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Russian Timber Industry
A Co fli ti g Message
Paul D. Owen, President
Vanport International, Inc.
WHAT TERMS OR THOUGHTS COME
TO YOUR MIND?
The Russian Timber Industry
In The Past Russia Was Considered
• Closed
• Obscure
• High level of illegal activity
• Dangerous
• A quick way to lose money
• Illegal logging was prevalent (just 10
years ago it was estimated at $1 Billion)
HOW MUCH FORESTLAND AND TIMBER IS
FOUND IN RUSSIA?
Russia has 25% of the global
timber resources but less than
3% of the global timber
production.
65% of the Russian Territory is
covered by forests.
0%
5%
10%
15%
20%
25%
Russia Brazil Canada USA China
% OF GLOBAL TIMBERLANDS 25% 14% 6% 6% 4%
Largest Timber Owning Countries in the World (Source: FAO, 2004)
90% of the major timber species that
ake up the forests i Russia are…. • Larch (Larix Siberica)
• Pine (Pinus Sylvestris)
• Spruce (Picea Abies)
• Siberian stone pine (Pinus Siberica)
• Oak
• Beech
• Birch
• Aspen
Coniferous
77%
Hardwood
23%
Russia’s Major Timber Species Clusters
Only 44% of the total forested area in Russia is considered to be accessible for forest exploitation.
Larch
57%
Pine
26%
Spruce
17%
Russia’s Major Coniferous Group
Species
Russia Canada United States
100% 94%
39%
0% 6%
61%
Where are the forests located?
Public Lands Private Lands
78%
22%
Where within Russia is their timber resource located?
Asian Russia European Russia
Lack of Infrastructure for
increased logging In deep Siberia and the Far East where more than 50% of the
standing timber exists there is no infrastructure at all.
In these areas, you will find around 224 million hectares (553
million acres) of completely unbroken and undeveloped forests.
Only around 250 million hectares (618 million acres) of
economically efficient and accessible forests are available for
harvest and processing.
Note that there are 3 billion acres of timberlands in Russia.
Russian sawmilling technologies are nearly 25~50
years ehi d the rest of the world’s saw ill industry.
Only a few dozen of the more than 2500 sawmills
and wood processing facilities in Russia currently
use modern sawmilling technology.
But today, a few new sawmills are being built with
European and US technology.
Russian Red Pine Lam Stock for Japan
Russian Birch Plywood
The Russian Economy is Booming • The unemployment rate in Russia dropped from 5.3% in July to
5.2% in August
• Although the average Russian citizen earns a salary of around
$800/month, in the sawmill industry in Siberia
• Sawmill workers $1000~$2000/month
• Sawmill supervisors $3000~$5000
• Log truck drivers $4000~$5000
• Sawmill Managers $5000~$25000 depending on the size of
the company
• Russia has surpassed Germany to become the 5th in terms of
purchasing power in the world with a $3.4 Trillion dollar GDP.
• This increased purchasing power in Russia has caused imports of
finished products to increase dramatically. From flooring to
furniture containerized imports are up dramatically.
• Containers are now readily available due to increased imports of
finished goods. Providing access to more export markets for
Russian wood products.
Interesting Information to Note • Ministry of Forestry announces rapid growth in timber harvesting
of 45% by 2016 and a doubling or processing by 2016. Reality,
harvests are flat to declining.
• Access is getting harder and profits are non-existent.
• China log imports from Russia down 12.8% from 2012.
• China lumber imports from Russia up 10.3% from 2012.
• New Zealand is now the largest log supplier into China ahead of
Russia. USA and Canada are a close #3 and #4 in log exports to
China.
• Concern over Russian Fiber competition is well place, but what is
reality?