Situation in the Forestry Machine Building is Holding the Industry Back

12 february 2016

Russia has got the world’s largest forests and biggest lumber reserves and yet Russia’s share in the global output of timber and lumber is about 5%. And when it comes to higher value-added products like paper and carton, Russia amounts for just 2% of the global output, the Analytical Center's experts concluded at a Round Table titled Russian Forest Sector – Achievements and Prospects.

The Deputy Head of the Analytical Center Gleb Pokatovich reminded those present that 2008 saw the approval of the Strategy for the Development of the Russian Forest Sector through 2020, which called for the development of timber, wood processing and pulp-and-paper industries along with forestry management. In 2015, Russia’s pulp-and-paper industry was developing under the pessimistic scenario, the expert reported. “Timber export duties is another negative factor,” Mr. Pokatovich said. “As a result of their introduction, the industry lost several billions of dollars, primarily in the Chinese market.” The expert believes, an assessment should be made of the degree to which these losses were compensated for by the increase in the production and exports of processed wood products.

Pavel Popov, the Head of the Forest Sector Department of the Ministry of Industry and Trade of the Russian Federation, talked about a draft road map that will form the basis of the Strategy for the Development of the Russian Forest Sector through 2030. The expert mentioned 6 key groups of measures, including measures to improve the efficiency of state management in the forest sector, and some measures to improve the use and rehabilitation of forests and to develop the infrastructure. The expert also named measures that could expand wood processing, develop the domestic market of timber-and-paper consumption and stimulate cluster development in the sector.

“The industry is being held back by interest rates and lack of credit resources,” believes Vladimir Kondratyuk, the CEO of the Federal State Unitary Company ‘State Research Center for the Forest Industry’. According to him, the projects being implemented now cannot be completed because the industry simply cannot afford the current interest rates. The expert believes underdeveloped transport infrastructure and lack of roads to be internal negative factors. “In 2015, we really felt the lack of domestic equipment manufacturing,” Mr. Kondratyuk said. “While before we could buy foreign equipment, now we cannot afford it because the prices have gone up drastically.” If this issue is not sorted out in the 2-3 years to come, the entire timber harvesting will come to a standstill, the expert is convinced.

During the Round tTble, experts also noted that the sector lacks modern technologies while financing of R&D has effectively stopped. In addition, there is very little information about the state of the country’s forests, whereas official statistics do not reflect deforestation.


List of participants