Investment climate in Russia needs further development 

So far Finnish forest industry companies have invested in the Russian forest sector worth about 1 billion €. Investments have been made especially in saw mills, plywood and paperboard mills.

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For several decades the wood trade has been an established business between parties and during the last 15 years Russia has earned by exporting wood into Finland alone approximately 7 billion €.

Russian authorities rightfully stress the necessity to develop deep processing in the forest sector of Russia and they still trust that investments may be attracted by applying e.g. export duties on wood.

However, in attracting new investments the local investment climate plays a key role. This means paying attention to such matters as profitability of investment and stability of legal surroundings in the country. One of the decisive factors is the guarantee of wood sourcing at a competitive price. The list of the key conditions includes also both protection of foreign investments and operative infrastructure. Simultaneously attention must be paid to existence of the market for finished products and potential for the market growth.

Slowly growing woods of the boreal zone are in heavy competition especially with the fast growing plantation forests of the South- America. It's of essential importance to take care of the competitiveness of the boreal zone forest sector and e.g.  elimination of the Russian export duties on wood would serve as a step to strengthen the position of the boreal zone forest industries in this competition.

Updated 5/12/2010


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