The northwest is not particularly forested – Newspaper Kommersant No. 223 (7424) of 01.12.2022

The performance of timber companies located in the northwest continues to fall. For the third quarter, logging in certain regions fell by almost 40%. And, according to industry players, without state support, the situation will worsen further. The industry is asking not for cash subsidies, but for legislative easing and deferrals on payments. In particular, the introduction of a priority for timber cargo on the railway is being discussed.

Logging in the northwestern regions, which were most affected by the closure of European sales markets, fell by 16% over the first nine months to 38 million cubic meters. In the third quarter, the drop was 27%, to 10.5 million cubic meters, according to the forestry statistics of the Northwestern Federal District. The most problematic subjects in terms of timber production in January-September were the Komi Republic (a drop of 21%, to 4.7 million cubic meters), the traditional leader in timber harvesting in the Northwestern Federal District – Vologda (a decrease of 19%, to 10.2 million cubic meters ), Arkhangelsk (by 10%, to 10.8 million cubic meters) and the Leningrad Region (by 31%, to 2.8 million cubic meters). In the third quarter, the fall in procurement accelerated in many regions. Thus, in the Vologda Oblast it was 33%, in the Arkhangelsk Oblast – 15%, in Komi and Karelia – 14% and 39%, respectively.

Sanctions and the inability to redirect cargo flows to Asia due to expensive logistics are cited as the main reason for the market downturn. Companies of the Northwestern Federal District have repeatedly applied to the government with a request for state support. One of their key requests was to subsidize the cost of transportation by rail (by 50–100% without limits on the amount), as well as the establishment of a monthly quota by Russian Railways for each manufacturer to send direct container trains to China and the ports of the Far East. In response, the government noted that the size of the logistics subsidy had already been set (with a limit of 300 million rubles), and Russian Railways indicated that cargoes from industries that make the largest contribution to GDP are passed first.

However, as it became known to Kommersant, Deputy Prime Minister Victoria Abramchenko, who is in charge of the forest, sent a letter on November 28 to the Ministry of Industry and Trade and the Ministry of Transport with an instruction, together with Russian Railways, to work out the issue of amending the temporary rules for determining the order of cargo transportation in terms of prioritization by December 12 transportation of lumber in the east direction.

Kommersant’s sources in the timber industry believe that the adoption of this proposal will have a good effect on the producers of the Northwestern Federal District. “Now companies are seeking relief and deferrals that do not require budget expenditures, for example, the abolition of reforestation requirements for the next two or three years or the deferment of payments on the body of loans,” explains one of Kommersant’s interlocutors.

Segezha Group Vice President Nikolai Ivanov considers it expedient to reduce the burden on business in terms of licensing and control activities, to simplify customs procedures, the Central Bank’s standards for regulating credit and financial policy. In addition, in his opinion, it is necessary “to make adequate adjustments to the regulatory framework for the implementation of priority projects in the field of forest development, so as not to stop the investment process.” Alexander Dyatlov, chairman of the committee of the Arkhangelsk Regional Duma on the timber industry complex, nature management and ecology, agrees with this. In his opinion, the state needs to develop the domestic market, free timber companies from mandatory payments as much as possible, as well as postpone tax payments, loan payments and other mandatory expenses.

Roslesinforge notes that according to many indicators, the enterprises of the North-West Federal District do not experience a significant drop. Thus, the production of pulp and paper products, which is concentrated mainly in the north-west, remained approximately at the same level for nine months (6.6 million tons of pulp, of which 3.8 million tons were produced in the North-West Federal District, as well as 7.6 million tons of paper and cardboard, of which 3.9 million tons are in the Northwestern Federal District). They remind that now the state is looking for new logistics solutions, 97% of the operational forests of the district are included in the federal plan for forest management, which will be carried out at the state expense, and a deferment of lease payments is also provided.

Olga Mordyushenko