According to preliminary estimates, the results of the past year were comparatively good for Russia’s timber and forest products industries. Deputy prime minister Ilya Klebanov reported that production growth in the sector overall is expected to be about 2% over the year.
In some regions, the rate of growth is even more impressive: 27% in Tumen in Siberia, and 7.5% in Komi republic. And the future also looks bright. According to official statistics, by 2004 the annual rate of growth is forecast to reach 17.5% , putting timber and forest products ahead of most other areas of Russian industry.
According to deputy minister of natural resources, chief of state forest service of Russia Yury Kukuyev, about 140 million m³ of industrial wood was harvested last year (6% more than in 2000). And the total export value of timber and paper was expected to reach US$4.5bn. Of this, around US$1bn was accounted for by round timber, adding up to volume exports of 40 million tons.
Despite the production and export growth, however, it is clear there is still scope for major improvement in the forest products sector if recent output increases are to be sustained in the longer-term. It is generally accepted that there is a need for restructuring of management of timber companies and the timber industry as a whole.
Investment in more modern and productive technology is also urgently required. Antiquated equipment remains one of the most serious brakes on the development of the industry, and, according to experts, it will reach a critical point during 2003-2005 unless urgent measures are taken.
It is sawmilling and woodworking equipment, in particular, that needs modernising. And there is growing realisation that, as not all companies can afford to import the latest equipment, Russia’s own machine-tool industry also needs to expand and develop.
The government also clearly has ambitions to add more value to the country’s timber resource. Currently just 30% of the wood volume harvested is converted into finished manufactured products in Russia. The aim of the government’s ‘National Wood Policy’ is to boost that to between 80% and 90% by 2010, adding around US$10bn to the value of the country’s timber and timber products exports each year.
Another encouraging sign for the Russian industry is continuing inward investment. Currently, for instance, the republic of Karelia is negotiating with Finnish partners on the construction of a new sawmill that would be among the most modern in Europe.
With the aid of US$60m from the World Bank, the government has also launched pilot projects in Krasnoyarsk, Khabarovsk and Leningrad to increase the efficiency of forest management. The aim is to ‘ensure the full use of every cubic metre of log harvested and full reforestation’.
The government is also planning to improve infrastructure and logging capacity to increase the annual timber harvest (which some estimate could currently be as low as just 20% to 22% of its potential).
The development programme also includes boosting standing wood by 5-6% and improving general management and policing of Russia’s forests to cut down on the level of illegal logging.
