Forest Sector Development Opportunities in NorthWest Russia

1
Forest Sector Development Opportunities in
North-West Russia

• Northern Dimension-Seminar
• 15.01.2001, Oulu
• Harri Ahveninen

2
Forest Area in RussiaTotal 653 million ha
Far East
European Russia
26.8
46.6
East
West Siberia
Siberia
21.8
31.3
89.7
199.7
56.4
180.1
Softwood
Hardwood
About 60 of the global softwood forest area
3
Forest Age Structure in Russia

• Due to large forest area, greatly underutilised
  resources
• Large mature/overmature area enables to combine
  production and protection forests
• Old age of forests in excessive mortality and
  natural losses

4
Russian Federation AAC and Wood Harvesting
5
North-West Russia AAC and Wood Harvesting
6
AAC and Wood Harvesting
Leningrad
m3 (thousands)
15000
10000
5000
0
1990
1995
1999
Clear Cutting
Thinning
Other
AAC
7
AAC and Wood Harvesting
Karelia
m3 (thousands)
25000
20000
15000
10000
5000
0
1990
1995
1999
8
Rawmaterial Removals in Russia
Million m3
400
350
300
250
200
150
100
50
0
1970
1975
1980
1985
1990
1995
1997
1998
1999
2000 e
Year
Wood Removals
Industrial Wood
9
Principles of Sustainable Forest Management
Soil Water
Biodiversity
Global and RegionalCarbon Cycles
SUSTAINABLE FOREST
Sustainable Production of allforest products
MANAGEMENT
Socio-Economic
Benefits
Natural/Cultural
Forest Health
Heritage
Vitality
10
Russian Forest Industry Production
m3 (thousands)
tons (thousands)
1800
35000
1600
30000
1400
25000
1200
20000
1000
800
15000
600
10000
400
5000
200
0
0
1993
1994
1995
1996
1997
1998
1999
2000
Round Wood (m3)
Sawn Timber (m3)
Plywood (m3)
Pulp (ton)
Newsprint (ton)
11
Wood Industry Production in Russia
14
12
10
Pulp-paper and board in million tons
8
Sawn wood and panels in million m3/a
6
4
2
0
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000 e
Year
Sawn Wood
Wood Panels
Paper and Board
Pulp
12
Domestic Forest Product Market DevelopmentWood
Raw Material 1994-2010
13
Typical Problems of Russian Enterprises

• Old equipment
• Old processes

Outdated Technology

• Interruptions in
• raw material supply
• Inefficient energy
• household
• Assets poorly maintained

Poor Operating Efficiency

• Shortage of
• working capital
• No investment
• capital

Lack of Capital

• Limited experience in
• market economy
• Lack of efficient control
• and incentive systems

Old School Procedures
14
Vision of Requisite Institutional Adjustments in
the Russian Forest Sector
FUNCTIONS OF WOOD HARVESTING
COMPANIES WITH LONG-TERM FOREST
UTILISATION RIGHTS
Forest taxes /
stumpage
payments
Compensation of
silvicultural costs