30% to 50% of Timber Felled in Russia Is Illegal

Of all timber felled in Russia, 30% to 50% is illegal. Tax agencies lose about USD 30 billion annually. This is according to the statement made by Igor Tikhii, Director, Development, of Lesprom Industry Consulting, at the opening conference of the All-Russian Timber Industry Forum.

According to Mr. Tikhii, due to the absence of clear-cut environmental policies and a forest cadastre, Russia's efficiency of the use of timber resources is among the lowest if compared with developed countries. In Russia, felled annually is 160 million cubic metres of timber while the annual profits of the whole timber industry amount to mere USD 4.3 billion. In the meantime, in Finland, with just 50 million cubic metres of timber felled, the annual profits come to USD 10 billion. He further said, while Russia has 25% of all world's forests, it accounts just for 3% of the world's timber market.

At this time, according to the contributor, Russia exports mostly raw round timber, the share of finished products just reaching 20%. In the meantime, up to 85% of Scandinavian countries' exports consists of ready products. In Russia's timber industry, fixed assets are 50% to 60% worn out, while domestic machinery producers are unable to make the necessary equipment. There is also a shortage of skilled workers, unceasing conflicts with environmentalists and public organisations, and quarrelling between the owners of timber-processing companies.

On June 18 this year, the government of the Russian Federation approved the new concept of development for timber and lumber industries of the country. Once everything provided for therein has been implemented, the productivity of the industries' companies should quadruple.