Russian business associations “Opora Rossii” and “Business Russia” sent a set of proposals to Deputy Prime Minister Victoria Abramchenko on measures to support the Russian domestic timber industry. The timber merchants highlighted the main problems of the industry: logistics, unavailability of imported equipment, difficulties in attracting financing and servicing debts. Market participants note that now it is necessary to solve not only the problems associated with sanctions, but also long-term issues that have become as acute as possible.
One of the main proposals reflected in the document is the inclusion of the Russian forest industry in the list of victims due to sanctions pressure. This should provide companies with access to state support measures and reduce the criteria established for timber industry companies for inclusion in the list of backbone organizations. The authors of the letter also suggest that the state support the reorientation of production to the domestic market and set a lending rate of no more than 10% per annum for this purpose. Export-oriented companies are proposed to be exempted from paying income tax for at least a year.
In addition, experts say that logistics costs should not exceed $70, which should help keep pellet production profitable. To solve the same issue in seaports, it is necessary to create a warehouse infrastructure.
According to Sergey Tarasyuk, head of the timber industry sub-committee of Delovaya Rossiya and director of Angara Les, the proposed initiatives are relevant for the entire timber industry in Russia.
“The measures proposed in the documents should help the timber industry maintain marginality by reducing logistics costs. It is proposed to temporarily exempt from weight control vehicles transporting wood and products of its processing; work out the issue of increasing the maximum allowable mass of a vehicle to 55 tons. We ask you to reduce the time for issuing all permits required for logging activities,” he stressed.
In addition, the authors of the letter propose to create a national system of voluntary forest certification and a special commission for exporters of wood products with a high share of value added, which would monitor and coordinate export prices, which would exclude dumping.
Another measure to support pellet production, traditionally oriented to international markets, is the change in the country’s fuel infrastructure and the transfer of boiler houses to biofuel. Moreover, this problem needs to be solved in the near future.
Commenting on the situation in the production of wood biofuels, Sergey Tarasyuk noted: “The market for pellets, traditionally supplied to the EU countries, is almost completely blocked. Since April 15, many certificates, including ENplus, have been withdrawn, and without them, products cannot enter European markets. Revenues of companies producing pellets have fallen by 80% in the last month alone. It is possible to reorient the pellet market to domestic consumption, but this will require significant investments in the modernization of heating systems – the replacement of coal-fired boilers with pellet ones. Not all regions will have funds for such transformations in the budget.”
The letter also contains a request to work out the possibility of supplying logging equipment, components and spare parts to it through third countries. The authors emphasize the importance of creating engineering centers on the basis of leading universities and the development of priority investment projects and public-private partnerships in the field of forestry engineering.
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