Head of Roslesinforg Pavel Chashchin on signs of recovery in the forest industry in 2023 and forecast for 2024

Are there signs of recovery in the forest industry in 2023 and the forecast for 2024, Kommersant was told by the director of Roslesinforg Pavel Chachin.

— How do you assess the current situation in the timber industry?

— It cannot be denied that the export-oriented wood processing industry was among the victims after the imposition of sanctions. However, the negative dynamics of sawn timber exports is declining: exports in the first half of the year exceeded 10 million cubic meters. If in the first two months of the year, compared with January-February 2022, the difference in supply volumes was exactly a quarter, then by the middle of the year it had decreased to 16%. Most actively, deliveries increased to Turkey (three times, to 145,000 cubic meters) and to the United Arab Emirates (twice, to 254,000 cubic meters). Among the leading foreign contractors, growth in imports of Russian sawn products was noted in Hong Kong – by 72%, up to 245 thousand cubic meters, Tajikistan – by 27%, up to 242 thousand cubic meters, Iran – by 52%, up to 222 thousand cubic meters and Kyrgyzstan – by 45 %, up to 183 thousand cubic meters. The share of China in exports for the first time exceeded 60%.

Plywood manufacturers need special support. However, now its domestic production is gradually recovering: by about 0.5–1% month on month. At the end of June, the country produced 1.6 million cubic meters of plywood.

— Are there any difficulties with the reorientation of cargo? How can they be eliminated?

– Logistics, of course, could not be preserved, but it was possible to restructure the movement of export cargo. Let’s start with the fact that more than half of the shippers at the moment say that they have no insurmountable difficulties with the reorientation of goods to the East. At the same time, there are still certain difficulties with transportation through the Eastern range. It should be understood that exports are partly hampered by the peculiarities of cargo acceptance by the Chinese side. In addition, the load on the Baikal-Amur Mainline and the Trans-Siberian Railway increases due to the transportation of round timber to processing sites for further export. Containerization of timber cargoes, primarily plywood, lumber and veneer, can become a solution. We see that many have already used this method – in this form, the cargo began to leave 10% more often than before the imposition of sanctions.

For timber exporters operating through the ports of the North-West, the government approved a new support measure – they can cover up to 80% of the cost of transporting products. Basically, we are talking about companies from Karelia and the Arkhangelsk region that send goods to Egypt. The measure will unload the Eastern landfill until its carrying capacity is expanded.

— Is there now competition between the timber and polymer sectors for the packaging market? Can a ban on single-use plastics help timber companies?

— The packaging industry is undergoing active import substitution and greening, all against the backdrop of an ongoing boom in online commerce, which is rapidly increasing demand for packaging. Today, at least 80% of household waste is packaging, and in half of the cases it is made from non-recyclable materials. In March, President Vladimir Putin ordered an increase in the use of single-use paper packaging in order to phase out plastic products. Domestic pulp and paper enterprises responded with active development of production. For example, the production of bags and paper bags in the first half of the year increased by 10%, to about 2.3 million pieces.

— How seriously have investments in the timber industry been affected?

— The situation in the timber industry could not but be influenced by external factors and economic instability. At the same time, investments in the forestry complex last year grew by 17%, to 150 billion rubles. Almost half of all investments fell on the production of paper and paper products. Also, significant investment activity is associated with the repurchase of assets of foreign companies. For example, in August, Mondi again announced the sale of its largest asset, Mondi Syktyvkar LPK.

— What production results do you expect for the year?

— In comparison with the earlier months of the year, we see an increase in production indicators in the context of all the main sub-sectors of the timber industry. Prices have also returned to pre-pandemic levels, demand for raw materials and finished products has increased, this was greatly facilitated by government incentive programs. By the end of 2023, if there is a decline, it is likely to be insignificant. There are strong growth prospects in 2024.

Interviewed by Olga Mordyushenko