OREANDA-NEWS. September 18, 2009. Russia was not able to process all harvested wood before the crisis, supply on the roundwood market often exceeded demand; under conditions of the global financial crisis the situation has become even more acute. Timber processing decreased by 26.9% compared to the similar period of 2008, pulp & paper production, including publishing, fell by 16.2%.

An untimely delay of another increase in export duties by the Russian government also affected forest industry performance. Demand for Russian raw wood on external markets was very poor, Western consumers transferred to other supply markets, as reported in the analytic review ‘Russian forest industry performance in the first half-year of 2009’ issued by the Analytic Department of Lesprom Network.

Modernization projects at existing timber processing lines and new forest industry projects amid the financial crisis were either cancelled or delayed because of growth of energy tariffs and credit interest rates. Lack of demand for woodworking products among major domestic wood-consuming industries, i.e. furniture production and construction, led to a decrease in sawnwood and wood-based panels production, a number of companies had negative financial results.

Anti-crisis measures implemented by the Russian government in the first half of 2009 in order to stabilize the forest industry did not meet expectations. Forest industry companies incurred heavy losses in the first half-year, layoffs at the number of town-forming enterprises aggravated the social strain.

Analytic Department of Lesprom Network specializes in forest industry market research. The department gathers statistic data on timber processing and pulp & paper companies. Among Lesprom Network clients are largest Russian and foreign timber industry and investment companies.