OREANDA-NEWS. Igor Sapunkov, Director Forest Strategy, spoke at the 4th International Adam Smith Conference held in Moscow. Speaking at the session "12 Months: Changes in the Russian Forestry Sector", Mr. Sapunkov summarized the most significant trends and development areas in the industry and outlined Ilim Group's wood supply efforts.

At presents Ilim's own logging volume is about 9 million cubic meters out of a total of 14 million cubic meters of processed wood. There are plans to expand own harvesting capacity in line with the growth of production output. The Company will also continue to reduce wood cost which is a significant component of its production costs.

Igor Sapunkov also outlined the challenges and development opportunities for the Russian forestry sector. He believes that companies in South America, Asia, and Africa have made great progress in forest management and use of advanced reforestation practices. For instance, annual wood growth per 1ha in Brazil approximates 45 cubic meters against the average of 2.2 cubic meters in Russia. In order to remain competitive despite continuously growing costs, Russia has to achieve a major breakthrough in forest innovations to confidently compete in the global forest products market. "Russian companies have been long discussing the need to introduce sustainable forest management and reforestation practices, while other forest countries have long been practicing advanced forest management and using innovative practices to grow target wood species at an accelerated rate. We are at risk of lagging behind other global forest countries and wasting the enormous potential offered by our national renewable forest resources. We need to remember that we operate in the global competitive environment and it is nowadays critical for Russian companies to implement innovative forest management practices", concluded the expert.