Latvia saw an 8.2% growth in its GDP in the first quarter of 2001 and the level of unemployment remained at 7.8%.
There was a small increase in housebuilding and a 35% increase in turnover in the furniture industry in the first half, leading to cautious optimism for an eventual increase of domestic timber consumption. Trends that started last year in the production of softwood sawn timber are developing with the establishment of vertically integrated groups of enterprises, from forest harvesting to export.
Latvia’s timber industry employs around 34,000 people, including those in the areas of service and logistics.
In 2000 there were reported to be five sawmills in the country with capacity of 70,000-120,000m³ , and approximately 40 companies with a production potential of 10,000-45,000m³ per year. Around 1,500 businesses in the timber sector – mainly small and medium-sized – have an annual output of less than 10,000m³. Competition in production and the raw timber materials market has reduced the number of companies in recent years.
Intense timber processing
In 1999, small businesses began to get together to specialise in more intense timber processing. Larger companies put their emphasis on implementing advanced technologies in the timber industry and investigating developing vertically integrated companies.
This process, says Harijs Jordans, an executive director of the Latvian Timber Exporters’ Association, will result in fewer companies but will facilitate competitive capacity in export markets.
There was a small increase in the turnover of sawn timber production in the first half of 2001 compared with last year. This led to Latvian timber processors increasing output of products with added value and to a growth in domestic consumption.
Compared with 2000, exports of higher value-added products have risen. Domestic consumption of timber is increasing and could reach 850,000m3 of sawn product by the end of the year. Sawn timber exports could decrease by 7-8% this year.
Unfavourable outlook
In the first half of 2001, export volume indicators for Latvian softwood sawn timber exporters looked unfavourable – the volume of softwood exports decreased by 11.1% compared with the same period in 2000. In terms of value, says Mr Jordans, the decrease is 11.8%.
He believes that the basic trends this year will see:
Certification
In order to promote the development of a sustainable forest management in Latvia, foresters and timber producers, in collaboration with NGOs, are working hard to introduce Forest Stewardship Council (FSC) and Pan European Forest Certification (PEFC) systems into the industry.
The SSC Latvian State Forest will have part of the administered forest – around 800,000ha – certified to to FSC standards this year, resulting in an annual output of two million m³ of certified timber. At present, 62,000ha of forests have been certified in Latvia and eight companies have chain of custody certification.
The owners of private forest properties who have received accreditation to the PEFC system are also busy. Effective procedures for forest certification have been started and the first 2,500ha could be certified this year.
