Finnish Forest Research Institute  Metla

Press release 01.03.2006

Developments in the Russian forest sector

The Russian forest sector is going through various changes, the scope of which include forest management, wood harvesting, timber trade as well as ownership of resources. A strong factor directing the change process is the new Russian Federation Forest Code, the processing of which has, however, been prolonged in the Duma. The new Code will strengthen especially the position of entrepreneurs. In harvesting, the cut-to-length method will gain ground from the tree-length method, and it has already opened markets for new logging technologies. Increasing cuttings are leading to increased transportation distances and costs caused by investments in the road network as well as logging and transportation equipment.

Interim results achieved by Towards progressive forest sector in Northwest Russia, a research consortium coordinated by Metla, were presented at a seminar held at Metla House in Joensuu on March 1 st. The objective of the research consortium is to produce information on changes and developments taking place in the Russian forest sector and to obtain a deeper understanding of the development of the Russian forest sector. Reliable information will help the Finnish forest sector to provide for and adjust to these changes and to improve its operational capabilities.

Tatu Torniainen , Researcher at the University of Joensuu, explained the status of the new Forest Code currently being processed by the Russian Duma: when approved, it will strengthen the role of the private entrepreneur in forest management and silviculture. The reforms related to forest administration are intended to rationalize law enforcement and control, as well as to transfer operative silvicultural tasks to entrepreneurs. According to Torniainen, the rapid changes in the relationships of ownership and jurisdiction as well as confusion over the responsibilities of administrative operators have hindered the creation of harmonious forest policy. It seems that the general political and economic operational environment directing the forest economy has, so far, provided little support to the development of the forest sector, which, however, needs commitment to long-term development.

In his presentation, Professor Vladimir Siounev from the Faculty of Forest Engineering at Petrozavodsk State University said that last year’s wood harvesting volumes in the Republic of Karelia were approximately 6 million m 3. An increasing portion of roundwood is harvested using the cut-to-length method instead of the old tree-length method, and the markets related to the corresponding new technology seem to be auspicious in Karelia. Karelia has been at the forefront in adopting the cut-to-length method; it is more frequently used in Karelia than elsewhere in Russia, with almost half of Karelian logging being cut-to-length. Professor Siounev believes that Finnish experience and technology should be utilized in the development of Karelian wood harvesting.

Professor Pekka Ollonqvist, representing Metla, talked about the strong business growth of Finnish companies in Russia since 1998. Enterprises have mainly positive expectations for continuous growth. Ollonqvist had a word of warning for companies planning new investments based on further use of coniferous roundwood in northwest Russia: distances of transportation for roundwood or sawn timber are likely to be longer. Investments related to improvements in infrastructure as well as logging and transportation equipment will also cause expenses to companies. When enforced, the renewed Russian Federation Forest Code will emphasize perseverance in timber procurement planning.

Senior Researcher Anne Toppinen, representing Metla, described a research survey focusing on business strategies of wood working companies in the Leningrad region. The results indicate that roundwood’s availability is more important for local companies than its price. Companies want to invest especially in development of staff skills and focus on the EU market. Toppinen thinks that there will be increased competition in the Finnish export markets, not only concerning basic sawn timber but also more processed products.

Counsellor Hannu Kivelä, who works as the Forest Expert at the Finnish Embassy in Moscow, presented a review of the recent development of the Russian forest sector. He spoke about the prolonged processing of the new Forest Code in the Russian Duma, about the Federal Forest Service and its fight against illegal cuttings, and about the development programme of forest industry as well as the federal forest management objectives and agenda.

More than 30 researchers are participating in the ”Towards progressive forest sector in Northwest Russia ” research consortium. In addition to Metla, University of Joensuu, Pellervo Economic Research Institute PTT, European Forest Institute EFI, Faculty of Forest Engineering at Petrozavodsk State University, Saint Petersburg State Forest Technical Academy, and Moscow-based All-Russian Research Institute of Silviculture and Mechanization of Forestry and All-Russian Institute of Continuous Education in Forestry are represented in the consortium. The consortium is part of the Russia in Flux research programme under the Academy of Finland and is partly funded also by the Finnish Ministry of Agriculture and Forestry as well as the participating organizations.

The seminar was the first event in a series of the 25 th anniversary jubilee year of the Joensuu Research Unit of the Finnish Forest Research Institute. Other events during spring 2006 include the Wood Science Today in May and an introduction to Metla in the SILVA 2006 Forest Exhibition at Pärnävaara, Liperi, in the proximity of Joensuu.

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