Finnish Labor Woes Threaten Paper Supply

The labor action that has shut paper mills in Finland since May 18, affecting such suppliers as Stora Enso and UPM-Kymmene Group, shows no signs of abating. According to the Associated Press, negotiations resumed Tuesday the Finnish Paperworkers’ Union and the Finnish Forest Industries Federation (FFIF) rejected two proposals from the national conciliator on Friday.

The crux of the disagreement between the two parties is the use of outside labor at the mills, or outsourcing, to which union members are opposed. Specifically, the union is opposed to plans to transfer maintenance, security, and cleaning work to nonunion contractors. The latest deadline for the two parties to reach an agreement June 23 at 3 p.m. Finnish time, but few expect a resolution at that time..

The dispute, which began in November when the forest industry turned down a collective bargaining pact between employers’ organizations and unions, has tightened the world’s supply of coated groundwood sheets. Finland accounts for nearly one-quarter of the combined North American and European capacity for coated groundwood, including coated #4 and #5 grades, and 14% of coated freesheet, such as coated #1, #2, and #3 grades, according to Bedford, MA-based forest industry research group RISI.

According to Viewpoint, a newsletter published by RISI, if the strike continues into July or later, there is a good chance that prices on coated groundwood will rise again, with some end users, catalogers included, finding it “difficult to get enough paper to run their businesses as usual.”

For more on paper pricing and availability, see the Quarterly Paper Update in the upcoming July issue of MULTICHANNEL MERCHANT.

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