Files
Abstract
The first Swedish forest owners’ associations were established in the 1910s and 1920s. The
purpose was to promote and improve management of the small scale forests. Since then the
society, the forest sector and the conditions for the small scale forest owners have changed
dramatically. Thus, it is no surprise that also the conditions for the associations themselves have
changed. The purpose of this paper is to describe the development after the 1970s. The
theoretical base is the typical development cooperation and its causes. The annual reports and
other secondary sources are used as data sources. The number of forest owners’ associations
have decreased dramatically and presently is only four. Staff and forestry areas also have
declined sharply. These consolidations can be explained by a wish to achieve increased
efficiency through economies of scale. After the economic crises during the 1970s the number
of members decreased but has since then increased but is still less than before the crises.
However, the members’ forest area didn’t decrease as much as the number of memberships and
it also has increased more rapidly. The average forest area has increased by15 hectares.
Financial growth in the forest owners' associations has increased dramatically during the period
studied. In the 2000s sales increased almost linearly with the exception of 2009 when the next
recession caused by the global financial crisis temporarily reduced associations' turnover.
Although the final results for the associations most years are positive and the losses reported
some years are relatively small, some associations have had significant financial problems. In
the 1970s it became apparent that during economic downturns the relatively low proportion of
equity made them vulnerable. Therefore, they started to build up the equity. Return on equity
has as an average during the 2000s been around 7-8% and some percentage lower if total capital
is used as denominator. The last ten years, the solidity has remained relatively unchanged at
about 50%. The number of association-owned sawmills has continued to decline while
production in the remaining sawmills have increased dramatically. Production in the
associations’ sawmills has doubled since the early 1990's. Of the associations-owned pulp and
paper companies only Södra’s mills remain. One problem for the associations are a risk that the
intent to form larger and more efficient organizations leads to increased “distance” between the
associations and their members. This may mean a risk to lose “anchoring” to the members and
that the officers start to act on their own as regular forest products companies. Another problem
is that the members cannot take advantage of the large value growth that has occurred for the
associations. Moreover, there are a lot of capital tied up in operations that do not really have
any formal ownership.