For many years Finnish companies have been a major partner in the development of the the Russian forest industry. Finnish forest industry companies also used to buy large amounts of wood from Russia each year. In 2008, the purchases totalled 10,6 million cubic metres (without bark), which is equivalent to 12,3 million cubic metres of timber with the bark still on. Only a small proportion of this timber would be usable in Russia or of any commercial value for the country’s own industry.
According to the latest information roundwood imports from Russia into Finland amounted in January-December 2009 to 6,1 million cubic metres (over bark). Total wood imports during that period were 9,2 million cubic metres, which means the reduction of nearly 60 % compared to the previous year.
Significant investments for the development of the Russian forest sector
Over the last two decades, Finnish forest industry companies have made considerable investments for the development and modernization of the the Russian forest sector. The total value of the investments (including ancillary investments) is nearly one billion euros.
Finnish companies are involved in harvesting, production of sawn goods and plywood, and packaging industry mainly in northwestern Russia and in Moscow region.
Some years ago Finnish forest industry companies engaged in the production and harvesting in Russia a workforce of almost 7 000. Now the number of jobs has been cut about by one fifth. In many Russian regions these companies are vital as a source of employment and livelihood, and they also serve as engines for growth.
Wood delivered for exports offered a lot of jobs
Exporting timber has been a major provider of jobs in northwestern Russia. For example, the harvesting of the timber supplied to Finland was estimated to provide direct employment for almost 40 000 people. If indirect impacts are included, the this exported timber used to employ nearly 100 000 people in Russian rural areas.
The reduced timber exports to Finland and the automatization of the harvesting operations have diminished the amount of jobs in harvesting by as much as 60-70% compared to the all time high period.
Future cooperation chances still remain
Russia remains an important partner for the Finnish forest sector. The rising economy and abundant energy and forest resouces of Russia offer a variety of opportunites in developing far-reaching business.
Further investments in the Russian forest industry are only possible, if a stable and predictable business environment can be secured. The gap between a decision to build a sawmill and the actual completion of the plant is at least two years, while for a pulp mill, the minimum is five years.
Export duties of wood, which are comparable to export restrictions, are now triggering off a long-term cycle of negative development and make it more difficult for both Russian and non-Russian forest industry companies to expand their operations.