TRADE REPORTS
Updated: 8 January 2008

TRADE BETWEEN JAPAN AND FINLAND 1985-2007

Note: Value mill. EURO. (1 EURO approx. 1.45 USD / 164 JPY)

Although Japan had been doing extensive exports to Finland since the mid-1970's (mainly cars and electric goods), Finnish exports to Japan were on a very low level until the mid 1990's. After that the paper export, which had been the only major Finnish product on the market until then, started to grow rapidly and two new product groups, wood and telecommunication, helped to raise Finland's exports to new levels.
Since then, Finnish companies have been improving their positions in Japan, although the Finnish exports to Japan suffered from the Japanese recession in the 1990's. In 1996 the exports amounted to 812 mill. euro, but declined by 15 % in 1997 and by another 16 % in 1998. In 1999 the development turned. Export rose by 12 %. This development continued even stronger in 2000 when the exports rose by 29 % and a further 5 % in 2001. This development continued in 2002 when Finland's export to Japan grew by 15 % and exceeding 1 billion euro for the first time. Since then, the exports have declined, partly at least due to a strenghtening euro. In 2007 however, it seems that the trend will change and Finnish exports to Japan would have a healthy growth of about 25%.

Japan's export to Finland has changed its composition rather dramatically over the years. Cars, consumer electronics and electric machinery, which had dominated the export over decades were surpassed by components for the telecom industry in 1997. By year 2000 they accounted for almost half of Japan's total export to Finland and then almost equaled (840 mill. euro) Finland's total export to Japan (in 2000). Exports of cars, which used to be the main product, had by then decreased to 250 mill. euro.
However, the slump in the telecom industry led to a decrease of electronic component exports from Japan to Finland by 35 % in 2001 and dropped a further 10 % in 2002. After slight declines in 2003 and 2004, the telecom exports grew again in 2005 by 25% resulting in a 7% growth in Japanese exports to Finland.

FINLAND'S EXPORT BY MAIN PRODUCT GROUPS


Paper and paperboard have been the dominant product categories in Finnish exports to Japan over the last 25 years, accounting for almost half of the total Finnish exports in the late 1980. The Finnish paper industry founded sales offices in Japan already in the 1970's.
The other traditional cornerstone of Finnish business in Japan has been machinery, mainly for three segments, paper industry, power plants and mining industry.
Since 1993, sawn and further processed timber has emerged as the third major export item from Finland to Japan and in 1999 the export of timber and other wood products surpassed the level of our paper export, and kept its position since then. In 2002 telecommunication rose to the second most important product category, but has since then decreased. These main export categories are followed, in order of volume, by non-ferrous metals (incl. stainless steel), chemicals, and log houses.
Even though log houses represent only about 2 % of Finland's total export to Japan, this country is the second most important export market (after Germany) for this industry.

Finland's Export to Japan in 2007
Paper and paperboard, wood and manufactures, prefabricated buildings and pulp have accounted for 45-55 % of Finland's export to Japan in the past 10 years. This differs significantly from Finland's overall exports where the forest industry cluster accounts for less than 30 %. But in 2007, the strong rise on exports of mechinery and metals is expected to decreased the share of the forest industry to 33% The share of high-tech exports (telecom and instruments) is still rather modest, accounting for 4% of the total exports, but is expected to increase in the coming years.

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