The forest industry still lacks increased transport subsidies

Timber companies in the north-west of Russia, thanks to adjustments to transport subsidies and support for the export of products from the ports of the North-Western Federal District, began to receive twice as much compensation from the state, but these measures are offset by an increase in rental payments and a change in the methodology for their calculation. In this regard, regional authorities are again asking the government to delay the introduction of new rental rules by two years, or better yet, cancel them until the situation stabilizes. But market participants believe that the government will not give up these revenues in the face of a budget deficit.

This year, forestry enterprises in the northwestern regions received state support for a number of items that exceeded the amount of the entire last year. Thus, payments to enterprises of the Arkhangelsk region for transport subsidies are already twice as high as last year, says Alexander Dyatlov, chairman of the Arkhangelsk Legislative Assembly Committee on Timber Industry, Agriculture and Ecology. Due to the fact that the list of compensation recipients included manufacturers of pellets and lumber, and the amount of limits increased from 300 million to 500 million rubles, such enterprises as GC ULK, Arkhangelsk Pulp and Paper Mill, Lesozavod 25, Onega LDK and Region-Les, the state paid 1.4 billion rubles. of the declared 1.6 billion rubles.

Another about 1.8 billion rubles. nine registered manufacturers in the region will be able to receive a government decree that expands the possibility of subsidizing up to 80% of transportation costs when shipping products through the ports of the Northwestern Federal District.

However, Mr. Dyatlov notes, there are difficulties in obtaining transport subsidies: “Not everyone can receive compensation for logistics costs. Whoever submitted the documents first received it, and then the money ran out and the rest were left without support.” Kommersant’s sources in timber companies confirm that similar problems exist in other regions with large-scale timber harvesting, remote from sales markets.

According to industry participants, the effect of state support is offset by the rise in rental prices for forest plots. As Kommersant learned, the governors of four large timber regions – Vologda, Arkhangelsk, Novgorod regions, as well as Karelia, Georgy Filimonov, Alexander Tsybulsky, Andrey Nikitin and Artur Parfenchikov, appealed to Prime Minister Mikhail Mishustin with a request to reduce the fiscal burden on forestry companies . In particular, officials asked to amend the April Resolution No. 578, which changed the methodology for calculating rental rates for forest plots, and as a result, the average coefficient of liquid timber stock per 1 hectare of cutting area, as well as rates for timber removal, increased. Officials note that rent will already rise in price as part of the December government decree on increasing rent coefficients in 2023–2026, and additional indexation from January 1 will entail a double increase in rental costs.

The governors propose to postpone the entry into force of the resolution by two years. According to Mr. Dyatlov, “it is already obvious that 2024 will be a difficult year for the timber industry, so the most correct thing would be not just to delay the entry into force of the new methodology for calculating rates, but to completely cancel all fiscal measures for companies in the sector.” The situation for industry players, he adds, is complicated by the increase in tariffs of JSC Russian Railways by 40% over two years, as well as an increase in customs duties by 7% on turnover for pulp and paper mills and the withdrawal of excess profit tax. “To all this we can add the rise in prices for equipment and spare parts by two to three times, the rise in fuel prices and the persistence of problems with sales,” says Mr. Dyatlov.

Kommersant’s sources in timber companies believe that in conditions of a budget deficit, when the government is looking for additional income items by any means, it is hardly worth counting on a weakening of the fiscal regime in a particular forest industry. They recall that the company and the authorities already made similar requests to Deputy Prime Minister Victoria Abramchenko in the summer, but this did not bring concrete results.

Olga Mordyushenko