years, but in the peak year of 1927, sellers of timber began to increasingly demand advance payments. At that time, open account transactions accounted for 80 percent, but already the following year, getting them was considered almost impossible. According to contemporary estimates, the faith of timber sellers in their own companies ran out, or perhaps the trading methods of competitors were more appealing. To the relief of forest owners, it was decided to shorten the payment period for timber trade settlements by one year. Settlements for the logging year 1926/27 were paid in July-August 1928.

Metsäkeskus originally had nearly a thousand private owners all over Finland. Later, the ownership base changed so that sawmills became the main owners of Metsäkeskus. Under the auspices of the nationwide company, there were at most 11 sawmill companies, mainly in eastern Finland. Initiatives to establish companies were launched much more, but they dwindled for various reasons. Many companies started their operations with too little own capital, causing insurmountable difficulties when worse times came. After the economic downturn that began in the late 1920s, interest in establishing new companies decreased significantly.

The economic depression of the 1930s severely affected Metsäkeskus and its subsidiaries. After the depression years, only four subsidiaries continued their operations: Iisveden Metsä Oy, Siikajokilaakson Metsä Oy, Pielisen Metsätalous Oy, and Itä-Karjalan Metsä Oy. According to Seppo Zetterberg, a key reason for the poor results of the subsidiaries was that they were originally established with too small capital. In addition, the historian doubted that all subsidiaries had obtained the competent leadership required by the industry.

According to the director of Metsäkeskus, Evd. Heiliö, small sawmills had lower fixed costs and better opportunities to adapt to economic fluctuations as a competitive advantage. Competitors, however, claimed that associations like Metsäkeskus were unable to guarantee the quality of lumber, which was suspected to have an impact on the export price of other Finnish lumber.

Taking control of water transport

The location of Iisveden Metsä's production facilities by a large waterway was a significant advantage for the sawmill. However, the company fully benefited from this advantage only when it had its own fleet for water transport. In 1925, a significant step was taken for log transport when a tugboat was acquired for the company from Sweden. For other transports, the company acquired a horse, with which the site superintendent Tuupainen traveled to construction sites to pay wages and oversee the progress of work.

All timber and lumber transports to Iisvesi railway station were initially carried out by barges by water. This procedure was considered laborious, so plans were quickly made to build a branch line to the sawmill. The company donated the land needed for the railway to the state railways and built the tracks.

Lauri Vilpponen had to resign as CEO due to illness, and he passed away in November 1926. Of the members of the board of directors, director J. P. Heikkinen and bank manager Sakari Rossi temporarily took over the position until Aleksanteri Hiltunen from Kotka was appointed as the new CEO.

After economically good years in the mid-1920s, companies were encouraged to invest. A planer, a drying kiln, and a third frame were quickly built for Iisveden Metsä's sawmill in 1926. A new fast frame and a log lifting crane for unloading logs were acquired in 1926. A male clerk was hired for the cooperative's office, which operated in premises rented from the cooperative.

As operations stabilized and expanded, it was decided to build an office building on the sawmill premises. The "headquarters," still in use today, designed by architect Otto Suihkonen, was completed at the end of 1927.

A hundred years ago, companies had to take responsibility for even the basic functions of society. Already in 1927, the company began to contribute to the salary costs of hiring a nurse for Iisvesi. The following year, the company's contribution was needed to hire an extra policeman for the municipality.

The Company's Future Hung By A Thread

the economic peak of 1927 raised both timber and export product prices high. Then came a long and heavy downturn: demand plummeted, and sawn timber prices sharply declined, remaining low for a long time. The price of logs did not drop as quickly as sawn timber export prices, causing difficulties for many sawmills. The strongest companies barely managed to achieve a positive result, according to Jorma Ahvenainen, helped by the gradually developing markets for by-products. But not everyone fared as well.

Most sawmills operated at a loss between the late 1920s and the early 1930s as sawn timber prices continued to decline. In addition to high costs, the conditions were challenging for several years, leading to prolonged shutdowns. Winters were difficult for harvesting, and there were strikes at workplaces. In key grades, the price drop from 1929 to 1932 was over 30 percent. There were also periods when trade did not even go well at low prices, forcing sawing activities to be reduced accordingly.

The price of logs followed the development of sawn timber prices with a delay; in auctions conducted by Metsähallitus, prices dropped to about half of the 1927 prices by 1930. In addition to the price of wood, wage costs had to be flexible. Sawmill workers' wages were reduced in many places, and salaries of office workers even more. In Iisvesi, savings began by reducing the salaries of office workers and the managing director, and later, the lumberjacks and sawmill workers had to cut their incomes as well.

The Finnish sawn timber export problems were exacerbated by the Soviet Union entering the already competitive international markets as a seller. The increased supply from the eastern neighbor further lowered prices in Europe. However, the disruption did not last long. After capturing their share of the market, Soviet authorities agreed to negotiate with other major producing countries, and prices were brought to a healthier level. In 1935, the European Timber Exports Convention (ETEC) was signed, defining the market shares of the Soviet Union, Sweden, and Finland in the region. Finns succeeded so well in the negotiations that our country got the largest export quota, 36 percent. This obvious cartel agreement remained in force until 1939.

The purse strings were tightened

During the depression years at the turn of the 1930s, many of our country's small sawmills became insolvent or otherwise ceased operations. Representatives of large sawmills lobbied banks at the same time, telling them that there were too many sawmills in Finland and that struggling companies should no longer be financed. In 1932, only 383 sawmills were recorded in the industrial statistics, whereas in the peak year of 1927, there had been over 600 companies.

Banks played a crucial role in the survival struggle of sawmills. As companies' loans matured, significant individuals from the National Share Bank and the Nordic United Bank and some of their executives became significant owners of sawmills. The weakest sawmills were not acceptable to banks either, resulting in bankruptcies. Only four subsidiaries of Metsäkeskus remained in this turmoil.

Finance was a central issue for the continuation of Iisveden Metsä as well. The matter had to be discussed at almost every board meeting, and loans were taken not only from banks but also from private financiers. These did not offer cheap money, and some creditors tried to take advantage of the situation. One shareholder applied to the bailiff for the execution of a loan. The minutes of the board stated that the intention was to cause trouble for the company.

Due to the weak market development, Iisveden Metsä did not pay dividends for the years 1928 and 1929. Due to commercially weak years, loans had to be renegotiated in 1932. Metsäkeskus was involved in the negotiations, which also had to temporarily finance the company when export trade was poor. The consent of Metsäkeskus was required in this situation both for loan disbursements and repayments.

At the most critical stage of the financing problem, the members of the board and the executive board of Iisveden Metsä were each personally obliged to lend the company 10,000 marks. (The amount was equivalent to about 4,000 euros in 2023 prices) In addition, some board members had guaranteed significantly larger loans on behalf of the company. Bills of exchange financing was also needed to cover temporary cash needs.

In 1933, the financial situation tightened to the point where the Central Credit Fund of Cooperative Banks demanded the assets of the board members as collateral for loans. The liability for each member was 100,000 marks. (About 47,000 euros in 2023 prices)

During the most significant problems, companies in the industry sought help from society to overcome economic difficulties. The state granted low-interest loans to forest owners' associations. Iisveden Metsä applied for this to the tune of 3 million marks to pay off high-interest loans.

As the economic situation stabilized, the company could dispense with the guarantees made by the board of directors. Managing Director Hiltunen personally delivered the deeds to the guarantors, stating that one should never again put their name on such papers. (From the recollection of H. Tapio Sivonen)

According to Antero Piha, during the lean years of 1929-1932, Metsänomistajain Metsäkeskus had to finance the operations of its subsidiaries in various ways. For Iisveden Metsä Limited, the key actions of the parent company were share subscriptions and loan guarantees. Many other sawmills needed even more direct support and still did not survive the sharply reduced prices and export slump. Six subsidiaries of Metsäkeskus had to cease operations during these years due to financial difficulties.

Expansion of the operational area

For Metsäkeskus and its still-operating subsidiaries, the years 1934-1938 meant a period of quiet reconstruction, during which the damages of the depression years were attempted to be repaired as best as possible. Economic figures improved year by year, and the financial position of operating sawmills gradually stabilized. In addition to firewood and timber, fence posts and fence poles were introduced for sale when there were not enough sawn logs. Due to poor demand, the price of firewood had to be significantly reduced at the most difficult times.

The operational area of Iisveden Metsä expanded dramatically when Pielaveden Metsäosuuskunta ceased its operations in 1929 due to financial difficulties. Metsäkeskus aimed for a merger between Iisveden Metsä and Pielaveden Metsäosuuskunta, but this was not agreed upon in Iisvesi. As a result of the merger, the company would have taken on significant additional debts.

In the settlement of the Pielaveden company, the members of the cooperative were supposed to become shareholders in Iisveden Metsä, and the cooperative's "fleet" was purchased by Iisvesi. At this stage, the company's wood procurement area increased significantly. Only a few disappointed forest owners from Pielaveden were willing to become shareholders in Iisveden Metsä. To stabilize the company's finances, a significant portion of the needed increase in share capital was taken over by Metsäkeskus.

In 1933, it could be noted that the upturn in the sawmill industry had begun. Sawn timber production in Finland had already reached 5 million cubic meters, and the annual volumes continued to increase from this level. Changes between the years were significant: 1934 was a good year, but the next one was weaker. After a couple of better years, oversupply of sawn timber pushed prices down again in 1938.

According to Jorma Ahvenainen, who has studied the history of the sawmill industry, sawmills made positive results on average until 1938. However, averages tell only part of the truth; among them were both well-performing and poorly performing companies.

Agreed export quotas on a European scale restricted Finnish sawmills' production when the recession was at its deepest. Sawing had been the most significant contributor to forestry industry export earnings until in 1938, when paper industry exports exceeded the value of sawn timber exports. At this stage, the entire forest industry's exports accounted for 80 percent of the country's exports.

The annual cycle repeated itself

Changes in forests were minimal in the early 20th century. Different tasks in wood procurement were placed at their own points in the annual cycle: buying timber in autumn, harvesting timber in winter, and floating in spring and summer. The willingness to sell timber might be asked from forest owners already in spring after the end of harvesting, but buyers typically started to visit forests and owners towards the end of summer.

The board of directors of Iisveden Metsä typically defined timber procurement targets for the autumn in their August meetings. The start of actual purchases depended on the estimated need for timber based on sawn timber market conditions, the framework provided by Metsäkeskus, and state timber auctions. The timber's approximate price level for each year was formed at the Aulanko and Viipuri timber auctions, which buyers were not used to exceed in private forest transactions.

At times, the prices at state timber auctions rose so high that the company could not buy anything. Suitable locations were not always available for bidding. In any case, participating in auctions was the essence of the managing director's work. During the multi-day events, one could also meet colleagues and follow the industry's development.

The accepted diameter of logs for sawmills decreased significantly during the century. At the beginning of the 20th century, only logs with a top diameter of at least 25 centimeters were suitable for sawing; by the beginning of World War II, the minimum allowed diameter had been reduced to 17 centimeters.

Timber sales were usually conducted by the farm owner, but according to the 1930 Marriage Law, the wife's signature was often also required on the deed. However, the signing of the deed did not necessarily mean the completion of the sale from the buyer's side. It was a common practice for the higher authorities of the company to approve the completed sale. In Iisveden Metsä, the transactions were initially confirmed by the board of directors, later by the executive board, and only from the 1950s onwards by the managing director.

The timber market situation varied greatly almost annually. In 1938, the sawmill was shut down for five weeks in the fall because there was not enough raw material. The following year, there was better availability of logs. The year that had started promisingly was burdened increasingly by the war that had begun in Europe.

Time for reforms

Despite the tight financial situation, it was decided in 1934 to renew Iisveden sawmill to reduce operating costs. New frame saw and edger were purchased from Karhula. As the financial situation gradually improved, the salary of the managing director was also increased to 4,500 marks (about 2,100 euros in 2023 money). At the same time, annual fees for board members could be paid again (about half of the managing director's monthly salary to each).

All produced sawn timber was dried in open-air pilings on the company's premises or at the port during the first ten years of operation. It was not until 1935 that it was decided to build the first drying kiln for the sawmill, following a proposal from Metsäkeskus. At the same time, the power plant had to be renovated. The capacity of the kilns was smaller for decades than the sawn timber production. The pilings disappeared from the sawmill premises finally only in the 1980s.

Significant news for future cooperation and sawn timber marketing came from Varsinais-Suomi. In 1934, Metsäliitto Osakeyhtiö was established there to organize the export of roundwood by forest owners. After the establishment of the new company, it was considered how Iisveden Metsä would respond to a competitor representing the same ideology. Even the idea of a merger was brought up in the board of directors. MTK was strongly behind the founding of Metsäliitto, whose connection to Metsäkeskus was also close. It was natural to think that redundancies should be eliminated.

However, effective cooperation with Metsäliitto did not materialize, even though Metsäkeskus had payment difficulties, partly due to delays in loading ships. Later, new obstacles arose in the way of cooperation, and Metsäliitto began to acquire shares of Metsäkeskus.

Strict financial management continued in Iisvesi even after the mid-1930s. In 1936, the staff wrote to the board of directors to get salary increases. Smaller increases were decided for some work categories but not for all.

The purchase of a car for the company was considered already in the 1930s, but it was not yet timely. The managing director had his own car; otherwise, handling matters would have become very difficult.

The company had run a canteen for the sawmill workers from the early years, but it was decided to close it as unprofitable. However, the canteen's operation could continue as before when the space was leased to the former kitchen manager.

in the shadow of war in the 1940s

Sawmilling Contracted Out Of Necessity

daily life at the sawmill changed completely as the Soviet Union attacked Finland in late November 1939. The forced adaptation to the exceptional circumstances began earlier, at the latest on October 10th, when men were called up for extra exercises. The mill's operations began suffering from a shortage of manpower, and logging fell behind targets. Essentially, all key functions of the company had to be reorganized.

The threat of war was evident well in advance, and preparations could be made to some extent. Nevertheless, it was a hard blow when the extra exercises for the defense forces took the men of prime working age to fortification work near the border. Sawing had already been reduced due to decreased demand for products.

Iisveden Metsä, as a company, participated in various ways in the efforts of the home front. Assistance was provided immediately in 1939 to local branches of Lotta Svärd in the sawmill's area so they could provide provisions for the men going to extra exercises. The company also assisted families of those who later went to the front, with the amount of aid determined by the size of the family.

The threat from the enemy was perceived to be so strong that the sawmill began preparing for air raids from the beginning. It was decided to acquire a machine gun for the company, intended for defense against bombers. Men trained by the Suojeluskunta were requested to operate the weapon, although it's unclear if the requested help arrived at the company's area.

Enemy aircraft bombed the Iisvesi area and the Suonenjoki River in the final stages of the Continuation War in 1944. Apparently, the bombs intended to destroy the railway bridge missed their target and fell harmlessly into the river. The village of Iisvesi itself did not suffer significant damage.

Various precautions were taken in the area due to the state of war. In Iisvesi, assistance was provided to residents in building air raid shelters. The company handed over barbed wire to the defense forces, and the compensation received was decided to be given as aid to the Suonenjoki Suojeluskunta.

A long period of exceptionality

The Winter War was lived largely with the resources of the preceding peacetime. The interim peace was quickly recognized as a temporary phase during which preparations had to be made again for wartime economy. Ahead were over three years of battles and difficulties.

Forests and the forestry industry were, according to Sakari Siltala, a central part of Finland's war effort. In the homeland, forests were needed primarily for firewood, and even though timber exports had greatly decreased, they were still crucial for obtaining foreign currencies. The exceptional time meant that the need for domestic wood increased, and wood was used in more diverse ways than before.

Production needs changed, but it was difficult to purchase wood for the sawmill because prices were regulated. Even the Karttula municipality refused to sell at the "official" price. Significant difficulties were caused by logging and transporting wood to the mill with men of prime working age serving at the front.

With a ban on new construction in the country, the greatest need was no longer for sawn timber but for firewood and other types of wood. Local sawmill companies became suppliers of firewood and logs. The need for logs in transport was high when there was not enough petrol for civilian use. Wood charcoal production was also carried out in Iisvesi.

In 1940, the demand for firewood rose so high that its price exceeded the level of all other timber products. In practice, the stumpage price for wood intended for making firewood was sometimes higher than that for spruce logs. This further complicated the acquisition of logs for sawmills. Nationally, the scarcity of logs was compensated for by increasing the cutting of large trees in the companies' and state forests. However, the availability of these sources of raw material in Iisvesi was small.

The beginning of hostilities meant a gradual transition to a heavily regulated economy. Regulation did not develop quickly; it was supplemented according to perceived needs. In 1942, a record number of obligations and restrictions were enacted for various entities.

At its worst, forestry and wood processing were regulated by over 150 regulatory laws, decrees, or guidelines. However, regulation of timber procurement was almost entirely in the hands of the industry. Timber production and sales were regulated to some extent until 1948.

Due to the shortage of wood, the forestry industry was ordered to establish purchasing consortia, within which regional purchase quotas were distributed. The consortia formed under duress operated for only a couple of years before being replaced by jointly established purchasing organizations for the same purpose. Their primary goal was to ensure the sufficiency of members' raw materials and to keep the rising trend of prices in check.

Export deals fell through

The wartime operations had a decisive impact on foreign trade. Most export routes closed immediately, and the influx of currency into the country decreased significantly. Trade could be conducted with Germany, and forest industry companies that gained access to the German market, according to Sakari Siltala, achieved good results, especially in 1942 and 1943. Germany bought, among other things, sawn timber, for which Metsäkeskus had its own quota for deliveries.

During the armistice, the biggest problem with exports was the lack of transport equipment. Sawing volumes were limited by the poor availability of logs. Disagreements over prices between buyers and sellers were considerable, despite strict regulation. In practice, trade could only be conducted at the upper limits of regulated prices, and even then, it was difficult.

As sawn timber exports decreased, Iisveden Metsä's increasingly important task became the harvesting and trading of firewood. As the war dragged on, efforts were made to produce firewood for smoke box cars and lingonberry boxes for export trade. The production of wooden shoe soles was also planned.

Despite the difficult times, the company considered even further processing. The Board of Directors considered, among other things, the management's proposal to establish a plywood factory. At the initiative of Metsäkeskus, discussions were held about establishing a house factory. Due to scarce resources, both plans fell through.

As the war progressed, regulation tightened continuously, eventually extending to all stages from forest to market. Forest owners were assigned sales obligations, specifying how much and at what price timber had to be sold from the forests. Similarly, companies were given directives on how much timber they could buy, at what price, and at what price products had to be sold.

The Council of State decided on the regulation of sawn timber production and allocation obligations in January 1943. To implement this decision, the Export Sawmills Supervision Community and the Domestic Market Sawmills Central Community were established. Membership in these communities was mandatory, but their operation relied on the initiative of the companies.

The purchases of timber were guided by timber-specific purchasing associations. Those who bought and used raw timber had to belong to a regional purchasing association to obtain the right to purchase timber according to their quota. Quotas were calculated for each company based on their production. However, the wartime exceptional quota was determined by the production quotas set by the authorities. The boundaries of the timber purchasing associations mainly followed the boundaries of water areas. Iisveden Metsä belonged to the extensive Saimaa Timber Purchasing Association, which was managed from Kuopio.

Forest owners campaigned against the associations because they reduced competition between timber buyers. Price control worked due to the activity of regional forestry trade observers. Companies had to justify to the observers how the price of the purchased timber was determined.

Price regulation was strict and monitored. The problem was that forest owners were reluctant to give up their timber at regulated prices. Attempts were made to circumvent the regulations, but the results were not honorable for either party. In 1942, Iisveden Metsä and its managing director were taken to court for paying an overprice for timber. As a result, the company was fined 60,000 marks (15,000 euros at 2023 levels) and the managing director 15,000 marks.

In 1945, Parliament enacted a law on securing timber supply. The law imposed a sales obligation on forest owners. Forced logging threatened if the forest owner did not voluntarily offer timber for sale. At the same time, industry was obliged to purchase timber under penalty of fines. The law was in force for only two years, but during that time it ensured timber availability for the industry and reduced prices.

Forestry Center was seized

After the war, Metsäkeskus began to merge its operations with Metsäliitto Osakeyhtiö, established in 1934. The original purpose of Metsäliitto had been the export of roundwood, but there was a quick consensus among its decision-makers to expand its scope of activities. Negotiations between Metsäkeskus and Metsäliitto regarding the delineation of their boundaries took a long time, resulting in changes also to the position of the Metsäkeskus’ subsidiaries.

As a significant shareholder and financier, Metsäkeskus sought to place its representatives in the management of its subsidiaries to influence the decisions of the sawmills. This caused tensions between the subsidiaries and Metsäkeskus. Without restrictions on voting rights, for example, the voting power at Iisveden Metsä's general meeting would have been overwhelmingly in favor of Metsäkeskus’ representative. For instance, in the general meetings of 1942 and 1943, Metsäkeskus was represented with 1667 shares, while all other participants had less than a tenth of this.

As Metsäkeskus operations changed, it became inevitable for Iisveden Metsä to separate from its parent company. In 1947, the shares of Iisveden Metsä held by Metsäkeskus were exchanged for shares in Metsäkeskus held by the sawmill at their nominal value. Next, the credits received from the Forestry Center were reorganized. The final separation occurred when a new export organization, Metsäntuottajain Teollisuus Oy, was established together with four other sawmills.

In 1948, it was noted that the shares of Iisveden Metsä had ended up in the possession of Metsäliitto, but Metsäliitto was not wanted as a shareholder because it was seen as a competitor. Forest manager Mauno Pakkanen tried to attend the general meeting as a representative of Metsäliitto, but he was denied the right to speak and vote. Rejecting Metsäliitto's ownership caused a conflict in the Iisveden Metsä's board of directors, with two members dissenting from the decision.

In 1949, the timber trade was detached from the financing arranged by Metsäkeskus. At that time, Kansallis Osake Pankki became the financier. In the same year, the shares of the company that had come into the possession of the state and Metsäliitto were redeemed.

Profitability remained

Despite all the difficulties during the war, Iisveden Metsä achieved positive results. Necessary investments could still be made. The economic situation did not become so tight that renovations had to be completely abandoned.

Due to uncertain times, the company changed its timber trade payment practices after the Continuation War began. Sellers received a reasonable guaranteed price for their timber, and an additional price based on their ability to pay was paid later. With this method, economic balance could be ensured, and throughout the war years, a reasonable 6 percent dividend could be paid to the owners.

When the Continuation War broke out, it was decided to once again assist the families of reservists called up for military service. After a few months, these payments were discontinued because no other companies in the area were providing them.

Due to the shortage of men, the sawmill operated at reduced capacity, with only one pair of frames. The company unsuccessfully applied for exemptions for ship crew members and sawmill workers from military service. Even heavy work, such as unloading barges, required female labor.

The combined annual production of Finnish sawmills during the war was about half the level of 1938. The volume was at its lowest in 1940 and rose to almost 60 percent of the pre-war level by 1945.

After the war, almost half of the total sawn timber production remained in the domestic market, whereas before the war, it had been less than one-fifth. Reconstruction required unprecedented amounts of timber. After the war, there were also numerous itinerant circular sawyers in the country, with the most successful ones subsequently establishing fixed sawmill facilities.

Sawn timber export prices developed relatively well during the war years, as there was a shortage of products in buyer countries. The biggest problem was that the export production remained scarce. Between 1939 and 1944, sawn timber export prices doubled, and in 1945, demand and prices literally exploded.

There was discord in the Iisveden Metsä office, leading Managing Director Hiltunen to announce his resignation. He rescinded the decision when the board of directors instructed the office manager to consult and follow the director's instructions in handling the company's affairs.

Recovery took time

The war effort required considerable resources from the entire society. These were obtained from companies, among other sources, in the form of Patriotic Loans, and from forest owners by increasing forest taxes.

Government decisions aimed to curb the accelerating inflation after the war. Nationally, it was decided to keep timber prices at wartime levels. According to statistics, they rose by about 5 percent, as poorly negotiated deals were still prevalent. In Iisvesi, deals were made separately with Paavo E. Maukonen, who was in administration, at a negotiated price.

Wages for forest work rose considerably faster as the end of the war approached than timber prices. The increase was even more pronounced by 1945.

After the war, the main problems for sawmills were the poor availability of raw materials and a shortage of labor. The imbalance between supply and demand also led to cost increases. In 1945, retroactive compensation was paid to workers due to low wages. The amount of compensation varied depending on the duration of employment. Forest workers received an additional month's salary.

Sawmills also participated in war reparations, but the amount of sawn timber supplied for this purpose amounted to just over one million cubic meters. Normal export shipments began in 1945, initially to England, the Netherlands, and Denmark. The following year, sawn timber was shipped to twenty different countries. Trade was restricted by import quotas imposed by several countries.

At the end of the war, timber prices were still regulated, but control gradually slipped away. In 1945, the average price of timber rose by 17 percent. Wage costs rose even more dramatically as the country faced a labor shortage.

Nationwide, there were considerations for organizing compulsory logging to ensure the availability of firewood and raw materials for industry after the war. Another significant issue was the employment of men released from military service. Sales obligations on a farm-by-farm basis were briefly implemented, although they were difficult for forest owners to accept. Abundant logging would not have been willingly done as inflation was soaring rapidly.

The Ministry of Supply reserved coffee, sugar, and tobacco for the efficient packages at forest sites. In total, 1.76 million packages were prepared for forest sites and as prizes for forest campaigns.

The labor shortage was addressed by improving workers' housing. For this purpose, land was purchased in Iisvesi in 1944. The first buildings were completed the following year.

New share capital and change of CEO

After the end of the war, the company's share capital was found to be insufficient. This issue was addressed by the CEO of Metsäkeskus, Ilmari Kalkkinen. It was decided to increase the capital by allowing existing shareholders to purchase new shares for 300 marks and any new shareholders for 600 marks per share. However, the sale of new shares proved to be significantly challenging, taking a couple of years, despite the assistance from the North Savo Agricultural Union and several local communities.

The share issue also involved a change in the company's articles of association, resulting in all old board members having to resign. Aarne Pelkonen, who had a long career in the administration, was then elected as a new member of the board of directors.

Sawmill production slowly recovered after the war because logging of timber did not start quickly enough. This shortage was addressed through large nationwide logging programs. An organization was established to implement the Law on Securing Timber Procurement, with the aim of "making the land better off with wood.”

Due to Aleksanteri Hiltunen's illness, a new CEO was appointed to the company in 1945. Hiltunen would have preferred to stay with the company as an "overseer" if an assistant had been appointed for him. However, the board of directors was not willing to proceed in this manner. The starting salary for the new CEO, Arvo Tanhuanpää, was 17,000 marks, which, considering the change in the value of money, was about 70% of the previous CEO's salary.

Iisveden Metsä also used money for charitable purposes as much as possible. The largest recipient of the company's donations was Kansanapu, an organization that preceded the Joint Responsibility Campaign. The campaign funds supported the families of front-line soldiers, evacuees, war widows, and provided assistance to war veterans and war orphans. After the war, on the recommendation of the Employers' Association, a social work manager position was established in Iisvesi, with the company contributing to the salary costs. The company also supported the establishment of a kindergarten in Iisvesi.

Towards normalcy

The years 1946 and 1947 marked a transition from wartime to "normal" practices. The law on securing timber procurement ceased to be in force, and compulsory timber sales from forest owners were abandoned. The forest industry negotiated a price agreement with MTK (Central Union of Agricultural Producers and Forest Owners). However, the negotiation was not entirely in the hands of the organizations, as there was a threat of government-imposed solutions.

There was a shortage of cars in the years following the war. The company had to apply for permission to purchase a new truck from the ministry. Based on the recommendation of Metsäkeskus, an Austin was desired. Due to import regulations, the company was only able to acquire the car in the 1950s.

The company's employees were mostly honest and reliable. However, in 1947, it had to investigate a situation where one of the forest supervisors had embezzled 120,000 marks worth of timber sales proceeds. This was a significant issue, as it amounted to roughly half a year's salary for the man. The matter was handed over to the authorities, and the man was dismissed from his position.

There were employees in the company who excelled in sports competitions. Jussi Kurikkala, who worked at the sawmill, was supposed to prepare for the Olympic marathon. Upon the request of SVUL (Finnish Sports Association), it was decided to pay him a salary while he was at the training camp. In the London Olympic marathon in 1948, Kurikkala, originally from Kalajoki, finished 12th. He is better remembered as a skier, even a world champion.

In 1949, the former CEO Hiltunen passed away at the age of 62. His widow was granted a pension of 2,000 marks per month from the company's funds (approximately 100 euros in 2023 prices), as well as firewood cut and delivered to her yard.

in the 1950s, there was a roller coaster on the markets

At A Quick Pace In The “korean Boom”

efforts were made to repair the post-war damages as quickly as possible once peace arrived. There was a shortage of everything, so it wasn't until the early 1950s that construction and investments picked up full steam. For a few years, foreign trade was restricted by import quotas and fixed prices set by several countries. As economies strengthened, trade normalized, quotas were relaxed, and prices could be negotiated. The crisis in Korea at the start of the 1950s led to a sharp reaction in prices.

The Korean economic boom was short-lived, and price movements were exceptionally strong. The upturn began towards the end of 1949, but the increase in prices for timber and sawn timber production did not yet have an impact globally. When the Korean War broke out in the summer of 1950, the situation changed completely. Sterling pound prices for sawn timber rose for some grades from 1950 to the end of 1951. However, the supply of timber from forest estates did not develop as quickly, although the rise in stumpage prices was even more pronounced. However, the whole boom was quickly over. Prices collapsed in exports already in early 1952, although there wasn't as rapid a decline in the raw timber market.

There was growing concern in Finland about the adequacy of processed wood, particularly after the reduction of the national forest area due to territorial concessions, and the fact that during the war, forest management had been neglected. Now, forest owners were encouraged to carry out planting and other management activities through nationwide forest marches. Iisveden Metsä also wanted to encourage activity by offering a rotating trophy for inter-parish forest marches.

The merger of Metsäkeskus with Metsäliitto forced Iisveden Metsä to consider new export channels. The idea of a joint venture of five sawmills, Metsäteollisuus Oy, quickly emerged as a good solution. In addition to Iisveden, the participants included Ruukki Oy, Lohjanvesistön Metsä Oy, Ukkola Oy, and Tohmajärven Tehdasosuuskunta. This formed Metsäntuottajain Teollisuus Oy. Iisveden Metsä had a close contact with the sales company when Aarne Pelkonen was appointed as the CEO of Metsäntuottajain Teollisuus Oy.

All ties to the old parent company, Metsäkeskus, were severed only in 1956 when the remaining shares held by the company were sold. Metsäkeskus had ceased operations years earlier, and its production facilities had been transferred to Metsäliitto Osuuskunta's control. In the early 1950s, Iisveden Metsä joined the Employers' Association of the Wood Processing Industry, as membership had ceased to be valid after the separation from Metsäkeskus.

An attempt to take over the sawmill was suspected in the early 1950s when lawyer Aug. E. Nyyssönen applied to register shares that had come into his possession. He was not accepted as an owner because he was not a forest owner. There was strong suspicion that Nyyssönen represented an external party trying to take over the company.

Restless Years

As living costs rose, unrest on the labour market increased in the early 1950s. Strikes occurred at Iisveden Metsä's sawmill in support of wage demands. The strike was attempted to be broken unusually at least twice, but without success. Difficulties also arose in the timber procurement organization. The supervisor of the Karttula district was dismissed when it was revealed that he had made non-existent deals and used the money for his own needs.

The markets, however, seemed good for both timber and sawn timber. The sawmill could operate in two shifts as logs finally seemed to be sufficient. The Korean economic boom quickly raised prices, but not all the benefits went to the sawmill workers because the state levied economic retention.

The Korean economic boom ended as quickly as it began. Already in the autumn of 1951, it was decided to buy timber only in small quantities, and the idea was to reduce sawing if necessary. The following year, the sawmill had to be shut down due to the poor market situation.

The downturn was believed to be short-lived, so the production facility was decided to be renewed by acquiring more frames. "Syvänniemi," a steamship from Saastamoinen Ltd., was bought, but it primarily served as a log barge, as the steam engine was put into use at the sawmill.

Caution was considered best in timber trade in 1952 because the price of logs was too high compared to the export price of sawn timber. The situation was equally bad at the Aulanko timber auction the following year.

The company's financial situation remained reasonably good as long as caution was exercised in the timber markets. At the request of the Savings Bank, a loan of 10 million marks could be repaid from there. There was also enough money to establish a scholarship fund for Suonenjoki Community School. Iisveden Kiri also received assistance, and Suonenjoen Vasama was given timber for the construction of a sports hall.

Market trends were extremely rapid in the early 1950s. It was decided in the autumn of 1954 to reduce timber purchases compared to the previous year. The following spring, sawing was resumed again in two shifts as the market situation improved.

The company owned fields, which were also cultivated. Investments were made in agriculture by renewing the threshing mill and hay barn, which were completely rotten. The crop from the fields was used primarily for producing fodder for the company's horses. Managing Director Tanhuanpää also had his own cow, which was fed with the harvest from the company's fields.

To Haukivuori and back

Near Haukivuori railway station, there was a sawmill with a colorful history. Sawmilling on the shores of Lake Kyyvesi began in the mid-1800s. The production volume was originally comparable to that of Iisveden sawmill, about 5000 standards (just under 24000 cubic meters) per year. Planing was also carried out in the company. After the Second World War, the sawmill ended up in the hands of the Soviet Union, but after a few years, the neighboring country decided to divest itself of all poorly profitable sawmills located in Finland.

Aarne Pelkonen played a key role in negotiating Finnish sawn timber exports to the Soviet Union after the war. During these negotiations, it emerged that the authorities of the neighboring country were willing to divest their sawmill holdings in Finland. Several Finnish companies were selected as buyers. A consortium was formed to purchase the Haukivuori sawmill, with Iisveden Metsä becoming a shareholder in Haukivuoren Saha Oy in 1955 with a 25.25% stake. The other owners at this stage were Enso Gutzeit and Ukkola Oy.

There wasn't much enthusiasm in Iisvesi for acquiring the sawmill in another town, but when the Soviet state withdrew from Finnish wood processing, new successors had to be found for the companies. Other "ownerless" sawmills owned by the Soviet Union included those in Hyrynsalmi, Rautjärvi, and Uimaharju.

In 1960, Enso Gutzeit sold its shares in Haukivuoren Saha, leaving Iisveden Metsä with a 50% stake, Ukkola Oy with 25.5%, and Metsäntuottajat Oy with 24.5%. Enso Gutzeit sold the shares at face value, resulting in a total payment of 19.8 million marks (about 550,000 euros in 2023 prices) to the buyers. It was decided that the Managing Director of Iisveden Metsä would also act as the Managing Director of Haukivuoren Saha.

Cooperation in Haukivuori worked quite well, but in 1965, the Ukkola companies, financed by the Central Cooperative Fund, were pressured to divest their stake in Haukivuoren Saha Oy. In the board of directors of Iisveden Metsä, it was seen that Iisveden Metsä also needed to get rid of its ownership in Haukivuori. The alternative suggested was that Metsäntuottajat Oy would continue Haukivuori's operations, but this was supported only by Iisveden Metsä representatives.

Ultimately, in 1966, Haukivuoren Saha was merged with Iisveden Metsä Oy. The reason for the merger was to avoid double taxation, but the goal from the beginning was to wind down operations in Haukivuori. Immediately after the merger, timber purchases were stopped, and the sale of plots began. Haukivuori's staff was reduced as sawn timber stocks were emptied.

The price of the shares in the merger was 105% of face value. Iisveden Metsä received a total of 210,000 marks (about 440,000 euros in 2023 prices). Ideally, the purchase price would have been paid as proceeds from the assets located in Haukivuori were obtained, but the sellers did not agree to this. Eventually, it was decided to pay the price in two stages, first half and the remainder in 1968.

There were many properties for sale in the town center near the Haukivuori sawmill, most of which found new owners by 1970. The last one to be sold was a plot in Kyyvesi in 1987, which had a dance pavilion leased by the local labor association. Thanks to the sales proceeds from the properties, the investments in Haukivuori eventually became economically profitable.

Owners' Counterattack

In 1955, there was an attempt, at the initiative of key management members, to change the articles of association of Iisveden Metsä. The aim was to remove restrictions on voting rights and to liberalize the trading of the company's shares. The change went through in the first shareholders' meeting but, in the second meeting, private shareholders turned up in large numbers. Suonenjoki Farmers' Association and the Forest Management Association enlightened forest owners that the changes would have meant a reduction in their decision-making power, and they were right. In the second vote, the change to the articles of association did not receive the required majority.

The general strike experienced in 1956 initially did not severely disrupt the sawmill's operations. Forestry work went well despite the strike, but the sawmill's machines stopped. Later, the company's financial situation tightened because goods could not be delivered to the markets. The general strike lasted almost three weeks and led to significant wage increases.

The shared export quota to the Soviet Union for sawmills was a significant issue for timber trade in the early 1950s. Without the quota, far fewer logs could have been accepted. There was a particularly high amount of timber sawn for export to the Soviet Union in Haukivuori. The export came to an abrupt halt in 1958 when the buyer terminated the contract.

Several sawmills suffered significant financial problems in the mid-1950s. Banks were aware of this and tightened the financial situation. In Suonenjoki, the Savings Bank and KOP demanded significant repayments from Iisveden Metsä on their loans. These were also paid.

Market demand occasionally faltered so much that the sawmill had to be shut down when the lumberyard became too full. In the winter of 1957, the sawmill was operated in only one shift. The situation changed when the markka was devalued the same year, and the competitiveness of Finnish companies improved in the export markets.

Continuous efforts were made in Iisvesi to keep up with technological developments. In 1957, a debarking machine was purchased and put into operation the following year. Immediately after that, it was decided to renew the planing mill and increase the number of drying kilns. Modern new frames had already been acquired earlier.

The availability of timber and the market situation for sawn timber varied rapidly. In 1957, logs were readily available, whereas the situation was completely different compared to the previous year. The following year, the price of sawn timber dropped without any apparent reason. In Finland, logs were plentiful, but demand was low.

In 1959, it was decided to operate the sawmill again in two shifts as there seemed to be demand. The company's decision-making shifted to a simpler model: the managing director or forest manager was authorized to sign timber harvesting agreements. Up to that point, agreements had to be approved by the board of directors.

Combating Soviet Threats

following the second world war, the Soviet state gained control of several sawmills in Eastern Finland. Some were war spoils, while others were purchased by neighbouring countries. The deals were made in the name of the Waldhof company, acquired as war booty from German possession.

In 1950, Waldhof bought the Haukivuori sawmill from the estate of merchant Pölhö. Other sawmills that ended up under Waldhof's ownership included the Uimaharju sawmill and the Rautjärvi sawmill. The capacity of the Haukivuori sawmill was about 5000 standards of sawn timber per year (23,000 cubic metres).

The operations of the sawmills under the new owner were ensured by providing them with larger quotas for war reparation deliveries. War reparation timber production was good business for the sawmills as the markets and payments were secure. The Soviet Union accepted boards and planks even when inadequately dried, which further increased the profitability of the operations.

Finnish forestry companies feared the Soviet sawmill industry. The threat was seen as the Soviets expanding their operations and capturing an increasingly larger share of our country's timber and sawn timber markets. As a counterforce, the timber procurement company Suur-Savo and Karjalan puu were established to buy timber from the operating area of the Soviet sawmills and raise the log price.

The raw timber acquired by Suur-Savo and Karjalan Puu ended up at Enso Gutzeit unless other sawmills in the area needed it. The timber procurement arrangements also involved Iisveden Metsä, which bought timber from Jäppilä for this purpose. The purchasing competition raised prices, and it was intended to compensate timber buyers (including Iisveden Metsä) for the overpayment. According to H. Tapio Sivonen, Iisveden Metsä did not receive compensation because the market boom caused by the Korean War had already considerably raised prices.

In 1955, during trade negotiations, Aarne Pelkonen received information that the Soviets wanted to divest their sawmills in Finland. The other sawmills in operation in Finland came under the ownership of Enso Gutzeit, with only the ownership of the Haukivuori sawmill being divided. Along with Enso Gutzeit, Ukkola Oy and Iisveden Metsä Oy became owners. Ukkola and Iisveden Metsä jointly held the majority of shares.

Later on, ownership of the Haukivuori sawmill gradually passed entirely to Iisveden Metsä. Ukkola eventually had to relinquish ownership under pressure from their financing bank. The administrative officials of Ukkola and Iisveden Metsä mutually agreed not to blame the deals made regarding the Haukivuori sawmill, whether they were good or bad.

the old sawmill workers reminisce

Time At The Mill During The Steam Era

osmo rautiainen, hannu rossi, and heikki väätäinen began their careers as sawmill workers when they were young, between 14 and 16 years old. Rautiainen and Rossi's work at the mill ended when they were in their thirties, while Heikki Väätäinen worked at Iisveden Metsä for his entire life. From the men's recollections, one can get a sense of how the sawmill operated from the 1950s onwards.

The workflow was very different until the early 1980s compared to now. Logs were mainly hauled by ship to Jauholahti, originally mostly as open rafts. Even in the 1950s, logs were debarked on land until a debarking machine was acquired. Logs were then transported from the shore to the sorting area by horses.

On the lakeside, the logs were sorted into different compartments according to their diameter. They processed around 700-800 logs per day, with smaller logs processed more and larger logs less. A thousand was the maximum.

Typically, 17 men worked inside the mill. Blade setters changed the sets during breaks, and batches were set according to the type of lumber needed.

"Processed wood went to the loading table, and the material that didn't come out clean in the set went for edging. Sideboards were made there. After the cant, the material went to the grading table, where they straightened them out. At one end, the boards were put in place for length, and at the other end, there was a marker indicating the quality. Then they went to the loading table, which was called the 'tivoli'," Osmo Rautiainen recalls.

"If a setup got mixed up, word would eventually reach the sawyer, 'the setup is mixed up now.' Sometimes the goods were thicker than intended, and if the pull-out rolls were set too hard, there would be a bend in the material.”

Cart workers pulled the finished goods from the loading table. There were uptakers who recorded the measurements and qualities, and the cart workers pulled them to the lumberyard.

"There were eleven paths to the yard, and the material was transported along rails to the lumberyard. Each piling contained so much material that if it were all of one type, it would have taken several days to fill the pilings. The stack workers then built the pilings," Heikki Väätäinen explains.

Winter Made Work More Difficult

"In winter, they made a channel of logs into the lake, so they could fit a lot of wood into a small space. In the fall, when the lakes started freezing, they used surface pumps to keep the water open. They unloaded trees with iron bars before they froze. They took as much as they could as long as the log pond stayed open," Hannu Rossi clarifies.

In the autumn, ten large piles of logs were brought to the shore. When the log pond froze, they began sawing them. The piles were at least ten meters high and contained 5000-6000 logs each.

"It took about two months to saw ten piles during the coldest winter. A few weeks before the pile ran out, they sank the surface current generators to blow to melt the log pond. When the logs ran out from the land, they started taking wood from the log pond again.”

"After winter, the logs were in such thick ice that they sometimes had to be loosened with dynamite. They tied a bundle of dynamite with a piece of string under the log raft, and when they detonated it, a lot of logs came loose at once," Hannu Rossi explains.

In winter, ice got mixed with sawdust, causing problems with heating the steam boiler. The ice-laden sawdust couldn't raise the pressure in the boiler high enough. Sometimes the saw had to be stopped when there wasn't enough steam. The lights were powered by steam-generated electricity and dimmed when the pressure dropped. Then they had to switch to Savon Voima electricity and wait for the steam to rise.

During the coldest times, they also transported firewood from the forest for heating. Birch logs were needed to raise the heat sufficiently; mixed firewood wasn't good enough.

Steam engine condensate was used to melt the frozen log pond. This didn't ease the situation on Mondays when the heat wasn't kept up over the weekend. In the morning, the pond was frozen. Then they had to take a log and chop the ice into pieces with two men. After about half a week, the log pond started to thaw.

There was no frost limit recognized in the sawmill work at that time. In winter, they just wore more clothes and sometimes went to the forge to warm up. Handling loads could be challenging with leather mittens and two pairs of gloves; it was sometimes hard to grip the two-by-four planks.

"There was no limit; work had to be done. Of course, it had to be done; you just had to work a little extra vigorous sometimes so you wouldn't freeze," Osmo Rautiainen recalls.

All Sorts of Men Worked There

"It was quite a workout back in the 1960s. Everything was done by hand," Heikki Väätäinen remembers.

Loading train wagons by hand ended in the 1960s. Until then, one man loaded a wagon per day. First, loads were made by hand at the lumberyard, then the loading bridge was pushed onto the load, and then the man carried a few planks into the wagon at a time.

"He was completely done after the day, lucky if he managed to put his shirt on," Osmo Rautiainen recalls.

"When a big ship came to the harbor, the saw had to be stopped, and the whole sawmill crew had to load the timber from lumberyard.”

Train loads had to be prepared quickly for loading onto ships.

Open cars came from Russia, with no posts. Pine logs were taken from Valo Laitinen's forest, and posts were made from them. The car was filled by hand; good timber were placed on the sides, and poorer ones inside. The top was made well so nothing got inside. The sides were hammered shut and tightened. Sometimes, a few cars came back from Russia; then it wasn't suitable to mix poor quality wood in between. The entire car had to be full of good quality wood.

It was progress when they built a gantry crane, called a "temari" at the mill. The crane moved the whole stack at once into the wagon. This eliminated one handling step. Another gantry crane was built in front of the planing mill; it was used for loading trucks.

Before the use of forklifts, finished bundles couldn't be stored, but with the mechanization of loading, lumber was stored in bundles under roofs. From there, loading with a forklift onto train wagons became convenient. If the train wagons couldn't fit as much as the ship, the goods were transported overnight by truck to Kotka.

As a young man, you had to prove yourself

"I remember coming to the mill when I was fourteen. In late winter, we put thin schaalboards into the stack. Later on, they were made into lingonberry boxes," Heikki Väätäinen recalls.

Hannu Rossi first got to know the mill in the early 1950s when his father worked on a ship. "We only had one bicycle, and every Monday, I came to the mill with my father on the carrier. Then I had to take the bike when it was needed at home during the week.”

Osmo Rautiainen's father also worked at “Piimä”, and the boy wanted to go there too.

"They would have sent me to high school, but I wanted to go to “Piimä” like my father. In 1962, when I was 15 years old, I was only allowed to work for six hours a day. I was big, so I got to do all the heaviest jobs at the mill. I loaded, transported, and worked at the log yard for one winter. I managed, but sometimes my mother would say, 'Your nose is white, you're tired.' But the work was like that then. I did everything, and then for six years, I worked as a pilings stacker with Niilo Tiilikka, until Kauko Boman asked or told me to be a marker at the grading table.”

In 1960, when Hannu Rossi was 15 years old, he worked for two weeks at the sawdust pile before the managing director, Arvo Tanhuanpää, ordered all underage workers under 16 to go home. The following summer, he started working as an uptaker at the log pond.

"Jauholahti was full of debarked loose logs tied with spruce bark loops. Spruce and pine mixed together. Rukolan Lassi and Pitkäs-Matti started sorting the spruce and pine. I became an uptaker there, spending the whole summer at Jauholahti just marking ticks while the guys sorted with a selecting hook."

Heikki Väätäinen remembers once being alone at the wood-piling area when the union representative, Kalle Karhunen, came and told him to hide because there was a labor inspector at the sawmill. The use of underage labor was monitored.

"I watched the situation all day, but didn't see the inspector. I could have hidden though."

Later on, Heikki Väätäinen worked as a stacker for a long time.

Hannu Rossi worked as an uptaker on the channel from the beginning. "Then Kauko Boman started making a truck yard. They bought a Valmet tractor and front loader with fork attachments. I started moving small packs with the machine, half a meter in size. In 1968, they bought a wheel loader, Tracknik. With that, we did all the work, and the horse was no longer needed.”

Previously, logs had been transported by horse from the log piles to the log pond. That work became forklift work, as did many other transports in the mill area.

"The saw had to be served, and the lumberyard had to be served with the same machine. Lunch breaks and coffee breaks were on the yard side, and the rest of the time in the mill. You had to eat quickly because it was so busy.”

Loading departing loads became easier as the forklift size increased; finally, there was a forklift that could fill a train wagon with two lifts. With Valmet, they had to lift the load 16 times into the train wagon.

Wind scattered rafts

"I was there at the uptake too. It was a beautiful day, and the bay was full of wood. Suddenly, a strong wind came from the south and scattered the raft. When they all started moving, we got the first boom across the strait, but it didn't hold. Then we went to Tervaharju, and there we managed to hold the boom. The next day, we had to deal with that bay," Heikki Väätäinen recalls.

According to Hannu Rossi, the log yard was a mess part of the year, with lanes left by the horses on the shore. Large stones the size of heads were placed in the worst spots to keep the bottom stable. The transfer of the load was quite a jiggle from side to side when done with a wheel loader.

"It was primitive before the early 1960s. There were no machines until the early 1960s. There was only a debarking machine and a stacking machine in the yard. Everything was done by hand, even the bundles were lifted by hand into the wagon.”

In 1958, a debarking machine was added to the mill, and a crane for moving bundles came in the early 1960s. At the same time, the road was moved to a different location. The lumberyard was gradually made more spacious to allow forklifts to transport bundles.

According to Osmo Rautiainen's recollection, the mill's personnel were a community that got along well with each other. They patched the hard work with humor. Sometimes, they even played pranks on each other. There probably wasn't any fighting, but someone might have gotten angry now and then.

"When Kauko Salminen was the sawyer, there was strict command not to take any breaks in feeding in the logs. Then some trouble came up; the transporter couldn't push the wood into the transport without any space in between. Then you would hear a shout: 'Wood, wood.' Then two people would start pushing in two logs side by side, and soon you would hear: 'Don't start fucking around,'" Osmo Rautiainen recalls.

They followed sports, and bets were made on who would win a kilo of oranges, especially in ski competitions. Once, during the Olympics, for some reason, the saw had to be stopped. Then all the mill crews went either to the sawyer's room or to the forge to listen when the skiing was on. Uatu Ruuskanen said, "Damn hell, Hiltunen was a sportsman too, but we didn't stop the saw for the Olympics.”

The veterans' memories of the mill's supervisors are mostly positive. Kauko Boman was Osmo Rautiainen's supervisor the whole time. Kauko later told Osmo's father that he would make a good worker out of his son.

"Kauko was a good boss who stood up for the lumberyard workers. In the fall, some got their final paychecks, but extra staff had to be kept at the yard when ships came to be loaded in the harbor. It was a crazy rush to get the train loads ready then."

Among The Winners Of The Elimination Game

the history of independent sawmills can be seen as a long elimination game. Short, very profitable periods were followed by longer difficult times. Over the decades, those companies that couldn't develop their operations during the good years have fallen out of the market. The conditions for business operations are determined by the availability and price of logs and the fluctuations in export markets.

The situation for sawmills operating outside the integrated conglomerates of the forestry industry has been affected over the years by the market situation and price of by-products, such as chips and sawdust. By limiting purchases of chips generated during sawing and regulating prices, large, diversified wood processors have been able to keep sawmill entrepreneurs in check. There has been talk in the industry of a "chip war," which could be at its worst in the 1980s. A ban on or price reduction of the chips offered by sawmills could still be a consequence by the end of the last century if a competitor noticeably raised the market price of logs in their procurement area.

Another pressure tactic used by major processors was restricting the intake of small-diameter wood. Sawmill entrepreneurs sometimes had to seek buyers for accumulated pulpwood from significant distances, and personal relationships could resolve deadlock situations. For Iisveden Metsä, Myllykoski was often the company that eventually provided an outlet for chips and pulpwood during difficult times.

Independent sawmill operators have often pondered effective collaborative solutions to ensure the sale of chips and other by-products. The story of the Lievestuore pulp mill became infamous. The pulp mill, which was jointly owned by sawmills, only lasted for a short time; the result was a contentious bankruptcy and a stinking caustic pond, the cleanup of which took decades.

Iisveden Metsä's cooperation with the owners of the Lievestuore pulp mill began in earnest in 1971 when the company accepted an offer from Keski-Suomen Selluloosa Oy to purchase chips. The deal also included ownership in Sivutuote Oy. Chip deliveries began the following year, but the buyer's solvency was weak from the outset. Delayed payments restricted and slowed chip deliveries because the buyer's credit was not to be raised above 100,000 marks.

Capital scarcity was a constant problem for the Lievestuore pulp mill. The new parent company repeatedly increased the share capital starting from 1973, and participation in capital increases was a condition for chip deliveries to sawmills. Often, the price received by sellers for chips was largely used to shore up Sivutuote's capital structure.

The end of the Lievestuore pulp mill approached when the Serlachius company acquired a large shareholder, Pohjan Saha, in Lievestuore. As a result, Iisveden's chip deliveries were transferred to Serlachius' Mänttä mills on behalf of Sivutuote Oy in 1975.

The old pulp mill in Laukaa was unable to comply with emission limits without significant investments, which the company never had the readiness or funds for. The management of the company was even guilty of falsifying emission reports in Lievestuore to avoid interruptions in operations. After the change in ownership, the closure of the pulp mill was inevitable, leading to a lengthy legal battle over environmental damages.

Unsuccessful initiatives

In 1960, Metsäntuottajat Oy was offered to buy the Halltex sheet factory in Kuopio. Iisveden Metsä was asked if they were interested, but the board was skeptical from the start. The board of directors of other owner-sawmills of Metsäntuottajat also showed little interest in the new venture, so the project was abandoned. The factory, which produced fibreboard, could have used some of the sawmill's chips and small wood. However, none of the other owner-sawmills of Metsäntuottajat were sufficiently interested in this new venture, so the project was not pursued.

The following year, there was a plan for a regional project in Sorsasalo, Kuopio, called Savon Sellu. Originally intended to produce sulfate pulp, the factory would have been very welcome for Iisveden Metsä, and the company became a shareholder with a small investment. However, the project in Sorsasalo did not progress beyond the planning stage with regional efforts alone.

The investment in Savon Sellu began to materialize when Metsäliitto joined the project in 1965. The production focus of the then-built factory was switched to corrugated board, with birch as the raw material. Hopes for good cooperation on raw materials failed. Before this, Iisveden Metsä had already participated in many share issues, from which the reward was ultimately only the joy of ownership and modest dividends. A buyer for chips was not found from the new factory.

The company's articles of association had long limited the amount of dividends. According to the rules, dividends could be paid at most five percent above the prevailing deposit rate. The restriction was insignificant as long as the operations were limited, and profitability was weak. In the 1960s, however, the upper limit began to weigh heavily as the share capital remained small relative to the extent of the operations. The solution to the situation was an increase in share capital. In 1962, the company's share capital was increased to the specified upper limit of 14.4 million marks through a free issue, and new share certificates were issued at the same time.

Competition for wood intensified

Even in the 1960s, there were several difficult years in production. Sawing had to be reduced partly due to the poor availability of logs and partly due to the weak market situation for sawn timber. In 1963, production was also restricted by a strike by sawmill workers.

The capital situation tightened, but new methods were occasionally found to fix it. A Dutch customer offered an advance payment for purchased lumber with a total interest of 6.5 percent. The offer was accepted because the cost of money was considerably cheaper than domestic bank credit.

The arrival of new buyers in the area caused headaches in wood procurement. SOK, Suolahden Puu, Rauma Repola, and the sawmills of Päijänne region had acquired purchase quotas in the area. Rauma Repola had acquired Peuran sawmill and Pitkälahti sawmill in Kuopio. Increased competition raised the price level of logs, and the profitability of sawing further deteriorated. Nevertheless, wood continued to be purchased for Iisveden, as shutting down the sawmill would have caused even greater losses.

For a long time, it was the task of the company's board of directors to oversee timber trade in its own area; board members monitored who bought timber in their home regions. The goal was to ensure that as much of the suitable timber as possible would come to the company. The influence of the company's board on timber markets diminished over the decades and ceased altogether when other companies buying timber became significant raw material suppliers, and logs were also obtained through exchange deals.

In 1964, the price of available timber was deemed too high. Nevertheless, logs were decided to be purchased nearly at the normal level, one million cubic feet, in the hope that the market situation would improve. However, sawing had to be reduced due to the poor availability of raw materials.

1965 was already the third consecutive year of losses for sawmills. Iisveden sawmill was decided to operate only in one shift because the availability of logs was still uncertain. The following year, according to the early winter estimate, only two-thirds of the raw material requirement would be met. "There has never been such a weak supply of roundwood before," the board noted. Sawing volumes in 1966 and 1967 were the lowest since the early 1950s.

Devaluation to the rescue

In 1966, sawing appeared to be unprofitable, according to calculations by Managing Director Arvo Tanhuanpää, with a loss of 40 marks per sawn standard. The price of raw materials at the sawmill was then found to be 20 to 25 pennies per cubic foot too high. The following winter, sawing was only done in one shift until a devaluation of over 30 percent in the mark made the situation more favorable. The board was pleased that before the devaluation, a large timber deal was made with Metsähallitus.

After the devaluation, export companies were charged, as usual, part of the price benefit they received. The collection of export duties taxed the result, and when export duties eased, the price of logs rose.

Managing Director Arvo Tanhuanpää began to suffer from illness, and the company's forest manager H. Tapio Sivonen acted as his deputy. Tanhuanpää was absent from Iisvesi so much that the sawmill's staff complained to the company's board of directors. According to the sawmill staff's letter, there was no representative of the owner in Iisvesi with whom they could negotiate. Due to his illness, Arvo Tanhuanpää remained absent, but the chairman of the board of directors, Pekka Nuutinen, stated in the summer of 1968 that he was carrying out his duties by mail and telephone.

Tanhuanpää's illness did not improve, so he had to leave his position with the company. From the beginning of 1969, the board of directors appointed forest manager H. Tapio Sivonen, who had previously served as the company's forest manager, as the company's managing director.

Into the horseless era

The company's owned horse was sold as unnecessary in 1969. The recently purchased tractor-loader had to replace the horse in moving logs from piles to the saw. At this stage, the company's own men drove the wood harvested by the company's own men from the forests to the roadside mainly with agricultural tractors.

Soon, even logging was mechanized. Initially, the company guaranteed loans to reliable harvesting contractors who had been in an established cooperation relationship and who acquired harvesting machines. Loggers were not quickly displaced from logging, as the first machines were used only for handling felled trees. Even in the 1980s, final fellings were partly done by hand.

Most of the work at the sawmill was still heavy manual labor. The heaviest tasks included moving sawn timber to warehouses, stacking, and loading onto railway wagons. Relief was obtained for many tasks when a tractor-loader was first introduced and later forklift trucks.

A significant change for employees was that from the early 1960s, the Working Hours Act was revised. From then on, work on Saturdays was only done in exceptional situations and at an increased rate.

Water Transport Was a Lifeline

an essential aspect for the location of Iisveden Metsä's sawmill was the extensive waterway, along which logs could be floated at reasonable costs even from a distance. Originally, logs were floated as loose rafts, and firewood and props with barges. As methods evolved, log floating was done in bundles, significantly reducing transportation costs.

Floating was central to Iisveden Metsä's raw material supply from the company's inception until the 1980s. The first tugboat, the Dutch-built s/s Metsä, was purchased for the company from Sweden in 1925. Lauri Vilpponen went to negotiate the purchase, assisted by Juho Horsti, a technical expert from the Metsäkeskus Oy. The men had a good bundle of banknotes with them.

The buyers didn't know what kind of rarity they were acquiring; there is but one other steamboat equipped with a similar V2 Compound engine existing in the world. Before coming to Iisvesi, the vessel was renovated in Turku at the Crichton-Vulcan shipyard.

Before acquiring their own tugboat, water transport was carried out using vessels owned by the logging association. Sawn boards and planks were also floated on barges to the Iisvesi station for further transportation until the company's own sidetrack was completed.

The Metsä ship began towing logs and occasionally firewood barges. The actual barges were towed by the s/s Tapio, acquired from the Pielaveden Metsäosuuskunta in 1930. The entire fleet of the bankrupt cooperative, including at least four barges, Tapio I, II, III, and IV, was purchased from Pielavesi.

In 1939, the Panu and Kimmo barges were acquired for towing by Metsä. Until the 1950s, there was also a firewood barge named Jehu alongside Metsä. It could carry 60 cubic meters of firewood. The barge was equipped with a sauna, and the crew enjoyed its steam daily.

During the war, barges were towed on charter trips all the way to Suolahti, carrying goods collected from the Iisvesi station, anything and everything. War evacuees and their cattle also got rides. According to Hannu Rossi's recollection, the animals might get so scared by the ship's whistle that they jumped from the barge into the lake.

According to Eino Korhonen, who served as the engineer on the Metsä ship, the vessel was "good at towing but consumed a lot of firewood." According to the sailors' memories, Metsä was also fast and good at racing. Competition, such as who would get their ship to the lock first, was quite common. Since transporting a bundle through the lock could take up to a day, this had a significant impact.

Metsä's last working summer was in 1956. After that, it stood idle on the shore, and all the bronze parts from the engine were removed for reuse. The ship remained in place until 1971 when it was sold for private use. The vessel has been restored by Esko Härö and is still operational.

The Tapio ship served Iisveden Metsä for a longer period. The purchase price was high for the buyer, who had just started operations, 300,000 marks (about 114,000 euros in 2023 prices). With this price, they got a long-lasting workhorse, which was used in floating for over fifty years.

Tapio underwent several repairs in Iisvesi, and a major overhaul was done in 1936. The vessel then received a more powerful engine, making it one of the fastest vessels on Iisvesi. Along with Tapio, four large barges were acquired from Pielavesi, which were used for other water transports alongside the company's own timber.

Tapio remained in use for an unusually long time. Eventually, it was the last steam tugboat in commercial use in Finland. After the summer of 1986, the ship was sold for private use.

Log transportation by winch-equipped rowboat continued until the 1960s on Suontie's open water, later logs were floated with a motorboat named Jehu. Jehu had a two-cylinder Wickström engine and collected logs from Paasvesi. Logs were floated to Iisvesi as loose logs along the river. This had to be discontinued soon due to environmental reasons.

A Long Journey to Vaaraslahti

There were normally seven men working on Tapio, each with their own tasks in floating. There were loggers, dividers, stokers, engineers, and the captain.

Logs were collected from vast areas to the floating raft. There were many company owners on the shores of Niinivesi and Pielavesi who offered forests for harvesting. Trees were collected from almost every shoreline in small bays. Pielavesi's Vaaraslahti bay was the farthest place from where logs were gathered during Hannu Rossi's time. Floating from Vaaraslahti to Jauholahti took a couple of weeks.

The normal number of bundles in towing was about 300. Sometimes, by combining smaller bundles, there could be up to 500 bundles towed from Säynätsalmi. Then there was no room for being at the mercy of the wind.

The floating from Vaaraslahti went through several channels and locks. The rafts had to be dismantled in Säviä, and at Kolu canal, the rafts had to be split because only six bundles could fit into the lock at a time. Kolu canal was so narrow that only two bundles could fit side by side; Riitsalmi was also a tight spot.

There were sometimes disputes with shore owners when the floating had to be steered into shelter from the wind. Then fishermen's nets were at risk. Sometimes, the nets brought joy to the floaters: there was plenty of fish for dinner without having to catch them.

The last captain of the Tapio ship, Olavi Jauhiainen, was, according to Hannu Rossi's recollection, a jovial man and sometimes got delayed in entertainment. Once, people in Iisveden wondered why the ship hadn't arrived although it was supposed to have left Tervo a long time ago. The explanation for the delay was that the ship's crew had gone to dance at Kekkolansalmi dance stage.

The end of floating affected the sawmill's routines quite a bit. The work on the log pond stopped as sorting moved to land. It even made work easier as there was no rush to get the logs out of the water in the autumn. Long-floating logs tended to freeze, and the logs became heavy to handle, making sawing a constant struggle.

from the oil crisis to overproduction in the 1970s

From The Bottom To The Peak And Back

harsh economic fluctuations continued to plague the sawmill industry in the 1970s. From the mid-1970s onwards were difficult years for sawmills. In order to ease the market situation, production cuts were implemented in Finland under the guidance of the Finnish Forest Industries Federation. The international market situation was further complicated by the energy crisis caused by oil production cuts in Arab countries.

For sawmills, the 1970s began in a good economic climate. In Iisvesi, work was carried out in two shifts, and sales were good. However, the market quickly turned, as always, and soon the Finnish Forest Industries Federation began recommending production restrictions to its members. After a while, member companies were required to commit to reducing their sawing.

Rapid economic fluctuations are a constant problem for the sawmill industry. In the 1970s, changes in export trade intensified due to international crises. Following the increase in energy prices, the sawmill industry experienced a boom even stronger than the Korean War from 1973 onwards. The export prices of sawn timber almost doubled, and the price paid for wood also increased significantly. Recognizing the exceptional situation, the tax authorities imposed a new 2.5% cyclical tax on companies, which cut into a significant portion of their profits.

From 1975 onwards, there was then a recession that lasted about four years. When in 1973 the total sawn timber production in Finland was 8 million cubic meters, in 1975 it dropped to five million. A new boom began at the end of 1978, and the following year saw a new annual production record. In 1980, Iisveden produced over 45,000 cubic meters of sawn timber, a record that was only broken in 1999.

Technological development was a significant factor influencing the increase in sawing volumes. Log sorting was renewed, and a length sorting system was built for finished products according to a patented design by Kauko Boman and Pentti Niemelä. The length sorting system also interested other companies in the industry, and some applications of the same technology were built for other sawmills based on the example set by Iisveden.

Even a small impregnation plant was acquired for the sawmill, but its lifespan was short. The local market for impregnated wood was limited, and due to strict environmental regulations, it was not profitable to continue operations for long.

Concentration of timber procurement

In the last century, forestry companies established various forms of cooperation in timber procurement, some of which were short-lived, while others operated for longer periods. Some operated regionally, while others nationally. In addition to loose forms of cooperation, in the 1970s and 80s, there was also tighter regulation in which procurement areas, quotas, and maximum prices were defined on a company-specific basis. All forms of organized cooperation in timber procurement ended only when the Competition Restriction Act came into force in 1992.

The Industrial Timber Association began its operations in 1972, and its members established the Forest Negotiating Council as their umbrella organization. The Council's activities focused on four regional cooperation bodies. The regional associations were divided into Western, Central, Eastern, and Northern Finland. Their task was to manage inter-company relationships, determine each company's procurement shares, and guide prices. Another task was to keep quantity and price statistics, which served not only the companies' purchasing activities but also negotiations with sellers.

The association monitored compliance with prevailing price recommendations in its area, sought to promote a favorable atmosphere for timber trade, and maintained contact with authorities. Such cooperation among companies was entirely public and accepted in Finland until it had to be discontinued as a cartel due to EU competition rules.

At the associations' meetings, allocation figures were agreed upon for each member company, determining the companies' regional raw timber procurement volumes. Quota distribution could also be used as a means to restrain inter-company price competition. According to H. Tapio Sivonen's recollection, during a meeting of the forest association held in Joensuu, Iisveden Metsä's allocation was set to zero. Other members of the association used this as a protest against the purchasing policy of the sawmill. Angered by the treatment, Iisveden Metsä withdrew from the association and continued independent pricing as before. As a result, there were problems both in the marketing of chips and pulpwood.

There were also occasional difficulties in obtaining exchange wood. The exchange of pulpwood for logs did not always succeed because large companies claimed they had no logs in the area. However, compensation for pulpwood was received.

There were sometimes frictions in the timber market even locally. The Suonenjoki Forest Management Association set up its own timber sales committee, with which negotiations had to be conducted before trading with private forest owners was possible. Before nationwide price recommendations, the association also sought to influence the price paid for timber.

Sometimes, natural forces came to the aid of the timber market. In 1972, a storm felled a lot of timber in Suonenjoki. Logs were bought especially from those forest owners with whom business was already being conducted. Timber prices were negotiated at the national level, but there was also influence at the regional level. In Suonenjoki, trade started fairly quickly, although the Northern Savo Forestry Committee had not approved the national saw log price recommendation agreement.

Sawmill owners’ association restricts production

The central connecting link and cooperative organization of Finnish sawmills was the Finnish Sawmill Owners’ Association, of which Iisvesi Metsä was a member for a long time. Often, the sawmill manager also belonged to the association's board and its working committee.

During the export problems in the 1970s, the association began to take control of its member companies' production. Central organization began to propose production restrictions due to the weakened market situation. For paper and pulp, these had already been decided. Reductions of 15-20 percent were planned at several sawmills.

In the summer of 1974, the Finnish Sawmill Owners’ Association urged its members to reduce production due to oversupply. From Iisveden, it was promised that the production level of 1973 would not be exceeded. In the autumn, the company had to commit to production being at least 4 percent lower than in 1973. For the following year, the Association anticipated even a 20 percent reduction. The final recommendation was a 30 percent reduction.

There was unrest in the currency markets in 1973, making foreign trade difficult. However, sawing continued in two shifts in the beginning of the year because raw materials were readily available. Due to a shortage of labor, the second shift had to be stopped by the end of May. A port strike began to hinder shipments in June. The effects of the energy crisis began to be felt at the end of the year. Trade came to a standstill.

Production cuts were sometimes painful. In the winter of 1975, 15 people were laid off from the sawmill due to the transition to single-shift sawing. Layoffs had to continue the following winter, with 12 employees being dropped from the payroll for three months. At the same time, the Ministry of Labor granted cyclical support for hiring people at risk of unemployment.

Sawn timber trade was going well at this stage, but log procurement was lagging. The board of directors considered it wise to discuss the need for its own procurement organization. The result was that procurement officers were kept working in their own operating areas.

Health and safety took bold steps: employees were provided with the protective helmets and ear defenders required by the updated legislation. A new era began in the office with the acquisition of electronic calculators.

Difficult years in the market

"The situation in mechanical forestry is catastrophic, and chemical forestry is heading for major difficulties," said Veikko Vainio, CEO of the Forest Association, at the beginning of 1974. The oil crisis, which shook the entire economy, halted timber procurement and sawn timber exports. In addition to trading problems, there was unrest in the labor market, and sit-in strikes were held in Iisvesi as well. Short work stoppages aimed to support higher wage demands than those set by national agreements.

Labor shortages were driven in part by the labor situation at the sawmill. To alleviate the situation, the company subsidized travel costs for those coming from over 20 kilometers away. The difficult labor situation was partly due to a housing shortage in Iisvesi, which the company began to address. New construction was not possible in the local village, so condominiums were purchased from a new development in Tervala.

The sawmill was renovated even during difficult years. Cheaper financing was sought from the Regional Development Fund for the log sorting plant, but to no avail. Next, a new edger was installed, and a transformer was purchased because the old Savon Voima transformer was too small.

The availability of raw materials and the market situation for sawn timber did not always match. The Finnish Sawmill Owners’ Association was given a commitment to reduce production in the first half of 1977 (20 percent of the 1973 production volume). Due to poor sales of sawn timber, there were signs of financial difficulties, leading to a warning of layoffs for the entire staff.

The following year, there were problems both in obtaining logs and in marketing pulpwood purchased in connection with log trading. The Industrial Timber Association lowered prices in October, which unexpectedly increased the supply of timber. Timber sellers feared new price declines. The introduction of national timber price recommendations clarified the situation all at once.

The Swedish crown and the Finnish markka were devalued. Sweden devalued more, weakening the competitiveness of Finnish companies. However, sawing could still be carried out in two shifts during the spring when the market situation was favorable.

In 1979, preparations began for the new Limited Liability Companies Act (effective from the beginning of the following year). Minor changes had to be made to the articles of association. Share capital was raised through a fund issue above the 1 million mark limit, otherwise the board of directors would have had to be dissolved.

The Long Career of a Sawmill Worker

ari väätäinen got a summer job at the Iisveden Metsä sawmill after finishing his military service in 1978. His first job was in the lumberyard, where the experienced workers immediately put the young man to the test.

"My very first job was in the loading team. There were four of us, and every day that week, I felt like a drowned dog when I went home. They tested me when I was on top of a pile receiving goods. Three men pushed as much stuff as they could from the top. It wasn't easy to stack the goods quickly, so the piles spread out. Then, on Friday, the oldest of the men, Arvo Jauhiaisen, said, 'You'll make a sawmill man, boy, since you didn't leave home during the week.' I was soaked in sweat every day when I went home, making mistakes and trying to keep up."

The sawmill was very different when Ari Väätäinen started working there. The frames were still powered by steam engines. The following year, they switched to electric motors.

"There were belts all over the sawmill because the frames operated on steam, and there were belt drives from the main shaft to the conveyors and others. In winter, when the steam engine's pressure dropped due to wet fuel, the frames would slow down, and the sawmill lights would dim."

The young man's next task was to assist in feeding the sawmill. There was a gantry on the shore where logs were fed onto the conveyor. After that, he worked for a while in packaging, operating the packaging machine.

In the autumn of 1978, Kauko Boman asked Ari Väätäinen if he would like to become a blade setter at the sawmill. He spent about ten years as a blade setter and assistant. In 1990, he started working in the workshop, where he has had plenty of work to do to this day. The workshop's tasks include essentially all mechanical maintenance of the sawmill.

"At that time, the workshop had Viljo Utriainen, Timo Matilainen, and Matti Partanen. We did welding, bearing installation, and all kinds of mechanical maintenance work."

There's always something new at the workshop, especially in recent years, as more equipment has been added to the sawmill. Maintenance workers often assist electricians, and electricians sometimes help with renovation work.

"We tried to repair whatever machines happened to break down. If we couldn't do it ourselves, we asked for help. Most of the repairs have been done by ourselves, as long as we've been able to get the parts."

Plenty of Trust

Ari Väätäinen's first position of trust was as a safety delegate, which he started in the late 1980s. He began as the chief shop steward nearly ten years later. For over twenty years, he held both the safety delegate and chief shop steward positions.

There was trust, but not everyone was always satisfied. Few complained about decisions at the workplace, but on Saturdays, he sometimes received calls from workers who wanted to express their grievances.

"Feedback started coming on Saturday evenings when some of the guys were a bit tipsy. I didn't engage in discussions with the men, but I promised to get back to them on Monday. When I asked about the problem on Monday, it had usually been forgotten."

"Labor union activity was quite intense when I came here. There were two labor parties, and before elections, leaflets were distributed, telling who to vote for. I've never really understood why workers have to argue with each other. There's no sense in it. Party matters were forgotten when I became a shop steward."

Nowadays, politics are not discussed at the sawmill at all, according to Ari Väätäinen.

"In my opinion, Iisveden Metsä has been a good employer. Wages have been paid on time, and there haven't been many disputes. Sometimes, there used to be conflicts and memos were exchanged between the unions. When Matti Virtanen came to the company, things were sorted out there in the office."

The sawmill was renovated at the right time

The hew-saw came to Iisveden Metsä in 1993. Production increased immediately, and the frame saw was phased out of production a couple of years later.

"At that time, the blade setters filled in for the sawyers' breaks, and for some reason, I was substituting on the lower frame. I think we were sawing twenty-inch pine. The wood was a bit frozen, and it kicked back on the frame. Matti Virtanen happened to be there, and he said, 'This playing around stops now.' After that, we didn't saw on the frame anymore, and the big logs on the yard were replaced with logs suitable for the hew-saw.”

"The frame is such that in an output sawmill, when you try to get as much wood as possible through, the lumber isn't exactly precise. With the hew-saw, we can get lumber that's accurate to the millimeter."

The most significant change in production during Ari Väätäinen's career was the completion of the combi plant in 1996.

"Within a couple of years, we reduced our workforce by nearly 30 people. The good thing was that the physical work at the back end decreased significantly. The work has become lighter and easier."

After reducing the workforce and the completion of the plant for sorting both dry and fresh goods, most of the departing employees were able to retire at the age of 55.

The significant change in recent years has been the renovation of the sorting of fresh goods. Production could be increased again when fresh goods were sorted on a separate line. There has been a lot of investment over the last ten years. Dryers have been added, and in addition to the green grading line, a new heating plant has been installed.

Maintenance tasks have increased at the sawmill as new equipment has been added. Much of the maintenance work is done on weekends, while during the week, they try to run at full capacity.

"We have a good maintenance team, and there are eager line workers who can help when needed. Production doesn't suffer much. Of course, if something breaks, it's fixed right away. But if possible, renovations can be scheduled for weekends."

In the past, the majority of the sawmill's workforce lived near Iisvesi. Nowadays, the situation is different, and workers live in Suonenjoki's center and even farther away. Ari Väätäinen's home is in Tapiola, about a kilometer from the sawmill.

Ari Väätäinen doesn't dare to say anything about the future of the sawmill industry.

"We've been in a situation where when others have been doing poorly, we've been extremely busy. It's related to our ability to produce even small batches. Customer orientation is probably one factor."

"We haven't had any official layoff warnings since 1987. If things continue like this, it looks good. The world situation is such that nobody knows what will happen next and where."

the 1980s saw the liberalization of finance

A Frenzy In Stock Trading, Even In The Local Neighborhood

In the late 1980s, the Finnish financial markets experienced a major upheaval when the Bank of Finland allowed the supply of currency loans to be freed. As capital flowed, stock prices climbed higher and the interest in investing spread to wide segments of the population. The "casino economy" spurred investors into action, even in Suonenjoki, where a brokerage firm run by two young men started collecting shares of Iisveden Metsä with funding from local banks.

The demand drove up share prices and encouraged established owners of the sawmill to make deals. Those holding shares sold them to the local brokerage firm, including the CEO of Iisveden Metsä and some members of the administration. The brokerage firm managed to acquire the largest single block of shares from the descendants of Emil Vehviläinen, one of the key influencers of the company in its early decades. Eventually, Laitinen&Siikavirta Brokerage Firm acquired about a third of the company's shares. The young men began to appear in the community as owners, and their plans were even reported in the local newspaper.

During the casino era, Iisveden Metsä was not considered the most obvious target for a takeover. The sawmill's technology was becoming outdated, and its profitability was weak, except for a few good years. The widely dispersed ownership also made it difficult for a buyer to achieve their goals.

Even before the shares were registered, cornerers began demanding positions in the company's management, to no avail, as it was not possible according to the company's articles of association. The renewed management of Iisveden Metsä did not see sensible cooperation opportunities in the plans presented by the young men, so when the shares were registered, the company bought them back. This strained the sawmill's capital situation, even though free capital had been increased the previous year by selling assets. Meanwhile, young investors experienced significant losses when the redemption price specified in the company's articles of association was lower than what they had paid.

The takeover attempt was an unpleasant surprise for Matti Virtanen, who had just started as CEO. Important investment plans had to be postponed as the company's capital dwindled. The capital shortage resulting from the redemption of shares was covered by a share issue, which replaced the costs incurred from the takeover attempt.

The share issue carried out in 1990 changed the ownership structure of the company somewhat. The company gained new owners, and some of the old owners increased their ownership stakes. The ownership of the company is still widely distributed, with nearly 400 private owners. Each CEO has been committed to the company through ownership.

The takeover attempt and the costs incurred from its rejection caused some uncertainty among partners. One way to counter suspicions and demonstrate the company's vitality was to participate with its own section in the traditional parade of the Strawberry Carnival. The motto in 1989 was "It saws after all." The company participated in the Strawberry Carnivals a couple more times with the whole group and in high spirits.

The Wood Project identified areas for development

In the late 1980s, the joint economic development company of the Inner Savo municipalities had a Wood Project, led by engineer Antti Väyrynen. As part of this project, Jaakko Pöyry Oy provided Iisveden Metsä with recommendations for future development. Primarily, the consulting company urged the sawmill to make its operations more customer-oriented. The recommendation also included integrating production more efficiently and flexibly from the forest to the market. According to the consultant's report, it would also be beneficial to shorten the distribution route, at least for specialty products. It was also suggested to seek new customers for the production part that was not included in the joint shipping of Metsäntuottajat Oy.

In hindsight, it's easy to see that these recommendations were implemented quite quickly. However, the most significant change in operating methods occurred gradually, especially after Matti Virtanen took over as CEO. Limited resources slowed down and restricted the investments required for the changes.

The Pöyry company's report stated that the wood utilization rate at the sawmill was good at 2.15. However, productivity lagged significantly behind other sawmills of similar size. Man-hours per cubic meter for finished lumber production were 3.2, while for other sawmills of the same size, the figure was 2.3-2.5. Some spruce lumber was sold based on customers' dimensions, but the quantities had been relatively small.

The most problematic aspect highlighted in the Pöyry report was the sharp fluctuations in export volumes, as this directly affected production changes. The situation could only be compensated for to a small extent through domestic sales. Domestic sales accounted for about 20% of total production annually in the 1980s.

Consultants also assessed the sawmill's competitive situation; according to the report, the toughest competition for Iisveden Metsä came from other Finnish sawmills. The main reason for intense competition was seen in the excess capacity created by integrated sawmills. Buyers of lumber could take advantage of the oversupply situation and cause price erosion.

"The sawmills have practically been unable to agree on unified production restrictions, so the agreed price level has not held," the Pöyry report stated.

The detailed report listed a long list of factors limiting Iisveden Metsä’s operations and other shortcomings. Log measurement was manual, the sawmill had no computer-based data collection or calculation, the old log sorting plant needed refurbishment, there were not enough sorting places for lumber on the pull-out table, edging was completely manual, and the drying capacity was too small. In addition, transferring sticker packs required too much manual labor.

During this time, frame saws were becoming technologically obsolete, and many companies were getting rid of them. The general observation in the consulting report was that the sawmill's workforce was too large in relation to production. Furthermore, a considerable amount of capital was tied up in the to some extent practiced air drying. The company finally abandoned the pilings yard for good in 1989.

Iisveden Metsä sought new business opportunities by acquiring a modest capacity Sivonen birch sawmill from a bankruptcy estate, located in Vieru. However, the small sawmill with inadequate technology did not improve the company's competitiveness, and after a change in CEO, the subsidiary was soon abandoned.

The "Savujako" system worked

The joint cooperation of forestry companies in timber purchases was part of the industry's history for a long time. The establishment of Iisveden Metsä was originally a response to the industry's consolidation and cartels. Later, the sawmill had to join the cooperation to secure its own timber supply.

"Savujako" was the norm at least until the 1980s. H. Tapio Sivonen, who had been involved in timber trading for a long time, recounted that in Suonenjoki, the most significant timber buyers in the area would gather every Monday at the Esso gas station café to go through the available timber sales. When it came to larger timber sales, the group would discuss who would make a competitive bid and who would secure the deal by offering slightly better terms.

This kind of bidding process was widely known among forest owners. The deals were also influenced by the fact that some timber sellers had formed permanent partnerships with certain buyers. Others did not interfere with these arrangements. Exceptions were mainly new forest owners or those who had moved from elsewhere. Some significant timber stands changed hands for less than the best possible price.

A forest owner who had moved from southern Finland to Suonenjoki had acquired a considerable forest estate. Not familiar with the trading practices, he accepted the first timber purchase offer he received when he faced urgent financial needs at the beginning of managing the estate. H. Tapio Sivonen was dismayed to find out that the man had accepted Rauma-Repolan's auxiliary offer when Iisveden Metsä hadn't had the chance to present their own better prices. Later, when explaining local trading practices to the landowner, Sivonen also mentioned how much worse off the timber seller was in this case. From then on, this forest owner never failed to ask for an offer from Iisveden Metsä.

Strong demand for pulp and good prices posed a problem for sawmills as integrated companies accelerated the purchase of pulpwood by raising log prices. The situation clarified somewhat when the first timber sales framework agreement was signed in 1980, which defined prices for all timber assortments. The agreement lasted creaking for about a year and a half until the industry terminated it. It took several more years before new national price agreements were reached.

Technological leap

The 1980s were one of the toughest periods in the history of Finland's sawmill industry. During this time, there was only one short boom following the 1982 devaluation. Throughout the decade, Finns often watched as Swedes captured markets by devaluing the krona several times. According to Anna-Stiina Henttinen, who wrote about the history of independent sawmills, the 1980s were a dark tunnel of unprofitability for the sawmill industry. Over a hundred large sawmills ceased operations during the decade, along with an even larger number of small ones.

In sawing technology, the 1980s can be considered revolutionary. Frame saws began to lose their competitiveness as new sawing methods took over. Companies sought to adopt new technology as quickly as possible.

"Massive investments threatened to cause overproduction, which in turn led to falling prices and declining profits. The sawmill industry, in particular, faced problems in the early 1980s. There was a fight over logs, and so log prices rose. Integrated conglomerates could afford to raise log prices to obtain wood for paper and pulp, which was more important to them. The impact on sawmills could be further intensified by adjusting the price of chips purchased from the sawmills," summarizes Sakari Siltala.

Actually, all sawmills were for a long time "cycle sawmills." In Iisveden, sawing volume increased significantly due to good economic conditions, and during slower times, they resorted to downtime. In the summer, they often operated in a single shift, and during other parts of the year, the sawmill operated at its peak with two shifts. The mill employed about a hundred people, and during the winter season, there were 80 lumberjacks and drivers in the forestry department. Mechanized logging was still in its early stages.

Struggling for profitability

Toivo Korhonen from Vesanto left his position on the company's board in 1981 and thanked the company and its people in his farewell speech:

"Iisveden Metsä has long since fulfilled the task for which it was founded and the objectives set for it by its founders over 50 years ago. The positive development in the company continues, as it has a skillful CEO, a considerate board, and a supervisory board."

Competition for timber in the local area increased when Ilkka Kylävainio founded Keiteleen Teollisuussaha Osakeyhtiö. Initially, Keitele was a partner in timber procurement when Iisveden couldn't process all the purchased dimensions. Later, Kylävainio's company became a strong competitor as it acquired new technology and began processing all kinds of logs.

Nationally, sawing capacity had been significantly increased in the 1970s, which easily led to oversupply in the market. Many companies faced shutdowns, resulting in the country's sawing capacity decreasing by about 3.5 million cubic meters. Difficulties in procuring timber, declining profitability of companies, and increased indebtedness were topical issues in the forest industry.

The outlook for sawn timber markets in the 1980s was generally bleak, with log prices high in relation to sawn timber export prices. The 1982 devaluation temporarily lifted the sawmill industry out of the pit, but the benefit diminished even more with Sweden's stronger devaluation. The Finnish state also claimed part of the companies' devaluation gains through export duties, which were particularly ill-timed for the industry.

The forest industry and MTK (Central Union of Agricultural Producers and Forest Owners) began renegotiating timber price recommendations, with the words of major companies carrying more weight in the final outcome than those of mechanical processors. It might have happened that consensus was achieved by raising log prices when pulpwood had a greater significance for the profitability of large industries.

Cartel in force

In times of scarcity, mutual timber procurement cooperation among forest industry companies did not work as desired, and during the 1980s, industry figures, according to Niklas Jensen-Eriksen, spent endless hours trying to patch up the cracks and develop cooperation. Iisveden Metsä participated in various cooperative circles as long as there was benefit in timber procurement. However, the straw that broke the camel's back came at the meeting of the Itä-Suomen Puuyhtymä (East Finland Timber Group), where it was announced that the company's share of timber stands was zero.

The rifts between independent sawmill companies and large integrated forest industry giants were exacerbated by the "chip war" that raged in the 1980s. Selling wood chips was an important source of income for sawmills, and efforts were made to obtain a fair price. The situation escalated when the Industrial Wood Association, controlled by large companies, sought to tie the price of chips to the price paid by sawmills for logs. The increase in log prices, as observed from statistics, meant that sawmills received less for the chips they produced. Moreover, sawmills paying better log prices could also be subjected to boycotts or have their delivery addresses changed to less favorable ones. In Suonenjoki, the joy of good log prices was short-lived when Iisveden Metsä was forced, through the power of chips, to curb its willingness to pay.

It was clearly a cartel, about which some sawmills complained to the newly appointed competition ombudsman. Competition ombudsman Olavi Väyrynen acknowledged the situation and took the largest buyers to court. The court acknowledged the companies' purchasing cooperation, but no cartel conviction was issued. Companies still had to settle matters among themselves, now in an even more suspicious atmosphere.

Finland's sawmill productions, export volumes, and export prices fell sharply in the 1980s. According to Iisveden Metsä's estimate, a 20% price increase would have been needed for sawn softwood to achieve a positive profit margin. The devaluation of the Swedish krona was the final blow to the profitability of the sawmill industry in Finland.

Buyers complained

With the weakened price level and poor market situation, sawing was reduced, and staff had to be temporarily laid off at times. In the worst cases, the market situation became so difficult that buyers left goods uncollected from the ports. According to tradition, in Iisveden, they tried to avoid buyers coming from south of Marseille, some of whom had a tendency to renege on contracts.

Some foreign parties sought to benefit from sawn timber sellers by improper means. Once, a Danish buyer complained about excessive moisture content in the timber delivered to the port. H. Tapio Sivonen, suspecting fraud, traveled with Metsäntuottajat's CEO Pekka Hokkanen to Copenhagen to investigate a batch that was the subject of the complaint. It turned out at the port that the planks had already been sold onward. No compensation was required for this complaint.

The sawn timber market depression continued in 1982. Especially Iraq, Syria, and Egypt proved to be unreliable trading partners. Due to the weak market situation, employees had to be laid off at the end of the year. The implemented devaluations of the markka did not significantly improve the profitability of sawing because Sweden devalued the krona even more strongly. Due to losses, sawing was reduced.

In 1983, the competition in log procurement eased slightly when Rauma-Repola ceased production at the Peura sawmill. Iisveden Metsä hired unemployed workers from Peura sawmill initially on a temporary basis.

Good price for timber

According to the Finnish Forest Research Institute, the price of timber in Suonenjoki in the early 1980s was 4-10 marks per cubic meter higher than the average in Northern Savonia. This was announced at a forestry association meeting, where a positive reason for this was found. Iisveden Metsä exceeded the price recommendation by 5-10 marks in its settlements.

Savon Sanomat reported that Iisveden Metsä was later brought back into line and into a smaller price competition by threatening to stop receiving chips.

Better momentum was gained in timber sales after the price recommendation agreement was reached in 1984. However, the members of the Finnish Forest Industries Federation were obliged to limit timber usage. Iisveden Metsä committed to a purchase ceiling of 94,000 cubic meters of logs. The organization also sought to influence the marketing of companies' products; Iisveden Metsä also committed to domestic marketing cooperation through the Finnish Sawmill Owners' Association.

Company-specific timber ceilings were also defined at the national level in 1985. Iisveden's "quota" was slightly raised when the purchase cap for timber was set at 100,000 cubic meters of sawlogs. Both pine and spruce were processed at the mill according to market conditions in the mid-1980s; however, pine stands were emphasized in purchases, and the share of pine sawlogs in procurement rose to 59%.

A national price recommendation was again set for timber, but for spruce, the price decrease was deemed too small, and the increase for pine was considered unjustified. In the fall of 1985, sawing of pine was found to be unprofitable due to price decreases.

In October of the same year, the change in log supply and price was brought about by the Manta storm, which caused significant damage in Inner Savonia. The sawlog procurement target was easily achieved due to increased supply. However, placing pulpwood on the domestic market was found to be difficult. Exchanging them to softwood logs, however, was successful.

There was already a need for investments in Iisveden in the mid-1980s, but they were abstained from due to the crisis in the sawmill industry. Only essential repair investments were made. A fire in the drying kiln at the end of February 1987 destroyed two drying chambers. The damages were covered by insurance, and the kiln was rebuilt. Rental drying was needed in the meantime.

In 1988, the financial situation was found to be tight. The supervisory board granted the board authority to drastically adjust operations and sell unnecessary fixed assets. At the same time, the Kansallis-Osake Bank, which financed the company, demanded that the company's loans be paid off for amounts exceeding 9 million marks. The bank also demanded plans on how to make the company profitable. The bank's demands were mostly covered by selling properties in Iisvesi village, along the shore of Iisvesi, and in Pielavesi, as well as a gravel pit located in Iisvesi.

Transition from Forest to Market

During Aulis Sahimaa's years of service until 2022, significant changes occurred in timber harvesting and the entire chain from forest to market. In the past, horses and crosscut saws were used, then the transition to machine harvesting, and nowadays, technology has advanced so much that there's no need for paperwork anywhere.

"Nowadays, if a timber deal is made, sawn timber may already be shipped abroad within two weeks. In the past, it could take up to two years from the timber deal to the sawn timber being sold."

Aulis Sahimaa started working for Iisveden Metsä in the autumn of 1981. Before his job as a buyer, he had worked for four years in the forest association in Keuruu. He was familiar with timber deals because the associations organized joint sales back then, aiming to strengthen sellers' position in the timber markets.

"We had some of the country's first joint sales at the Keuruu association. They were organized by village. The first forest management plans were then in hand, and they were updated manually."

When he started working for Iisveden Metsä, Aulis Sahimaa's first buying area was the municipality of Pielavesi. There wasn't much guidance from the company on making deals. You just had to follow the local price level and act accordingly. At that time, both spruce and pine were bought. The CEO's instruction was that at least half had to be pine.

"The company didn't give very precise prices. You just had to find out the market price and pay accordingly. Sometimes there was a limit not to exceed."

In the early years of Aulis Sahimaa's career, trees were felled manually, and a lot of procurement trade was done. It was worthwhile for forest owners to cut logs themselves, which is completely obsolete now.

"It was daunting at first when my predecessor told me that at best there could be 10-15 lumberjacks working, and I had to make the invoices manually. I wondered how I would manage, but soon it started to go smoothly."

For payments, there was an old checkbook where sums were written and handed over. Checks were good because there was no need to use cash. Sometimes, checks were also used for timber deals.

In Pielavesi, Pekka Korhonen was the forwarder who guided practical matters. Winter roads were built, and lumberjack lists were compiled. Eight working hours a day weren't enough then. At that time, areas were frozen in winter, and bundles were dropped there. There were three drop-off points in Pielavesi. The company had its own drivers who transported the bundles to the shore.

"There were several sawmills in Pielavesi at that time. There was Säviä sawmill, and the Pyhäjärvi sawmill bought wood from the area. Money didn't always seal the deals. After being in town for a few years, trust was built. It was important to keep one's word and not be too bureaucratic."

According to Aulis Sahimaa's recollection, Managing Director H. Tapio Sivonen got angry once.

"Once I bought really good pine at a good location. When the purchase documents reached the office, the CEO called: 'We've bought such expensive timber that we can't accept it. It's strange that we don't have to pay in gold bars,' the CEO declared. Well, eventually those logs fit perfectly into the saw frame."

"The first timber deal was in Joutsenniemi, Pielavesi. The sellers were an old farmer and his son. It was a large deal, two thousand cubic meters. We sat for a while having coffee until the farmer asked his son to join him in the back room for a private talk. Then the deal was made."

"The largest timber deal was with Rautalampi municipality in the late 1980s, which was done together with Enso. Enso took pulpwood, and the logs came to us. There were 27,000 cubic meters of wood, and it was harvested over several years, with four machines working."

Sensitive Competitive Situation

The issue of “Savujako” in timber deals is still a critical topic, according to Aulis Sahimaa.

"It was there, but the sawmills weren't involved. In my opinion, the big companies had lists indicating which area belonged to which company. Later, it could happen that a competitor called if I had submitted a bid. Then there wouldn't be any greetings for many days, they held such grudges."

"In a way, the same tradition continues in a different way even today. Before, customers were just individually named. Nowadays, companies make cooperation agreements with forest owners and pay bonuses and offer benefits for forest management, and it's perfectly legal. The thing has just changed its form."

Aulis Sahimaa was in Pielavesi as long as timber was transported to the mill by floating. Matti Virtanen rearranged buying areas when he started as CEO. At that point, all wood came to the mill on wheels.

"The first area Matti gave was Rautalampi and Konnevesi. Then I gradually started buying from Kuopio when I moved here."

"UPM had its own production facilities in Kuopio, and the company's men didn't really like it when I came to town to buy. On the other hand, the forest association and landowners liked it."

The biggest change during Aulis Sahimaa's career was the transition to mechanized logging.

"Suvela had the first machine in Suonenjoki. Initially, the work was done so that lumberjacks felled the trees and the machine sawed. The lumberjack's work ended when felling heads were developed for the harvesters. At Suvela, the father sawed the trees, and the mother measured the logs, as there was no IT at that time."

"It was one of the first machines that felled and measured when I made a deal for good spruce. I asked the owner if a harvester machine could come for harvesting. This was done when the owner didn't object to the machine. After the trees were harvested and measured, the owner had second thoughts. Seeing the result, he said, 'Aulis, if it is in my hands, no harvester machine will come to my forest anymore.' The owner was very particular about the distribution of the trees, and he thought the machine couldn't do it accurately enough."

Thirty years encompass a great change. Aulis Sahimaa wonders how logging could develop further from here.

"That's probably the final stage when a machine can fell, saw, and select trees from thinning by itself. Surely, this is how it will be fifty years from now."

Did the company stagnate?

"In the late 1980s, the company sort of stagnated. I also started to wonder how things would go for this mill. When Matti Virtanen came, major changes began," Aulis Sahimaa recalls.

The new CEO began developing technology for the mill as quickly as it was economically possible. Iisveden Metsä's investments came at the right time, so the debt burden didn't become too large.

According to Aulis Sahimaa, Iisveden Metsä has always had a good reputation among forest owners. Although a couple of hundred timber deals were made annually in his own name, only a couple of times was the company's financial situation questioned.

Good relationships with forest associations have been crucial points in his career. At best, he got 60 percent of his area from authorization sales. Cooperation with the Pielavesi Forest Association continued even after Aulis had moved away from the area.

"You can save on everything else, but forest dues must be paid on time. Iisvesi has never had overdue payments, so the company has a good reputation in that sense. Another thing is that we repair what has caused damage, for example, in timber harvesting."

The Dog Opened Doors

"I've always had a dog with me when visiting forest owners. Acquaintances might advise beforehand, 'Take the dog with you when you come.' The dog also learned to recognize houses so that when we arrived at a yard, it would start trying to get into places where it had been treated well," Aulis Sahimaa says.

"Many timber deals have been made with the help of the dog. It has been an easy companion since during the day I could often let it loose the forest instead of having to take it for a walk separately. Once there was just new snow, and when I went into the woods, I saw lynx tracks. That's when I caught the dog and took it back to the car."

"In the old days, it was more common for forest owners to contact us, and timber deals started from there. I've made all kinds of deals, and towards the end, a lot of authorization deals."

"The urbanization of forest owners has mainly been seen in the fact that they can go to see the logging areas by themselves. If the owner lived nearby, they usually wanted to be involved."

Authorization deals were easy compared to direct deals. Problems were also easy to solve if you had good relations with the forest association.

In the late 20th century, technology also came into service for buyers.

"Not everyone liked it when we started working on computers, but it suited me. I've always thought that you have to be interested in everything new. Some forest owners didn't even like smartphones, but I aimed to update my technology every two years," Aulis Sahimaa says.

in the 1990s, the focus shifted to being customer-oriented

Capital Replaces Labour

many things changed in Iisveden Metsä's operations in the 1990s. The change in direction began with a change in CEO. Matti Virtanen, having worked in previous positions in Iisalmi, Kyröskoski, and Uimaharju, was accustomed to developing production technology and practices in sawmills. In Iisveden, there was a strong need for reforms, and they were implemented as quickly as the capital situation allowed.

Concurrently with the introduction of new technology, the focus at Iisveden shifted deliberately towards customer-oriented sawing. Moving away from bulk production also changed trade relationships and export logistics. A growing portion of sawn timber was delivered to customers as tailor-made products in truckloads from then on.

Other significant changes for this decade included abandoning pine sawing, ending log driving, and completely moving away from air drying. The lumber pilings disappeared from the site, making room for a new company and a completely new type of processing.

The sawmill industry across Finland was rapidly transitioning from labour-intensive to capital-intensive. New technologies were expensive, but improved productivity and savings in labour costs made their acquisition worthwhile. The hurdle was obtaining the capital needed for technological production changes. Not all sawmills had the resources by the late 1980s.

By the turn of the 1980s and 1990s, Iisveden Metsä's lumber production per employee was around 400 cubic meters per year. With the reforms under Matti Virtanen's leadership, this figure began to rise year by year, and by 1997, the annual production per employee exceeded the 1000 cubic meter mark. This wasn't enough, so the development continued.

Thanks to the change in strategy, Iisveden could efficiently produce products directly for buyers. Logs were cut to order in the forest. As part of the change, the sawmill's product range became much narrower than in the early decades.

Invest or die

In mechanical forestry, the company's ability to invest sufficiently and at the right time is crucial for its continuity. Often, this requires that almost everything the sawing produces is reinvested in the company. Only in rare good years can profits be distributed more generously to owners.

Technological development has also meant that investment costs have risen. When almost all companies have the ability to invest roughly at the same time, projects tend to accumulate. Investments seem to be a race against other industry entrepreneurs. Busy years lead to problems with availability, including key machines and equipment.

For independent sawmill companies, the core of their business is in the production of sawn timber and its further processing. Even today, opportunities to compete on cost efficiency are limited, and the importance of higher product sales prices based on customer orientation is significant for economic success.

Matti Virtanen justified and laid the groundwork for future investments well in advance. Action was taken when the capital situation was under control. In the 1990s, Iisveden began a series of investments, starting with the construction of a new heat plant, while at the same time transitioning the office into the computer age. After the completion of the heat plant, the decision was made to build a new saw line. The investment in the hew-saw reduced 11 sawing tasks at once.

The hew-saw was put into operation in the early part of 1993 within a few weeks. The next investment in lumber sorting required more money and time to materialize. The combi plant was put into operation during the summer of 1996. The investment in a plant sorting both fresh and dried lumber was expensive and was completed at a difficult time. The raw material situation became worrying, and at its shortest, log inventories were only enough for about two weeks of sawing. Iisveden had traditionally maintained inventories of at least three months.

The next major investment for the sawmill was the modernization of log sorting, completed in 1998. With the investments made, annual production could be gradually increased. The goal for 1999 was 50,000 cubic meters of sawing, which was exceeded by just over 10 percent. The proportions of wood species were changing so that only 10 percent were to be pine. The following year, pine sawing was completely discontinued.

In the late 1990s, Matti Virtanen presented plans for the renewal of the saw line once again. The growing raw material demand of the glued laminated timber factory built on the neighboring plot was the reason. Moving to a new hew-saw would also help achieve a better utilization rate in production. However, acquiring a more efficient sawing machine was not yet possible at this stage.

Getting rid of log driving

A significant change occurred in the harvesting and transportation of forest wood to the sawmill at the same time as the sawmill was completely renovated. Mechanization of harvesting began in earnest in the 1980s, and by the early 1990s, the proportion of mechanically harvested wood had risen to over half. By the end of the last millennium, the proportion of wood harvested on the “work glove line" had dwindled to less than a fifth.

Transitioning to land transport only became relevant from the mid-1980s onwards. The strong impetus to end log driving came with the cessation of the Pielavesi procurement district. Abandoning log driving simplified the wood supply chain and overall logistics. When log driving ended, the "fleet" was sold off. The tugs "Metsä" and "Tapio" are still in operation, in the hands of enthusiasts.

The lumber market situation was poor in the early 1990s, tightening the financial position. Other problems arose: a port strike hampered exports, and Finland's devaluation hurt. The company had currency loans, the cost of which skyrocketed. Fortunately, the company also had export receivables, which helped offset the currency losses within a few months.

The investment in hew-saws in 1993 came at an opportune time for the lumber trade. Due to market recovery, the results quickly began to look better, but the good phase did not last long.

In 1995, a decision had to be made about participating in an investment to build a glued laminated timber factory on the site of the sawmill's former lumber yard. Despite tight capital circumstances, the company joined the project, intending to start a completely new factory producing glued laminated timber, mainly owned by a Japanese company. According to the original plan, Nordic Lumber Co was supposed to be the main owner, with the company's management and Iisveden Metsä Oy as minority shareholders. The company's share of the investment was financed by selling the land for the factory to the city of Suonenjoki.

The ownership of the glued laminated timber factory took shape, but the project progressed steadily under the guidance of Antti Väyrynen. The company's name even changed before the operation finally started. The company was ultimately established under the name Oy Finland Laminated Timber. Contrary to the original plans, Yamani Rinsan Co became the Japanese owner, but only temporarily. Already in 1998, Antti Väyrynen and Masafumi Morikawa acquired a majority stake in the factory. Iisveden Metsä remained a minority owner with a 20 percent stake.

From Post Girl to Career Start

kirsi Hämäläinen's career at Iisveden Metsä began as a post girl in 1980. The first time, office manager Helvi Hakkarainen hired her after her matriculation examination; a permanent job was available as soon as she had completed her studies at Pieksämäki Business College.

"I didn't have any dream profession. Then I just heard that help was needed in the office. I went to see Helvi Hakkarainen, and we agreed that I would start working the following Monday," Kirsi Hämäläinen recalls.

"The sawmill was like its own world, and I had to learn everything from scratch. Of course, school provided certain skills, but everything here was so different."

At the beginning of the 1980s, the sawmill's office employed office manager Helvi Hakkarainen, Liisa Sikanen, Managing Director H. Tapio Sivonen, and sawmill manager Pentti Niemelä, as well as a post girl, who changed more frequently. Monday mornings always meant weekly coffee breaks, where the foremen came to the office for coffee, and we could discuss things together. Coffee was brewed on the stove, and there had to be Myrna cups and cream for everyone.

At the beginning of her career, Kirsi had to be on the move a lot:

"I ran bank errands and picked up the mail. In Iisvesi, there were branches of the cooperative bank, the savings bank, and the Post Bank at that time. We would go to the post office at the same time. Helvi Hakkarainen prepared the tasks that needed to be done each time. On payday, I had to withdraw money because some employees still wanted to be paid in cash at that time. Sometimes it was a bit scary when I had withdrawn a large amount of money and rode my bike to the office. However, nothing bad ever happened."

Before, the foremen marked the hours worked in the time books, and then the wages were calculated and recorded manually in the personnel cards, from which the information was copied onto pay slips. On payday, you had to go and distribute the pay slips and wage packets in the sawmill's lunchroom until at some point the foremen took over the job.

The forest department handled its own accounting. Money was transferred from the office to the forest department's account, and they handled the paperwork. Later, even the payment of lumberjacks' salaries was transferred to the office.

Additionally, the post girl's job was to check the woodchip wagons and other wagons every morning to see what had been loaded. Then she had to check if the waybills were in order. Mooses Kantanen was the trainman, and he was strict about having the waybills ready. When filling out the waybills in a hurry, your hand might tremble a bit.

"It became a habit that when you heard the train whistle blowing, you had to have the papers ready."

"When the sawn timber was shipped from the sawmill by train, I had to check which wagons were leaving every morning. The train queue could be quite long, and the sawn timber was covered with rental tarps. Therefore, you had to carefully note down the numbers of the tarps to be able to check that all the tarps were returned from the port on time."

"The information about the wagons and their contents was recorded on a rearman's receipt attached to each wagon, and the waybill was given to the trainman. It could happen that the train came to pick up the wagons while the last wagon was still being loaded. Then you had to hurry to get the information so that you could prepare the papers for the wagons leaving with the train," Kirsi Hämäläinen explains.

Everything changed when transportation shifted to trucks. This happened during Matti Virtanen's time. They had to make the change when VR discontinued train transport from Iisvesi.

Helvi Helped Move Forward

For Kirsi, who was born in Iisvesi, a job at the sawmill was a natural choice. The sawmill's whistle had been part of the rhythm of life at home since childhood. The entire Hämäläinen family is strongly committed to Iisveden Metsä, with family members also working at the sawmill.

Kirsi Hämäläinen's enjoyment of her work has been influenced by, among other things, pleasant colleagues and varied tasks. Her first permanent job was handling shipping matters, and later her career continued in accounting tasks and various other office routines. Since the outbreak of the coronavirus pandemic, Kirsi has mainly been working remotely.

"I like remote work. It has its own peace and, of course, its responsibility to ensure that the work gets done."

In Kirsi Hämäläinen's opinion, there couldn't have been a better boss than Helvi Hakkarainen. The childless office manager lived upstairs in the office and worked long days.

"Helvi Hakkarainen was meticulous and demanding but very nice as a person. I got along with her very well. There wasn't anything you couldn't ask her about. She always had the patience to help and focus on others' problems."

Collaboration with Shareholders

"I probably wouldn't have stayed at the sawmill for so long if I hadn't enjoyed it. Changes in job descriptions have helped me enjoy my work, as well as the changes made in the office over the years," Kirsi says.

Matti Virtanen brought changes to the office as Managing Director. That's when computers, new programs, and modern equipment were introduced. The work has been meaningful as she has had the opportunity to learn new things at various stages.

Shareholders may call Kirsi Hämäläinen when they find old share certificates in their grandfather's drawer. Then they clarify what is known about the shares: whether dividends have been collected, and so on. Usually, Kirsi finds the contacts with shareholders enjoyable.

"Back in the day, in early summer after the general meetings had been held, shareholders might come to the sawmill in a queue to collect dividends. We had to make sure we had money available to pay dividends in cash. Then you got to know people better. Nowadays, much of the business is done over the phone or by email."

There used to be much more traffic in the office. There were even cash buyers of sawn timber. Some might come weekly to buy the timber they needed and pay for their purchases in cash at the cash register.

"It's been good to see this whole change and be part of it. Nowadays, almost everything is done on computers, and hardly any papers are handled at all."

The Innovator Takes Charge

the Iisveden Metsä sawmill was in need of significant modernization when Matti Virtanen started as CEO at the beginning of 1989. The need for modernization was also recognized by the company's employees. The biggest problem was the scarcity of capital needed for investments.

Matti Virtanen, who had a degree in wood industry engineering, had extensive experience in the sawmill industry when he joined Iisveden Metsä from Iisalmi. His employment began in November 1988, and he started as CEO at the beginning of 1989.

The beginning of his career was, in a way, a search for his own place.

"After Uimaharju, Kyröskoski, and Iisalmi, Iisveden Metsä felt like a place where I would enjoy myself.”

"Maybe I was curious or eager to experiment when applying to Iisvesi. I had worked at the sawmills in Iisalmi for seven years, where I was responsible for technical matters and investments. I thought that in a smaller company like Iisveden Metsä, I would get to see and do things more diversely and handle a wider range of tasks, although my family was initially hesitant about moving to Suonenjoki.”

"The idea of the diversity of work turned out to be true. I could do various tasks and as much as I wanted; I liked it a lot from the beginning. There were various challenges, some of which I couldn't have anticipated." Before applying for the job, Matti Virtanen had visited Iisvesi once before. The primary impression left from the visit was that it was a traditional circular frame saw sawmill.

"The industry was familiar. I knew it well, and I also had experience with significant investments, for example, in Uimaharju, so it felt secure to take on the task.”

A few years before Matti Virtanen's arrival in Iisvesi, a business analysis by Jaakko Pöyry concluded that Iisveden Metsä should focus on producing dimension lumber ordered by customers. The production of such lumber increased significantly afterward, as the model was familiar from the sawmills in Iisalmi.

"The customer base changed a lot when the production of dimension lumber increased. We started selling more to small companies with tailored deliveries. Sawing according to customer dimensions became easier as the saws developed, and logs were prepared to the correct length.”

With the sale of dimension lumber, there was also the practice of transporting goods directly to customers by trucks. Until then, finished lumber had been transported to the port by railcars and then by ships in large quantities to export markets. The shift to truck transport gained momentum when VR discontinued running locomotives in Suonenjoki. That's when wood chip and bark deliveries also shifted to rubber wheels.

Matti Virtanen's arrival as CEO of the company coincided in many ways with a transitional phase for the entire industry. At the sawmill, the last pilings of boards were dismantled, and the last log drives were on the water. As a sign of transitioning to a new era, they even got rid of their own tugboats.

At that time, there was no other sawmill among forest owners that produced dimension lumber. "When I came to Iisvesi, I was used to a different way of doing business. In Iisalmi, lumber was sold by truckloads, and Metsäntuottajat sold long lists. There was some adjustment with Metsäntuottajat.”

Outdated Sawmill

The new CEO immediately saw that technically, the Iisvesi sawmill was outdated. Logs were measured automatically everywhere, but in Iisvesi, measurements were still taken manually. It was actually the most outdated task.

The saw line was similar to a frame saw line as in Matti Virtanen's previous workplaces. After the frame saw, there was a pull table, which wasn't common in many places anymore. Post-processing was also inadequate, and there were only two modern drying chambers.

According to Matti Virtanen's recollection, there weren't really any surprises in the company's technology. Among the new tasks, handling the company's finances was a bit strange since it wasn't part of his job description in previous workplaces. Office Manager Helvi Hakkarainen was invaluable in this regard, as she had everything under control and kept the paperwork in order.

Financially, starting as CEO was challenging. There was little money for buying logs, and even banks were reluctant to lend. Representatives from the main financing bank occasionally visited to see how the company was doing. Around the turn of the 1980s and 1990s, at least 50 sawmills had to close due to KOP Bank reducing their risk in the industry.

"Fortunately, the local manager of SYP, Kimmo Viljaharju, was interested in financing the company. The cooperation began with SYP providing a fairly large loan, secured by the company-owned residential building. KOP didn't like this and wanted to get rid of the company's financing. The situation was resolved by Kansallispankki gradually releasing collateral as old loans were paid off. In return, we obtained new credit from Yhdyspankki against the collateral.”

The head of the Kuopio branch of KOP's business division, Jorma Saarela, wished the company luck but doubted how it would fare. Later, the same man stated that KOP had made a miscalculation when abandoning financing for Iisveden Metsä.

"In between, there were even good years and we were able to invest. The decisive thing was that we managed to buy the first Hew Saw in 1993. I remember the bank provided financing of one million marks for the investment at a 16 percent interest rate. That's when the positive cycle really started, as we were able to invest and increase production. Until then, everything had to be kept very streamlined."

Matti Virtanen had a clear vision when he started, that the sawmill's operations had to be rationalized. There was a lot of hired staff relative to the amount of production. With the investments, the number of employees decreased, but letting people go felt heavy.

"The employees reacted very positively. It even felt like the employees were waiting for something to happen in the company.”

Getting Rid of Suspicions

Matti Virtanen suspects that there was clearly some suspicion towards him when he started in Iisvesi. In the winter of 1989, the sawmill was shut down for four weeks due to poor raw material and market conditions, and the workers protested with a walkout, but after that, there were no more problems.

"The spirit was good all the time, and the employees did their best. Developing the company would have been much slower if there had been more difficult employees to deal with."

The change in CEO didn't affect timber purchases much because the buyers did their job independently. In monthly meetings, the CEO was kept informed of the situation.

"I didn't get involved in wood purchases from private forest owners because I didn't handle it well. However, I did manage the cooperation with companies supplying wood. That aspect increased all the time as our own wood share decreased."

During the six-month wood sales strike in 1991, Matti Virtanen didn't notice any impact on the company's operations. The production volume was so small at that time that the necessary logs were easily acquired.

"The cheapest price for wood that I remember was just before the devaluation of the markka. A local contractor sold logs for 120 marks per cubic meter. The seller said it was the worst deal he had ever made."

Relationships with major forestry companies depended mostly on people. Cooperation with Enso probably went the best. There were far fewer deals with Metsäliitto. At one point, the district manager of Metsäliitto suggested that the cooperative could handle the sawmill's wood procurement entirely. It was a clear offer, but it wasn't even considered.

"If the ax marks come to the end of the log, it's a sign of death," Matti Virtanen recalls the general view of independent sawmills.

Failed Takeover Attempt

The company's hostile takeover became public very quickly after Matti Virtanen started as CEO.

"It probably wasn't a month after starting the job when Mika Laitinen came into the CEO's office. He said the brokerage firm Siikavirta & Laitinen had bought the majority of the company's shares and wanted to be involved in the company's management. I knew nothing about it. I said it wasn't that simple. Helvi Hakkarainen might have known something because she came to ask what this Laitinen wanted. She was firm that these boys definitely wouldn't be taken into the company."

"I then arranged a meeting with the auditor Risto Mäkiö on how to proceed. The board had decided not to accept a new owner, but still wanted to negotiate. Hannu Huhtinen joined the meeting. The meeting was arranged at the bank and there were Mika Laitinen and his mother. The bank manager wasn't present."

Matti Virtanen asked where the brokerage firm intended to get the money for their operation. Mika Laitinen said the money would come from the company's cash. At that time, it was fashionable to use the capital of the taken-over company to pay for the takeover.

The brokerage firm had control of almost a third of the company's shares at most. They could have done anything if they had managed to register the shares.

"The boys probably calculated that we couldn't afford to buy back the shares. Our luck was that the company had accumulated free own capital."

To fix the financial situation in 1988, the company's assets in Iisvesi and Pielavesi were sold. The equity had improved since the previous spring's financial statements, so the company had enough free own capital. First, it was calculated that the shares could be redeemed. The redemption value of the share was a little over ten marks according to the tax value.

"The shareholders' meeting after the takeover attempt was a bit nerve-wracking, but the matter wasn't even discussed there."

When the usurpers realized that they wouldn't be accepted as owners of the company, they tried to sell their shares to, among others, the Kopra sawmill, which was expanding its operations.

"I met Keijo Kopra afterwards, and he said he wouldn't buy such a sawmill."

The company's capital was scarce after redeeming the shares. To rectify the situation, an issuance was arranged the following year, which raised money roughly equivalent to what was needed to redeem the shares. The initial public offering didn't go exactly as planned, but later marketing to local communities brought in some additional funds.

"I visited all the cooperative banks in Inner Savonia and got them to take subscription lists to their counters without a fee. The share offering succeeded surprisingly well with such little advertising and small resources."

Hew Saw as the Key to Change

In the early 1990s, Iisveden Metsä was somewhat at a standstill. Production needed to be increased, and it couldn't be done with a frame saw. There were too many workers for the amount of production. Banks, on the other hand, said they wouldn't provide financing without an equity stake.

"The company was in a bit of a sticky situation. Capital was scarce, and the board wasn't very keen on investing. The matter was resolved after a trip to the Multia sawmill, where they had a Raution hew saw in use. At the meeting held after the trip, I told the board that we would be in trouble if we didn't do anything. Hannu Huhtinen said we probably need to get a new sawmill, and that's how it was decided."

Matti Virtanen had previously talked to bank manager Kimmo Viljaharju, and with SYP's financing, they managed to buy the sawmill, with the machines pledged as collateral.

"It's such a good machine that no hew saw company has gone bankrupt." Matti informed the board. The hew saw has a lower utilization rate than a frame saw, but its efficiency is superior.

After purchasing the hew saw, the sawing volume was increased. At that point, the authorities also started to look more favorably upon the company, and cheaper financing was obtained for the upcoming investment in the grading plant.

Matti Virtanen's principle has always been not to buy prototypes but rather machines that are already in operation somewhere.

"The Kombi plant was a huge investment relative to turnover, a damn big risk. I saw that there was no other option to move forward. It won't work without a big one-time investment. With the help of the bank and the TE Center, we managed to make it work."

By 1996, the key investments had been put into operation, and productivity had increased significantly. The number of employees was reduced from over 70 to 40, and production doubled at the same time. There was a significant benefit in productivity. The Kombi started well because the concept had been well tested. Lekopa had already made several such facilities in Finland.

"After the completion of the Kombi plant, we were at the industry average in terms of technology and productivity."

Focusing on Spruce Paid Off

Until the late 1990s, both pine and spruce were sawn in Iisvesi. The proportions of timber species were changed according to the market situation and the availability of logs.

According to Matti Virtanen, there are significant practical problems with sawing two timber species. A much larger stock of both logs and sawn timber is needed, and changes in timber species cause production dips. There's also more work in marketing when there are more than one timber species.

"At the time we started, pine sawn timber was much more valuable and sought after, and pine logs were more expensive. Now the situation has reversed."

From the perspective of the forestry sector, giving up one timber species is difficult because there is much more wood available to sell or exchange elsewhere.

"We collaborated quite a lot with Keitele: Iisvesi took the smaller logs, and Keitele took the larger ones. A lot of joint stands were purchased. The cooperation worked well until Ilkka Kylävainio bought a hew saw for his company."

"It wasn't in their interest to cooperate anymore after they needed all the wood for processing. We also cooperated with other wood buyers, sometimes it went a bit reluctantly, but still."

"In hindsight, when there was a shortage of wood, the idea of ​​resuming pine sawing came to mind, but it hasn't been done yet. I think it's been good this way. It's much easier to manage."

Partnering with FLT

In the 1990s, the Japanese discovered that northern conifers are good building materials. Entrepreneurs in the industry began to visit Finland and set up new companies, including the Misawa sawmill in Mikkeli. Inner Savonia was involved in the development of the industry. Antti Väyrynen, who led a wood processing project in Suonenjoki, became acquainted with the technology and functioning companies. After his trip to Japan, he began to look for partners for laminated timber beam production. Contact was made with Iisvesi, but Matti Virtanen wasn't initially interested in the idea. After its own major investments, Iisveden Metsä didn't have the funds to invest in a joint venture.

However, they didn't want to bury a good idea. Väyrynen stuck to the project, and financing possibilities were examined more closely. Further investigations led to the city of Suonenjoki buying an old sawmill site from the company, and the money obtained from it was invested as capital in the beam factory. Antti Väyrynen secured additional financing, and in addition to Finnish parties, Japanese investors also joined.

"The start was quite difficult in beam production. The new company didn't find it easy to get deals, but persistent efforts paid off. FLT has over time managed its affairs and gained a reputation as a reliable supplier."

The beam factory bought almost half of Iisveden Metsä's sawn timber production for a long time. The situation changed only after 2006 when IPO Wood ended up in the hands of FLT's individual owners.

"It was probably Antti Väyrynen's idea from the beginning that he needed to take sawing into his own hands. He offered Iisveden Metsä even closer cooperation, but offered so little for the sawmill shares that we couldn't accept it."

Detour into Birch Sawing

The birch sawmill acquired in the late 1980s was not, in Matti Virtanen's opinion, the best possible investment. The sawmill purchased from a bankruptcy estate was cheap, but technically it was in disrepair. The small branch office in Vieru would also have needed its own management.

"The birch sawn timber business would have been quite good, but it would have required more investment. The sawmill would have needed its own leader; as it was, it didn't function under Iisveden Metsä. The sawmill was sold to new entrepreneurs who ran it for a few years."

The importance of raw material procurement is even greater in birch sawing than in conifers.

There has always been plenty of action and dangerous situations in by-product sales. The three largest forestry companies agreed for a long time among themselves who would buy the chips from whose sawmill and at what price. Iisveden Metsä did a lot of business with Myllykoski due to good personal relationships.

"Chip sales were difficult for a long time when the Saastamoinen particle board factory was closed. The situation is completely different now. We must ensure that trade is conducted appropriately with everyone."

"I was quite satisfied with my time in Iisvesi. I achieved what I thought and aimed for. On the other hand, there was luck involved too, with a few good years coming in between. The beginning was very bumpy, and there were economic downturns, but towards the end, the situation improved, and there were good periods lasting three or four years."

Matti Virtanen emphasizes the importance of the sawmill's staff.

"No one alone achieves anything; the whole team produces the result; it's by no means a one-man show."

Matti Virtanen sees the future of the sawmill industry positively. The appreciation of timber construction has increased, and wood as a natural raw material is interesting. Additionally, as of this writing, the ongoing war in Ukraine increases the need for construction in Europe for at least ten years. There are threats as well, some of which weren't talked about before.

"Here in the North, we think a little too naively about forest conservation. We do everything very conscientiously in Finland, but that doesn't have much significance for saving the world. We should export technology to developing countries, which would help them with their problems."

After retiring from the CEO position, Matti Virtanen has served on the company's administrative board, serving as its chairman since 2008.

investing profitably in the 2000s

Moderate Growth As The Goal

profitable growth has been the guiding principle of Iisveden Metsä, especially in recent decades. The investment journey initiated by Matti Virtanen has been continued since 2006 by Tommy Lindström, who took over as CEO. Lindström, a young forester skilled in timber trade, immediately faced the challenge of unraveling a messy collaboration upon starting his new career.

Opportunities for the investments needed for growth were scarce in Iisvesi until the separation from the neighboring timber company. The sale of Finland Laminated Timber's minority stake freed up capital for the next technological leap. The split from the timber company was not Iisveden Metsä's goal, but collaboration with FLT had become too difficult.

The separation from the timber factory necessitated an improvement in customer acquisition since the neighboring factory had processed about half of Iisveden Metsä's production for several years. After the collaboration ended, the first step was to build new drying kilns. The old partner bought its raw material as green sawn timber, so there was an urgent need for additional drying capacity in the new situation.

The growth of the company and the opening of new markets have meant that the demands to keep up with technological developments have intensified in the early years of this millennium. Customers' expectations have become more individualized, and profit margins have become smaller.

In the early 2000s, the European sawn timber market was characterized by oversupply, which was also reflected in Finland's sawn timber exports. The growth in sawn timber consumption in Western Europe and Japan was moderate. In Finland and elsewhere in Europe, the real price level of sawmill industry's basic products had been decreasing for a long time.

The targets set by forest owners for their own mill have been met well in this millennium too. In Inner Savonia, prices for spruce logs have long been higher than the average, which has been the only raw material for Iisveden Metsä since the early 2000s. The most significant factor affecting prices is intense competition for wood. Dozens of companies regularly purchase large spruce logs in the area. The price of logs has often risen faster than the price of sawn timber in periods of economic growth and remained too high for profitability during downturns.

Sawn timber production throughout the country has gradually centralized into larger and more efficient units. Overall, the number of sawmill industry companies, locations, and employees decreased in the 2000s. However, production volumes did not decrease at the same rate. The functionality of sawn timber markets has been the most significant constraint on production.

Risk of a major customer

As Finland Laminated Timber (FLT) reached full production capacity, it became increasingly important as a partner for Iisveden Metsä. A significant portion of sawn timber was sold to the neighboring factory at negotiated prices, with strict dimensions and sizes. With a close partner, the sawmill was required to be even more efficient. On the other hand, there was no need to invest in new drying kilns, which would have been necessary for production growth otherwise. However, the market for undried sawn timber was so limited that dependence on the neighboring factory was seen as a clear risk.

As a minority shareholder, Iisveden Metsä received dividends and land lease payments from FLT's success. However, due to the tightly negotiated prices of sawn timber purchased by the timber factory, the results of the sawing operations were weak. The annual results of Iisveden Metsä were crucially dependent on the capital gains from FLT.

Sawing volumes at Iisveden Metsä had been growing rapidly since the late 1990s when the combi plant's operations were fully integrated into production. In 2000, annual production exceeded 60,000 cubic meters, and by 2002 it reached 80,000 cubic meters. As FLT's need for raw materials grew, plans were made to acquire a new debarker and a more efficient sawing machine.

Years of poor results, however, weakened investment opportunities. In 2001, the situation tightened due to the increased price of logs and simultaneously declining sawn timber prices. For the first time, the financial statement had to show a loss of over 700,000 Finnish marks (converted to €1,176,000 at 2022 rates).

The sawmill company's board considered closer collaboration with FLT, which was believed to be beneficial for financing the new production line. Ownership cooperation was also seen as a possibility. However, the plans ultimately failed due to significant disagreement between FLT's management and Iisveden Metsä regarding the value of the companies.

In 2003, Iisveden Metsä achieved a new production record of 86,900 cubic meters. A significant portion of the production was sold to the neighboring factory without drying. There was a need for investment in many areas, but due to limited capital, plans were made to proceed incrementally.

Due to a lengthy strike in the paper industry, sawing had to be reduced in 2005 even before the summer shutdown. The pile of wood chips in the sawmill yard grew rapidly as they couldn't be delivered to the pulp mills. The end of the forest land tax in late 2005 brought a significant amount of wood to the market at a reasonable price. Afterward, the timber market situation changed dramatically, with forest owners who switched to sales taxation showing no interest in selling until the price level had settled into a new normal. The temporary scarcity of logs reduced production levels.

A New Threat from Iisalmi

At the beginning of 2006, a significant business acquisition occurred for Iisveden Metsä when Petri Hämäläinen, Masafumi Morikawa, and Antti Väyrynen acquired Iisalmen Sahat, located in Peltosalmi, from the Aminoff family. FLT immediately started buying raw materials from the Iisalmi sawmill, significantly reducing purchases from Iisveden Metsä. The demands of the new partner became even stricter, and discounts were already negotiated into tight prices.

Due to the increasingly difficult FLT collaboration, it was not difficult for Iisveden Metsä to decide on the first investment target. Additional drying capacity was quickly built for the timber. The two newly erected drying chambers did not completely alleviate the shortage, but they were the beginning of being able to sell more sawn timber to new customers.

Tommy Lindström was appointed as the company's CEO in early June 2006. For about six months, he familiarized himself with the new role and partners until the private owners of the neighboring company set new conditions for continuing the collaboration.

The FLT annual general meetings in the spring of 2007 were decisive. As a minority shareholder, Iisveden Metsä became a statistic when the majority owners transferred the timber factory's business to a new company they had founded.

Väyrynen and Morikawa wanted to buy out Iisveden Metsä's ownership stake in the timber company for themselves. However, they could not reach a consensus on the purchase price through negotiation. The ownership dispute with FLT was finally resolved in 2008 with the help of external experts who found a compromise. The proceeds were used to repay loans and purchase a new (used) sawing machine.

During the neighborly dispute, investments were made at the sawmill to address production bottlenecks. A Valon Kone debarker was purchased, and a preliminary agreement was made to acquire a new sawing line, even though the sawn timber market collapsed. The markets were so weak at the time of the debarking investment that production was stopped, and the sawmill's own workforce was used for the construction of the new debarking line.

The sawmill industry reported poor results across the board in 2008. However, Iisveden Metsä's result for the year was significantly positive due to the sales revenues received.

Ownership Consolidation

The financial crisis that started in the United States began to be felt in companies from the fall of 2008. The availability of all loans decreased, and loan rates rose. In this situation, having a strong equity position was a significant advantage.

In the spring of 2009, a more efficient hew-saw was acquired. Now, bigger logs could be sawn, and the yied rate of logs improved significantly. Production bottlenecks shifted to other areas, with the combi plant's capacity limiting sawing volume growth the most at this stage.

The city of Suonenjoki had been one of the company's largest shareholders since the 1980s. However, the minority ownership was not considered sensible for the city's operations, so Iisveden Metsä was able to buy the shares held by the city (9036 shares). Some of these shares remained with the company, while others were sold in a targeted offering to the company's key personnel.

Shortly thereafter, the shares held by the municipality of Karttula were put up for sale. Karttula made a different decision than Suonenjoki. The municipality allowed residents who were old owners of the company to make offers in the share sale organized by the municipality.

"This firm makes full use of its men," noted H. Tapio Sivonen, who was chosen to continue as a member of the board of directors in 2007, at almost 80 years old. The statement holds true; several board members have served for a long time. The most notable careers have been those of Emil Vehviläinen, who served as chairman of the board of directors for over 40 years, and Pekka Nuutinen, whose membership on the board of directors began in 1926 and ended in 1977. Markus Korhonen started as a member of the board of directors in 1965 and ended as a member of the executive board in 2003.

production records and profitable years

Into a New Scale

"in the early years of the 2000s, saw technology was not the bottleneck of production," assessed Matti Virtanen. According to him, the availability of raw materials was the biggest limiting factor. Iisveden's first hew-saw could only process spruce logs under 23 centimeters, so a significant portion of purchased wood had to be exchanged with other companies. Only about 20 percent of the sawmill's raw material needs were met from its own procurement.

The adequacy of wood was a critical factor almost every year. Log inventories dwindled especially small by the beginning of summer; at their lowest, sorted logs for sawing were available in the yard for only a few days. By adjusting work hours and days off, longer shutdowns could be avoided. As the availability of spruce logs decreased, the board discussed pine sawing on several occasions, but this was never implemented in the 2000s.

Iisveden Metsä got a young CEO when Tommy Lindström, who had been involved in lumber sales at Metsäntuottajat, was chosen as CEO in the spring of 2006. Lindström sought new challenges, and in the CEO position in Iisveden, he believed he could make his mark. In the selection interview, Tommy promised to commit to the company for as long as there were challenges.

The new CEO believed that a revolution was not needed in Iisvesi; continuing Matti Virtanen's work would fit well. The measurable goal was to moderately increase production, which required another step in technological development.

The Iisveden Metsä 2010 project defined the company's key investment targets in the near future. The project included parts of the plant in need of renewal, especially for financiers. The goal was, among other things, to enable more efficient use of the logs acquired by the organization. By expanding the raw material base and product range, the company aimed to enrich the region.

State-owned Finnvera had a varied attitude towards investments in mechanical forestry in Northern Savonia in the early 2000s. Their goal was to diversify the region's business base. Therefore, most of the required capital had to be obtained for the sawmill through self-financing and with the help of banks. Dissociating from Oy Finland Laminated Timber's ownership stake provided the necessary capital injection for Iisveden Metsä's key investment projects. The compensation received under the agreement made in 2008 was sufficient for the acquisition of a debarker and a more efficient hew-saw. Both were factory refurbished, and they were expected to have plenty of usable life left.

The investment need was not limited to these two key parts of the production chain. A new transformer station, improvements to the combi plant, additional drying capacity, and for the growing production needs, a new heating plant were needed. At the beginning of the period, the grading plant was renovated, and camera sorting was introduced, which were significant improvements. The total amount of investments from 2009 to 2012 was estimated at €7.3 million.

The investment program was implemented gradually and much slower than the original plan. As usual, costs also rose significantly higher than originally intended. Nevertheless, operations improved significantly, and annual sawing volumes increased. Since 2012, new production records have been set every year, and the 100,000 cubic meter mark was surpassed in 2016.

Before the new drying kilns were completed, cooperation in drying began with Anaika Wood Ltd Oy. Later, Anaika, which also engaged in sawing operations and laminated beam manufacturing, proposed closer cooperation, even suggesting partnership. However, Anaika's main owners were funds, and the terms of cooperation they proposed were not pleasing to Iisveden.

Sawn timber was dried in Iisalmi in varying amounts. Rental drying ended as own capacity increased. By then, Anaika's ability to receive green material from outside had also diminished.

Growth by Removing Bottlenecks

After the change in the Companies Act, it was time to update the outdated Articles of Association. According to the law, the supervisory board could have been abolished, but it was not considered appropriate in Iisveden Metsä. The company also retained the right of redemption of shares to effectively counter any takeover attempts. The new Articles of Association came into force in 2012.

The completion of Metsä Group's giant pulp mill in Äänekoski in the autumn of 2017 and Stora Enso's investments in Varkaus changed the timber markets over a wide area. Iisveden Metsä entered into long-term wood supply agreements with both Metsäliitto and Stora Enso. Based on these, confidence grew that from the scarcity of raw materials, there would be a shift to good availability of wood. At the same time, prospects in by-product markets improved.

With wood no longer seen as a limiting factor, investments in increasing production were dared once again. Over the next five-year period, investments of over €10 million were estimated, compared to about €9 million invested in production development over the previous 7 years. The basic technology was in place, but increasing production required new investments.

The increased production was mostly sold abroad, so the share of exports had risen to 85 percent of production. Sawn timber was delivered to 21 different countries in 2015. The number of customers and product range grew significantly. At the same time, batch sizes decreased, and customer quality requirements tightened. The company's management saw the need to increase production volume, efficiency, flexibility, and quality in this situation.

The most significant of the necessary investments was a new green grading line, the completion of which removed a key production-limiting step. Sawing could not have been increased until the combi plant, originally designed for about 50,000 cubic meters of production, was supplemented with a modern second grading line. Over 100,000 cubic meters from the combi were processed by rearranging work shifts and partly working on Saturdays, but sawing volume increased beyond this. After the grading line upgrade, annual production rose to over 140,000 cubic meters in 2021.

The agreements with major wood suppliers ultimately did not produce as much raw material as needed. In September 2020, the sawmill had to be shut down for a week due to insufficient raw material availability. At this point, it was time to strengthen own wood procurement by hiring more staff and expanding the procurement area. Now, despite robust production growth, over 40 percent of the raw material is procured by the company's own forestry department.

Change is Continuous

The market situation for sawn timber has varied significantly and rapidly in recent years. Forest damage in Central Europe brought a strong oversupply situation to the sawn timber markets, which lowered prices and weakened demand in the 2010s. This was a transient phenomenon for Finnish sawmills, as the quality of Central European wood damaged by pests deteriorated rapidly. There was sufficient demand for high-quality Finnish sawn products.

In Finland, the fear of forest damage and expectations of restrictions on forestry have increased wood supply. However, the best factor refreshing timber trade has been the good price level that forest owners have enjoyed in recent years.

Iisveden Metsä was long a member of the Finnish Forest Industries Federation and the Finnish Sawmill Owners' Association. The sawmill's CEO often also belonged to the federation's board and its working committee. Gradually, it became clear that the federation and its successor, the Forest Industry Association, did not offer enough value for the sawmill in terms of annual membership fees. In 2015, Iisveden Metsä joined the Finnish Sawmills Association as a member. The new organization offered assistance in promoting the sale of sawn timber and up-to-date statistics on the entire industry's development.

Changes in the labour market have brought new headaches for sawmill companies due to local bargaining. In mechanical forestry, company-specific collective agreements were adopted, which did not go entirely smoothly. The Industrial Union put pressure on negotiations with strikes aimed at sawmills in winter 2022; production continued uninterrupted in Iisvesi despite the industrial action.

Key competitive factors for the Finnish sawmill industry in this millennium have been the good quality of raw materials, industry expertise, and efficient production. Technological advancement in sawmills has been rapid, with the introduction of machine vision and X-rays. Tools for precise measurement and quality monitoring exist, but not all are fully utilised yet. Clear improvements have already been observed; for example, disputes over snow deductions have ceased after the introduction of X-ray log sorting.

The market situation for sawn timber in the early years of the 2020s has been exceptional. Strong demand and good prices have been enjoyed for a considerably long time compared to the industry's history. Iisveden Metsä also achieved its best results ever in 2021 and 2022. In 2023, a market collapse was imminent: demand significantly contracted, and prices melted by up to a third.

Climate Change is a Threat

The key future factors for the Finnish sawmill industry can be considered as climate change, developments in the industry structure, and the actions of competitor countries.

It is quite likely that climate change will increase the availability of spruce logs in the short term. Signs of an increased risk of pest damage have been seen in recent years in Inner Savonia. For example, fear of the bark beetle has begun to accelerate the logging of old spruce stands.

Foreign companies operating in the industry have acquired ownership of several large Finnish sawmills in recent years. This trend is likely to continue because buyers are interested in the quality of Finnish wood and our country's still abundant logging opportunities. A foreign entrepreneur must pay well for wood, otherwise it will not gain a foothold. This will have an impact on future wood procurement.

The past three years have been unstable for the sawn timber markets due to both the pandemic and the war in Ukraine. The fear of the pandemic has subsided, but it will still take years to recover from the war and its effects. The eventual reconstruction is expected to increase demand for sawn timber, but the timeline is impossible to estimate.

tommy lindström's thesis

Continuous Improvement – Vital for the Company's Survival

Becoming a shareholder in the neighbouring lot's laminated timber factory and the eventual divestment from Oy Finland Laminated Timber (FLT) are, according to CEO Tommy Lindström, the most significant turning points in the company's recent history.

The collaboration with the timber factory forced the adoption of a customer-centric approach and production of custom-sized lumber from the forest. This has been a significant change in the company's operations and continues to be relevant to this day. Production of custom-sized lumber is primarily a model used by small businesses in Finland. Despite strong production growth, Iisveden Metsä has been able to continue this approach.

The divestment from FLT, with all its stages, was a laborious effort lasting over a year. As a result, Iisveden Metsä received a strong financial boost for developing production technology. Improved self-sufficiency has helped in financing investment projects until recent years.

Before taking on the role of CEO at Iisveden Metsä, Tommy Lindström worked for seven years at Metsäntuottajat as a sales assistant and eventually as a sales manager. Over the years, the idea solidified that he didn't want to stay in those positions for the rest of his life.

"Iisveden Metsä was a familiar company to me because I had handled sales to Iisvesi, including to Italy and Central Europe, and visited the sawmill a few times. The basic idea of what is done here and how things work was there. I also knew that the company's financial situation was then better than average in the industry. That gave me the courage to apply.”

"In my view, the company was in better shape than average when I started. The concept was clear, and the company was making a small profit even when others were making losses. Many sawmills were struggling at that time. A few of my acquaintances thought I was quite brave to come here. It was a common view of the problems in the private sawmill industry at that time.”

Tommy Lindström did not have ready development plans or grand visions when he joined Iisveden. Things started evolving on their own, and the most significant push for development came from the neighbouring timber factory. The beginning was quite good in terms of getting to know each other when Tommy and Matti Virtanen could go through things together for a few months.

The Old Guard Managed Production

Sawing for FLT went smoothly when Tommy Lindström started on his own. Antti Väyrynen handed over a list every Friday listing the raw material needs for the timber factory for the following week. At best, three days a week were spent sawing raw material for laminated beams and two days for other markets. Clearly, over half of the centercut goods was sold to FLT. The situation changed when more raw material started coming to the timber factory from IPO Wood in Iisalmi.

Initially, the sawmill's production did not run at full capacity, as there was a severe shortage of wood in 2006-2007. Serious consideration was given to sawing pine as well, but that option was ultimately discarded as too laborious.

There were fewer workers at the sawmill than there are now, and they were considerably older on average. The operation clearly revolved around Veijo Boman, Jarmo Nikupeteri, and Ari Väätäinen. These three kept the shop going, and especially Veijo's grip was, in Tommy's opinion, very patriarchal.

"I didn't hear much from the line towards me. The organization was hierarchical, even though the team was small. Work was done in an old-fashioned way: people came to work at the sawmill and then went home. In that sense, a lot has changed. The generation has completely changed, and people's expectations for their workplace are different than they used to be.”

In Tommy Lindström's opinion, the atmosphere at the sawmill was good in the sense that different political groups did not fight each other. No one had the desire or need to show off. Work was done for the company at Iisveden, and the trade union did not cause any problems.

The staff's reactions to the change in CEO were moderate. One older employee had doubted what would happen when such a greenhorn came here as CEO. Opinions changed as they got to know each other better. "I haven't noticed any kind of chilly reception. I didn't want to start bossing around in any way. There was no resistance to change for that reason.”

Forest Owners Appreciate

Tommy Lindström believes that the company has a good reputation among forest owners. The problem has been poor visibility, but a lot of work has been done in recent years to correct that.

"We've invested reasonably well in making ourselves visible. All these newsletters and Instagram updates have been done especially for local forest owners. The goal is for them to notice that we exist and that we have a story worth telling. It's worth selling spruce to us rather than to a faceless stock company." Nordea has been the main bank for a long time, and Finnvera has been the other main financier. There haven't been major problems with financiers in this millennium, but the turnover of Nordea's managers is in a class of its own nowadays.

"In recent times, no personal relationships have been established because the customer-responsible bank manager can only visit the company once before the contact person changes again.”

After the 2008 financial crisis, there could have been a difficult moment in banking relationships. Nordea's then customer-responsible manager was quite straightforward, according to Tommy Lindström, stating that small sawmills would disappear from the world map and only large ones would remain.

"At that point, we had received a reasonable severance payment from FLT, and there was no need to discuss with the bank. It was luck from God.”

Turning FLT Factory into Money

Collaboration with FLT proceeded, according to Tommy Lindström, on its own weight, until the first negotiation on the price of sawn timber. That's when it began to emerge what kind of partner they were dealing with.

In the summer of 2006, there was a good period for sawn timber export prices, and the rise continued, but it didn't seem to affect FLT's pricing at all. Even the rise in log prices was not accepted as a reason for increasing the price of sawn products. Antti Väyrynen only referred to the price at which he obtained raw materials from the Peltosalmi sawmill, which had transferred control to him a little earlier.

"The taste for cooperation started to diminish at that point. In early 2007, FLT then made a purchase offer for Iisveden Metsä's shares. The smoke-out from the company really started when agreement on the purchase price couldn't be reached."

Iisveden Metsä's divestment from being the raw material supplier for the beam company came at a good time because 2007 was an excellent phase for sawmills. Sawn timber could easily be sold elsewhere. The problem, however, was that there was insufficient drying capacity. Anaika Wood, a laminated beam manufacturer, was brought in to help Iisveden Metsä. They had high demand for the sawn timber needed for beams and free drying capacity.

"The separation from FLT was an extremely interesting, stressful, and prolonged process. From the start of the process to the actual divestment, it took about a year and a half."

The separation was a significant turning point in the company's history. The previous turning point was in 1995 when they became shareholders and raw material suppliers for FLT. That's when the transition from sawing falling lengths pine and spruce to sawing spruce to fixed lengths, special dimensions, and customer-centric production really took place.

"All that we do nowadays is based on the same idea. The customers have changed, and the concept has become more complex, but the basic idea was built then."

Making sawn timber to fixed lengths is still not a norm in Finland. Almost all companies sawing over 200,000 cubic meters use falling lengths and produce for large customers. Some specified batches may be picked from the overall falling volume.

According to Tommy Lindström, making fixed length sawn timber is still a good market niche. It may not always be reflected in the price, but there are buyers for the product even when the standard product sawmills don't have any. In the best case, the company has a customer base that can't haggle over the price to the last cent because there are no alternative suppliers.

"The markets move at a slightly different pace, but on average, the price premium is not significant. In the winter of 2023, when the market was in extreme turmoil, prices in the fixed length deals to Italy were about 60 euros higher than domestic prices."

Customers Come First

In 2022, Iisveden Metsä had customers in 25 countries. There are about a hundred regular buyers. The Alpine regions and Japan are the main buyers; all other sales revolve around them.

"In Europe, the products go to visually appealing locations, interiors, and cladding. In Japan, sawn timber is sold for traditional wooden house components. Almost nothing goes into laminated products nowadays."

The advantage of Iisveden Metsä's products lies in their visual appearance. Small healthy knots and suitably slow-grown wood look good. Austrians and Italians buy from Iisveden to get premium raw material for premium products. It's a matter of survival for the sawmill.

The basic unit of sawn timber export in the European market is a trailer load of 50-60 cubic meters, while in the Japanese market, it's a 50 cubic meter shipping container. Customers are small, and they usually take one load at a time. About a hundred customers continuously buy something.

Metsäntuottajat Oy has been an extremely big help to Iisveden Metsä in sawn timber sales. It's an essential partner that provides market information and understanding on a broader scale. Iisveden Metsä is the only one of Metsäntuottajien's original shareholder sawmills still in operation. The main owner of the sales company is Kuhmo Oy.

Investments Paid Off

During Tommy Lindström's tenure as CEO, the company has invested over 25 million euros. The projects have often been eventful. When installing something new, everything is usually clear until it's time to start working. Problems arise at the latest when a new machine or plant should be put into operation. This often happens, even though tried and tested technology has been sought.

"Everything has sooner or later started working more or less as agreed. In practice, it always requires some tweaking. For example, a few years ago, there was a green grading line investment of over 5 million, and it was tried and tested technology. In the last couple of weeks, changes have been made again to get 10 percent more product through."

The sawing machine is another good example. In the hew-saw installed in 2009, the feed speed was then 75 meters per minute, and now it goes up to 120 meters. Additionally, more sideboards are obtained now.

"Internal development work is crucial. Fortunately, we have people who are interested in whether the whole thing could work better and what could be done for it. That's a significant thing. Surprisingly much more can be done than originally assumed when our people have the willingness to focus on things. Development is continuous."

Success Factors

Tommy Lindström defines good raw material quality and personnel as the key factors for Iisveden Metsä's success, as they work throughout the entire production chain from forest to market.

"It basically boils down to raw materials and people. When these are in good shape, we should be able to succeed. We make a good product and find the right customers who want to buy more from us."

For the company's competitiveness, it has been crucial to have the ability to invest. Decisions have been made during the previous CEOs' tenure that now show up, among other things, in the company's equity ratio. This way, they remain credible to financiers.

"Continuous improvement is the most important factor. The basic idea of the sawmill hasn't changed, but it always requires more technology to keep up with development."

In his own role, Tommy Lindström considers sales management and coordination essential. On the production side, time is spent considering what the next target for development should be.

"The company's team is very self-directed. Ideas come from the sawmill side, and I try to push them forward."

There's no shortage of motivation for the CEO.

"I feel like I'm doing meaningful work. The company is amazing, and it has a unique history. We have great people working here, and we make a great product. Continuous development motivates, and the fact that no one is breathing down your neck and telling you what to do."

Matti Virtanen said when Tommy started that being the CEO of Iisveden Metsä is the best job in the industry. You get to act like an entrepreneur but without the personal risks of being one.

"Lack of motivation hasn't been an issue, at least. I haven't figured out what else I'd like to do. Every day is different, and there's always something new. The colleagues are great, and the atmosphere is good. A lot of work has been done in recent years to renew the team."

Future Prospects

In recent years, Iisveden Metsä has grown significantly in terms of personnel, turnover, and production volumes. These are positive things, but they also have a downside. Nowadays, the management of the company spends more time on everything that doesn't develop the company, such as reporting to various external parties.

There have also been significant changes in the role of Metsäntuottajat recently. For example, all invoicing was transferred from the sales company to the sawmill in 2011. It went smoothly at the time, but the rapid growth in production volumes and sales in recent years wasn't really absorbed by the system. According to Tommy Lindström, people on this side have had to stretch a lot in recent times.

Regarding the future, the CEO sees plenty of question marks, but new opportunities are constantly opening up as well. Changes are happening in the sawn timber market, as Russia and Belarus are currently absent from the market. Additionally, due to insect damage in Central Europe, the demand for Finnish high-quality sawn timber may strengthen.

"There is so much pressure regarding the availability of raw materials that we won't be increasing current production levels. The availability and price of logs are becoming such significant uncertainties," says Tommy Lindström.

"We need to focus on what we already know how to do. Everything should be done more efficiently and with higher quality. The goal is to ensure the supply of raw materials for the current production volume but to use the raw material even more precisely."

In addition to sawing, Iisveden is seeking opportunities for further processing, preferably something that others don't do. The new production should be related to the sawmill's basic concept. Antennas are being tuned particularly sensitively to everything that the green transition may bring.

Demands for increasing biodiversity are setting new goals for forest conservation.

"With climate change, forest management will likely need to shift even more towards mixed forests. It's feared that most of the required changes will reduce the availability of high-quality spruce logs."

Competition between industry companies is also intensifying. More capacity is being built for sawmills across the country, which brings challenges to the market. The right decisions need to be made about how to respond to this.

According to Tommy Lindström, Iisveden Metsä stays best in line with development by improving production efficiency and increasing automation.

"We need to continue working with forest owners, telling them that we are local, we do good work, and we produce sustainable quality products for international markets. Flexibility is needed to stay ahead of the changes. Changes happen so fast nowadays. Previously, deals could be made for several months ahead; nowadays, situations can change in a couple of weeks."

Tommy Lindström and his family have enjoyed life in Savo and their current hometown of Kuopio. There's been a joke on the sawmill line that the CEO is more Savonian than the native Inner Savonian people working there.

The Economic Engine of Inner Savonia

according to Olli Tiainen, CEO of the development company SavoGrow Ltd, Iisveden Metsä has significant importance for the entire economic region. He has been serving on the sawmill's board since 1995.

"Iisveden Metsä is of great significance to forest owners. A local operator inevitably means that the average price of timber rises. Competition is tougher, and the price of timber remains more stable even during seasonal fluctuations," says Tiainen.

"The sawmill is also a significant employer, and a local industrial company requires many other jobs in forestry, transportation, and maintenance."

However, according to Olli Tiainen, the company still has clear development needs.

"I see it as necessary to somehow increase the level of processing. The production volume is so significant that if there are problems with raw material availability for some reason, a plant that produces only sawn timber will face difficulties. On the other hand, if we consider that the company should grow in some way, simply increasing capacity is not the solution."

Currently, there are dark clouds hanging over the forestry sector, and pressures to restrict timber use are increasing. In Iisvesi, alternatives for further processing have long been sought.

"I don't believe that Iisveden Metsä can survive independently by just sawing lumber. A good aspect for the sawmill is that the bioeconomy is one of today's most important areas of development. This facilitates the search for new opportunities. From the perspective of the environment and climate goals, wood products are in an industry where there are still opportunities."

When Olli Tiainen started on the board of Iisveden Metsä, his knowledge of the sawmill industry was limited, although he was familiar with forests from earlier. In the mid-1990s, the company had just completed modernization investments by Matti Virtanen. The sawmill had been updated with state-of-the-art technology at that time.

"These years coincide with two significant investment phases. When Matti became CEO, the technology was completely overhauled, and Tommy Lindström had to focus more on sales and marketing. For the company, it has been good to have CEOs whose work was oriented differently."

Money was tight in the company in the late 1990s after major investments had just been made. In addition, there had been a takeover bid, and as a result, much of the free own capital had been eaten up.

"At the beginning, what caught my attention the most was how thin the office organization was, considering it in relation to the sawmill's total staff and turnover. The CEO almost single-handedly managed the entire company, and that's still the case today."

FLT was significant

The most significant thing during his tenure on the board, according to Olli Tiainen, was the cooperation with Finland Laminated Timber (FLT). The laminated timber factory was established around the same time he began his career at Iisveden Metsä.

"It's hard to say which direction we would have gone if we hadn't gotten the laminated timber factory as a major customer on the neighboring plot. We sold them sawn timber in their special dimensions, which made logistics and marketing costs low. After all the twists and turns, it was also significant that when divesting the minority stake, a good return was obtained from a small investment. That money was much needed for the next investment phase when the sawmill was being renovated."

Iisveden Metsä's annual production volumes have increased by about a third in a short time. Fortunately for the company, during the all-time lumber boom, the staff also believed that every effort should be made to maximize production. Production records were the result of many factors.

"The strong growth has come somewhat easier than one might imagine. The starting point for investments has not necessarily been to increase capacity, but more about removing bottlenecks. Alongside that, there has been a significant increase in production."

Olli Tiainen knows that there are constantly necessary investment needs at the sawmill. As costs rise, the opportunities for investment are essential in adding value to the products.

"You don't have to do anything miraculous; you just need to find some new features that have demand in the market. It could be specialty drying or specialty dimensions. Hopefully, in this bioeconomy frenzy, some further processing ideas will emerge."

According to Olli Tiainen, the changed situation of Metsäntuottajat may in the long run weaken the company's ability to operate in the market.

"When I started on the board, cooperation with Metsäntuottajat was quite close, and it was undoubtedly beneficial for all parties. As the number of shareholder sawmills belonging to Metsäntuottajat has decreased, the significance of the company has changed for Iisveden Metsä. Fortunately, Tommy Lindström has been able to replace the sales contribution of Metsäntuottajat with his own effort."

Space for Growth in the Future

Olli Tiainen has a clear answer to how Iisveden Metsä has succeeded.

"It's probably flexibility and the ability to adapt to customer needs. Another important aspect is the stability of the workforce. Labor shortages have been talked about for a long time, but nowadays, it is becoming a reality even in Inner Savonia. In Iisvesi, it has never been a problem. Looking at the length of careers and the small turnover of staff, these things must be in order."

Currently, the availability of domestic labor is deteriorating so drastically that Olli Tiainen believes the attitude towards foreign labor must change.

"We don't have proper readiness for a large influx of foreign labor into companies. Something needs to be done so that we have the ability to accept labor from abroad."

"There is currently a labor shortage in almost all industrial companies in Inner Savonia. So far, we've managed because the workers come from our own area. Now we have to compete for workers over a wider area. Southern growth centers are attracting young people so strongly that it's difficult."

According to Olli Tiainen, the future threats to the wood processing industry are most clearly found domestically.

"There is powerful influence to protect forests more and restrict their use. It's a political threat, and to some extent, it will probably happen."

TIMELINE OF 100 YEARS

1920s

1923

Meeting of forest owners at the Suonenjoki Youth Association's house. Subscription of company shares is started.

Väinö Räisänen acquires a plot of land for the company to be established on the shore of Jauholahti in Iisvesi.

Founding general meeting of Iisveden Metsä Oy in September at the Suonenjoki Cooperative Dairy.

Lauri Vilpponen is elected as managing director.

Wood procurement is initiated.

1924

Iisveden Metsä Oy is registered in March.

Planning and construction of its own sawmill. Sawing starts at the end of November- early December.

1925

The share capital is increased to one million marks (approximately 386,000 euros at 2023 prices).

The company acquires its own tugboat from Sweden, named "Metsä."

A horse is acquired for the company, with which the site superintendent travels around the worksites paying wages and supervising the progress of work.

1926

A new rapid frame and crane for lifting logs onto land are acquired.

Lauri Vilpponen, after falling ill, has to step down from the position of managing director.

A machine and repair master is hired for the company.

First dividend of 7 percent on share capital.

1927

Aleksanteri Hiltunen from Kotka is elected as managing director.

Office building constructed based on the plan of master builder Otto Suihkonen.

Decision to shorten the payment period for timber sales by one year. The timber sales for the logging year 1926/27 will therefore be paid in July-August 1928.

Due to a good market situation, production volume rises to 32,396 cubic meters.

1928

A five-cutter planer is acquired, and facilities are built for it.

1929

The operating area expands as Pielaveden Metsäosuuskunta ceases its operations. Members of the cooperative become shareholders in Iisveden Metsä, and the cooperative's "fleet" is bought by Iisveden.

Due to the deteriorating economic situation, no dividends are paid for the years 1928 and 1929.

1930s

1930

Salaries of officials are reduced due to the weak market situation.

1931

In addition to firewood and sawn timber, fence posts and poles are taken for sale. Due to poor demand, the price of firewood has to be significantly reduced.

Managing director and board salaries are reduced by 10 percent.

Sawn timber sells poorly, sawing reduces to 16,534 cubic meters.

1932

Members of the Supervisory Board and the Board are each personally obliged to lend money to the company.

Bill financing is also needed to cover temporary cash needs.

1933

The Central Loan Fund of Cooperative Banks demands collateral for its loans. Each member of the management is liable for 100,000 marks (almost 47,000 euros at 2023 prices).

1934

The financial situation remains tight, but the frame saw is decided to be renewed to reduce costs. A new frame saw and edger are purchased from Karhula.

Saw production increases to 33,260 cubic meters.

1935

The decision is made to build the first kiln for the sawmill. At the same time, the power plant has to be renewed.

1936

Metsäkeskus Oy has payment difficulties due to delays in loading ships.

At the Metsähallitus timber auction, prices rise so high that the company fails to buy anything.

1937

A new 20-inch frame is acquired for the sawmill from Karhula, and the equipment in the kiln is renewed.

1938

Loans are reorganized to eliminate all personal guarantees.

The sawmill is shut down for five weeks in the autumn due to insufficient raw material.

Production volume: 20,094 cubic meters.

1939

Field army is called for extra exercises in Kannas on October 11, the number of workers decreases.

Lotta Svärd's local branches in the sawmill's area are given aid to provide food for men going on extra exercises.

1940s

1940

It is decided to acquire a machine gun for the company for air defense. Men who have received training in using the weapon are requested from the Civil Guard District.

Wood chip production for vehicle wood gasifiers from alder trees begins.

Production falls to the lowest level in history, 8900 cubic meters.

1941

It is decided to purchase a Ford truck for the sawmill, as all local vehicles are heading to Petsamo.

Families of reservists called up for military service are assisted.

Due to the shortage of men, the sawmill operates with only one frame saw.

1942

Tugboats and barges are rented to the Railway Timber Office.

Lingonberry crates are made for the Product Agency's use.

The company is sued, and the managing director and the company have to pay fines for overpricing wood.

Cranes are acquired for the sawmill's lumber yard.

1943

Tugboats and barges are rented out to other companies for transporting logs as well as for the Railway Timber Office.

Sawing continues in a single shift.

1944

Retrospective compensation is paid to the workers due to low wages. Forestry workers receive an extra month's salary.

Land is purchased for the construction of staff housing.

1945

Housing is built for workers to alleviate the shortage in the area.

Company representatives attend a negotiation meeting of Metsäkeskus and Metsäliitto in Helsinki.

1946

Arvo Tanhuanpää is elected as managing director.

The company assists in establishing a nursery school in Iisvesi.

1947

The withdrawal from the Metsäkeskus progresses as the shares of Iisveden Metsä held by Metsäkeskus are exchanged for shares held by the sawmill in Metsäkeskus.

1948

The company's shares end up in the possession of Metsäliitto. However, Metsäliitto is not accepted as a shareholder, as it is seen as a competitor.

1949

The company disengages from the financing provided by the Metsäkeskus for timber sales.

Production slowly recovers. This year, 19,263 cubic meters are sawn.

1950s

1950

A new planer is acquired for the company, and the frames are renewed.

Metsäntuottajain Teollisuus Oy is established as a sales company for sawn timber. Along with Iisveden Metsä Oy, Ruukki Oy, Lohjanvesistön Metsä Oy, Ukkola Oy, and Tohmajärven Tehdasosuuskunta join as shareholders.

1951

The sawmill operates in two shifts as there seems to be enough timber.

The Korean market boom cannot be fully exploited. Sawing volume only reaches 24,832 cubic meters.

1952

The sawmill is shut down due to poor market conditions.

The sawmill is renovated by acquiring more frames. At the same time, leveling and loading tables are installed.

1953

After the Aulanko timber auction, it is noted that the price of logs does not fully correspond to the price of sawn timber.

Sawing volume drops to 19,515 cubic meters.

1954

A scholarship fund of Iisveden Metsä is established at the Suonenjoki Cooperative School.

Timber is provided to Suonenjoen Vasama sports club for the construction of a sports hall.

1955

The sawmill is shut down for a week due to a civil servant strike.

Iisveden Metsä becomes a shareholder in Haukivuoren Saha Oy with a 25.25% stake. The other owners are Enso Gutzeit Oy and Ukkola Oy.

1956

A general strike disrupts the sawmill's operations. Despite the strike, forestry work progresses well, but the sawmill has to be shut down.

Financial situation becomes difficult due to the prolonged strike, as products cannot be sold.

Banks tighten their grip. The Savings Bank and KOP demand significant repayments on loans.

Sawing is stopped in September due to the lumber yard being too full.

The remaining shares of Metsäkeskus held by the company are sold to Metsäliitto.

1957

The sawmill operates only in one shift during winter.

The markka is devalued, and benefits are gained in exports.

There is a good supply of logs; the situation is completely opposite compared to the previous year.

1958

A debarking machine for logs is put into operation.

The English agent is replaced because the previous one has become lazy. The new agent, Pharaoh Kane, has been active in selling Haukivuori's products.

The planing mill is renovated, and the number of drying kilns is increased.

The price of sawn timber decreases without any apparent reason.

1959

The managing director or forestry manager is authorized to sign logging contracts. Until now, contracts have been approved by the board of directors.

Sawn timber production amounts to 25,247 cubic meters.

1960s

1960

Enso Gutzeit withdraws from the ownership of Haukivuoren Saha Oy, leaving Iisveden Metsä with a 50% stake, Ukkola Oy with 25.5%, and Metsäntuottajat Oy with 24.5%.

The sawmill is shifted to one shift in autumn due to the lumber yard being full.

1961

The company's telephone exchange is converted into an automatic exchange.

Efforts begin to establish Savon Sellu in Kuopio. Iisveden Metsä subscribes to some shares.

1962

The share capital is increased by free allotment to the upper limit defined in the articles of association, to 14.4 million marks.

1963

Production is reduced by 10% from the previous year's levels.

A Dutch customer offers a prepayment with a total of 6.5% interest. The offer is accepted because the cost of money is much cheaper than domestic bank credit.

1964

The price of the logs to be purchased is found to be too high. However, it is decided to buy a million cubic feet of logs in the hope that the market situation will improve.

1965

Haukivuoren Saha becomes fully owned by Iisveden Metsä. Purchasing of logs is stopped in Haukivuori, and the sale of plots begins.

The sawmill is decided to operate only in one shift due to uncertain availability of logs.

1965 is already the third consecutive year of losses.

1966

"Never before has there been such a weak supply of raw timber," it is noted in the board of directors.

From the beginning of June, a 40-hour workweek law comes into force.

1967

The markka is devalued, but before devaluation, a large timber sale is made with Metsähallitus.

1968

Sawn timber trade starts to improve as the exchange rate is corrected. Sawing volume is increased by 18% compared to the previous year.

Forestry manager H.Tapio Sivonen is appointed as the managing director of Iisveden Metsä, as the previous director requested resignation due to illness at the end of the year.

1969

Timber trade is going well, but heavy snow hinders logging. Timber export trade develops well, but difficult ice conditions congest shipping.

At the end of the year, sawing shifts to metric measurements and dimensions. This requires changes to the leveling table and the edger.

The horse owned by the company is sold as it is deemed unnecessary.

1970s

1970

Changes are made to the articles of association, with the main issue being the increase in share capital.

Due to good export conditions, the sawmill operates in two shifts for some time, and sawing volume increases to 31,573 cubic meters.

Nearly a month-long port strike causes significant financial losses to the company.

The company's owned fields are packaged.

The company sells the majority of its properties in Haukivuori to the municipality of Haukivuori.

1971

The company's share capital is increased by a free allotment.

A log sorting plant and a lumber length sorting plant are built.

The Suonenjoki Forestry Association plans a timber sales strike because it is suspected that local sawmills are colluding on prices.

51% of lumber production is pine. The main export countries are Algeria, Great Britain, the Netherlands, and Germany.

1972

Wood chips are started to be supplied to the Sivutuote Corporation in Lievestuore, but payments are delayed from the beginning.

A storm fells a lot of trees in Suonenjoki. Logs are purchased especially from those forest owners with whom trade has already been made.

1973

Sawing continues in two shifts because raw material is readily available. Due to a shortage of labor, one shift has to be discontinued before summer.

Workers are provided with safety helmets and ear protectors required by the new legislation.

The high business cycle affects in many ways. The entire year's production has been sold well in advance. By the end of the year, log prices have risen by over 100% from the previous year.

By the end of the year, the effects of the energy crisis begin to be felt. Trading comes to a halt.

The sawing and delivery volumes for the whole year reach record levels, sawing 35,321 cubic meters, sales 42,365 cubic meters.

1974

At the time of the 50th anniversary, it is stated that the company has fulfilled the mission set for it by its founders. The company has over 500 shareholders, the majority of whom are forest owners.

The company employs 140 workers and office staff. There are an average of 130 people working in the forestry department.

The oil crisis halts timber trade and exports. Labor unrest is present in the labor market, including sit-down strikes in Iisvesi.

The Finnish Sawmill Owners' Association urges its members to reduce production due to oversupply.

It is decided to support a reliable entrepreneur in the acquisition of a harvesting machine.

1975

15 people are laid off from the sawmill due to the transition to single-shift sawing.

Wood chip deliveries are transferred to Serlachius's Mänttä factories on behalf of Sivutuote Corporation.

A property on Asemakatu 11 is acquired for the use of the forestry department.

1976

Lumber sales are going well, but log trade is not.

A ripsaw is built.

A commitment is made to the Finnish Sawmill Owners' Association to reduce production.

Due to poor sales, there are visible financial difficulties, and therefore a layoff warning is given to the entire staff.

1977

The company conducts a share issue, but subscriptions progress poorly. By the end of the year, only 40,500 marks (approximately 31,000 euros in 2023 prices) worth of paid-up shares have been subscribed.

The Swedish crown and the Finnish mark are devalued. Sweden devalues ​​more, weakening the competitiveness of Finnish companies.

1978

Timber trade goes well when nationwide price recommendations come into force. These are the first to cover all major timber product categories.

1979

Minor changes are made to the articles of association due to the new Companies Act. Share capital is increased by a bonus issue exceeding 1 million marks.

The sawmill operates in two shifts during the spring season when the market situation is favorable. Production volume is 37,200 cubic meters.

1980s

1980

Sawing volume increases significantly due to good economic conditions. The sawmill employs one hundred workers and eight in the office. In the forestry department, there are eighty workers in the winter season and seven throughout the year.

A new sawing record is set at 45,500 cubic meters. Towards the end of the year, exports become difficult, and prices decline.

1981

Competition for wood in the neighboring areas tightens when Ilkka Kylävainio establishes Keiteleen Teollisuussaha Osakeyhtiö.

Heavy snowfall complicates timber harvesting and transportation.

Lumber export prices drop sharply for spruce and slightly less for pine.

The market situation tightens to the extent that buyers leave goods uncollected from ports.

1982

The lumber market slump continues. Due to the weak market situation, workers are laid off at the end of the year.

Despite the price decrease, the price recommendation agreements for logs do not correspond to the deteriorated lumber prices. Concerns arise about the availability of pine logs.

The number of workers in logging decreases, with 45 men working part-time in harvesting operations.

Construction of a new planing mill begins.

1983

Industry launches the "Finland Lives from the Forest" campaign.

Members of the Finnish Forest Industries Federation are obliged to restrict wood use. Iisveden Metsä commits to a purchase cap of 94,000 cubic meters.

1984

According to the Forest Research Institute's data, the price of wood in Suonenjoki has been 4-10 marks per cubic meter higher than the average in Northern Savonia.

The lumber market has improved, especially for pine products. Price development for spruce lumber is slower.

Purchases emphasize pine stands, and the proportion of pine logs is increased to 59% of procurement.

1985

Winter is the harshest of the century, slowing down sawing.

The Forest 2000 program is completed. It provides material for speeches and goals for practical work.

In the autumn, sawing of pine becomes unprofitable due to price declines.

The Manta storm fells a lot of trees at the end of October, greatly increasing the supply of large timber.

1986

A three-year price recommendation is made for wood, where prices are derived from world market prices for products.

40% of the wood is still transported by water to the sawmill.

Investments are refrained from due to the sawmill industry crisis. High interest rates also hinder investments, reaching up to 20%.

Jaakko Pöyry Oy provides recommendations for future development to Iisveden Metsä. The consulting company advises the sawmill to develop its operations to be more customer-oriented.

1987

Requirements for the measurement and quality of sawlogs are tightened, causing confusion in timber trade.

A fire in the drying kiln destroys two drying chambers. Insurance covers the damage, and the drying kiln is rebuilt.

A small birch saw is acquired from the bankruptcy estate of Puutavaraliike Sivonen.

The last properties in Haukivuori and the Tapio steam tugboat are sold.

1988

The economic situation is tight. The supervisory board authorizes the management board to drastically adapt operations and sell unnecessary fixed assets in production.

KOP suggests that the company's loans be paid off in excess of 9 million marks. The bank also demands plans for making the company profitable.

Properties in Iisvesi village, along the Iisvesi shore, and in Pielavesi, as well as a gravel pit in Iisvesi, are sold.

Young investors from Suonenjoki begin, with the assistance of local banks, to acquire shares in the company.

1989

Matti Virtanen appointed as CEO from January 1, 1989.

Laitinen, Siikavirta & Co investment bank declares ownership of 40% of the company's share capital. The actual figure is approximately 32.5%.

The company's management believes that share ownership should not be overly concentrated, and the shares acquired by the investment bank are redeemed.

The company's main financier, Kansallis Osake Pankki, suggests that the amount of loans should be reduced. Finance negotiations are started with Suomen Yhdyspankki, and a solution to the situation is reached.

1990s

1990

Both pine and spruce are still being sawn. The goal is to increase the share of spruce to 60%.

The share subscription yields approximately 618,000 marks.

Mechanization of timber harvesting progresses so that 40% of the wood is harvested with harvesters.

1991

The MTK declares a timber sales strike, lasting until November. Stumpage prices decrease by an average of 25% per year and by even more over the next two years.

The Finnish mark is devalued in November. The company has 5.3 million marks in foreign currency loans, equivalent to about 2.5 months' receivables.

1992

The entry into force of the Competition Act ends national price agreements for timber.

1993

The transition phase from area-based taxation to sales income taxation begins in forestry taxation. This increases the supply of wood from those farms that remained within the area-based taxation for a 13-year transition period.

A hew-saw is installed in the winter. Initially, it is used alongside the frame saw.

No dividends for the year 1992 are distributed exceptionally.

As a result of the industrial insurance merger with Sampo, the company receives 3,185 Sampo shares.

1995

The construction planning of the combi plant is initiated.

The company joins a project to build a glued timber factory in Iisvesi, mainly owned by Japanese investors. The investment's own share is financed by selling the factory's plot to the city of Suonenjoki.

1996

A combi plant is built, with an investment cost of approximately 11 million marks.

Oy Finland Laminated Timber is established.

1997

An open house day is organized in April for the forest owners in the area.

1998

A new log sorting facility is built, with an estimated cost of 5.8 million marks.

Antti Väyrynen and Masafumi Morikawa acquire a majority stake in FLT.

1999

Production exceeds 50,000 cubic meters for the first time.

2000s

2000

Annual production exceeds 60,000 cubic meters.

2001

The result deteriorates significantly due to the sharply increased log prices and at the same time decreased lumber prices. A loss of over 700,000 marks is recorded in the financial statements for the year.

2003

A new production record of 86,900 cubic meters. A significant portion of the production is sold to FLT as green material.

2005

Due to the long strike in the paper industry, sawing has to be reduced even before the summer shutdown.

The end of the forest area taxation brings plenty of wood onto the market.

2006

Tommy Lindström is elected as the company's CEO.

FLT starts sourcing raw materials from the Iisalmi sawmill and significantly reduces its purchases from Iisveden Metsä.

Due to the scarcity of spruce logs, starting pine sawing is considered. In the spring, the log inventory corresponds to about three weeks of production.

2007

A new debarking line is acquired, and a preliminary agreement is made for the acquisition of a new sawmill line, despite the collapse of the lumber market.

2008

Iisveden Metsä divests its ownership stake in Oy Finland Laminated Timber. The money is used to repay loans and purchase a new sawing machine.

In the autumn, the financial crisis hits, raising the cost of all financing.

2009

The renovated hew saw line is put into operation in April-May.

Sawing is still unprofitable, although demand strengthens in the summer.

2010s

2010

The company buys back the shares held by the city of Suonenjoki (9,036 shares).

2011

A camera grading system is acquired for the grading plant.

2012

The articles of association are updated to comply with the requirements of the new Companies Act.

2013

China becomes a significant export destination.

2014

A new channel kiln is built.

2015

Iisveden Metsä resigns from membership in the Finnish Forest Industries Federation and joins the Finnish Sawmill Association.

2016

Production exceeds 100,000 cubic meters.

2017

Production capacity is fully utilized as sawing volume rises to 115,000 cubic meters.

2018

A new 8 megawatt thermal power plant is completed.

2019

A new green grading line is launched, the company's largest investment in history.

2020s

2020

The coronavirus pandemic increases costs, but production is still maintained at a good level.

2021

The latest investments are put into operation "just in time." The result is a new production record of over 141,000 cubic meters and the best result ever.

2022

Due to the war in Ukraine, there is plenty of room in the lumber market, and the year is still financially good.

2023

Lumber demand collapses. Log prices remain high, resulting in a financially weak year.