At present, the Russian forest products industry is facing a series of consequences brought about by the EU's trade restrictions on Russia. For example, rising prices of raw materials and accessories, logistical disruptions with Europe, the suspension of operations of many European companies in Russia, and the departure of major manufacturers of logging and wood processing machinery and equipment from the Russian market.
Clearly, against the backdrop of intensifying economic constraints, Russian Timber urgently needs support at the federal and regional levels.
Stabilize the wood industry and ensure employment
Russian Federation Prime Minister Mikhail Mishustin recently revealed that the government is considering more support for companies facing trade restrictions.
Russian Deputy Prime Minister Victoria Abramchenko also recently emphasized that "stabilizing the wood industry and ensuring employment" is one of the important tasks the Russian government is currently facing. "
In response to economic restrictions in Europe, the federal government has instituted a series of measures to support the timber industry. Among them, the task of the Russian Ministry of Industry and Trade is to speed up the formulation of the import substitution plan for wood and wood products, extend the preferential loan period of the Industrial Development Fund to 5 years, and give priority to supporting the import substitution project of wood products.
In addition, the federal government has taken other measures, including: extending the implementation period of investment projects in the field of forest development by 1.5 years; suspending the one-year periodical business review of small and medium-sized enterprises); organizing domestic enterprises to produce chemical raw materials, machinery and equipment and furniture Accessories and other wood processing auxiliary products.
Some support measures have begun to be implemented
As of now, some support measures at the federal level have begun to be implemented, and other measures will be implemented gradually. For example, the Russian government has approved a moratorium on periodic business reviews of SMEs until the end of 2022.
As one of the countermeasures, Russia's Ministry of Industry and Trade announced that it will ban the export of forest products such as birch for pulp, wood chips for fuel and logs for plywood to "unfriendly countries" for one year. Although the ultimate consequences of such countermeasures are not yet clear, at this stage it can be seen that restricting the export of such forest products will directly hit the EU and US markets. According to 2021 customs data, Russian timber exports to these regions and countries are worth about $504 million.
Regional government initiatives
In addition to the support measures from the federal government, regional governments and related organizations in the timber industry are also closely monitoring national policies and international situations, and have introduced measures to deal with the industry crisis.
Nizhny Novgorod
Wood industry practitioners in the Nizhny Novgorod region submitted a series of proposals to the local government, mainly concerning the import substitution of wood processing production equipment. They suggested that the local government organize local businesses to produce woodworking equipment parts that were previously reliant on imports.
Igor Glushko, director general of the Nizhny Novgorod Federation of Forest Owners, said that the economic crisis caused by trade restrictions has already had a negative impact on the demand of the timber industry, and that stopping the supply of plywood to European countries will directly lead to the logging of plywood logs. volume decreased.
In addition to plywood, demand for other products is also expected to decline. In this regard, Igor suggested that the local government should reduce the rent for the use of forest land and charge a corresponding fee in proportion to the output of forest products.
To date, the state has submitted more than 30 proposals to the Russian government to support the timber industry in Vologda and has established a local anti-crisis command. State officials have proposed that the federal government should issue quotas for the Northwest Federal District administrative entities to transport vehicles transporting timber products to Asian countries, reduce tariffs on rail transport of timber products, and defer payment of forest resource usage fees.
Kirov Region
Kirov Oblast is one of the most densely forested regions in Russia, and most of the region's forest products are exported. The head of the state government said that in the context of economic and trade restrictions, the local timber supply chain is seriously threatened, and the state government is currently working hard to build a new logistics system. In addition, the shortage of supporting equipment and necessary accessories for wood production facilities is also an urgent problem to be solved. To this end, the state government has taken the lead in helping wood companies in need find local producers.
Krasnoyarsk
In Krasnoyarsk Krai, to support local timber traders, Governor Alexander Uter proposed to first include the forestry industry on the list of industries affected by Russia's trade restrictions and to provide transport subsidies for the export of wood pellet fuel to the Asian market. 2 It is to consider tax relief for export-oriented forestry enterprises. At the same time, the implementation period of investment projects in the forest products industry was postponed by one year, allowing farmers to engage in logging activities.
Epilogue
Currently, with Russia losing its European export market, Asia has become the largest export market for Russian timber and wood products, especially China.
In the context of economic and trade restrictions imposed on Russia by many European and American countries, Russia has taken a number of measures to support the development of domestic timber industry production, and it is expected that more timber supplies will be transferred to my country. Not only that, as Russia reduces timber tariffs and increases transportation quotas, it is expected that the cost of domestic timber importers from Russia will decrease.