Russian Forestry and Wood Supply Operations Analysis
URAL FEDERAL DISTRICT
KHANTY-MANSI AUTONOMOUS OKRUG
Khanty-Mansi Autonomous Okrug, also known as Yugra, cannot boast a mild climate or a convenient
geographical position. Instead, its enormous oil reserves make it a highly self-sustaining region of Russia.
Khanty-Mansi Autonomous Okrug -- Yugra belongs to the Ural Federal District.
Formally it is a part of Tymen Oblast, but is still an equal-right constituent
of the Russian Federation. The area of Yugra is 531,800 km², and it is the
ninth largest region of the RF. It extends 1400 km from west to east, and
900 km from north to south. It has a population of 1,536,900.
Its capital is Khanty-Mansiysk, with a population of 85,000. The region's
largest cities are: Surgut (324,000), Nizhnevartovsk (263,800) and Nefteyugansk
(138,000).
GEOGRAPHY AND CLIMATE
Khanty-Mansi Autonomous Okrug -- Yugra is located in the middle of the
West Siberian Plain. The terrain is predominantly flat, with many bodies of
water. The main part of the area is heavily marsh-ridden taiga. The main
rivers are the Ob and its tributary, the Irtysh.
The climate is temperately continental, characterized by rapidly changing
weather conditions, especially inbetween seasons. The region's territory is
open to the north, which lets in cold Arctic air masses.
KhMAO is a region equal in type to the Extreme North regions.
RESOURCES
Yugra is the country's main oil and gas region, providing 7.3% of worldwide
and 50% of Russian oil production. Since the start of the exploitation of Yugra
reserves (in the 1960s), over 10 billion tons of crude has been produced there.
Nearly one half of the oil production is accounted for by 11 large oil fields,
with over 5 million tons produced in each. In all, 461 oil fields have been
discovered in Khanty-Mansi Autonomous Okrug, of which 355 are in the
distributed reserves.
TRANSPORT
There are over 18,000 km of roads, of which 13,000 km are hard surfaced.
The main highway connecting the Okrug with Russia's other regions extends
via Nefteyugansk, Tobolsk and Tyumen.
There is a total of 1106 km of railway track. In the west of the Okrug, the
railway serves the forestry enterprises, and in the north-west, the oil and
gas industry facilities.
Civil aviation assets comprise ten airports, of which Surgut, Nizhnevartovsk,
Khanty-Mansiysk and Kogalym have international status.
In the summertime, there is active cargo and passenger traffic on the Ob
and Irtysh rivers.
ECONOMY
Khanty-Mansi Autonomous Okrug - Yugra is an economically self-sufficient
donor region of the RF, leading in several essential economic indicators.
It is number one in Russia in terms of electric power generation and oil
production; second place in Russia's industrial output, natural gas production,
and budget tax revenues; and third in Russia's investments in fixed capital.
Over 90% of industrial output is accounted for by the fuel and energy sector,
therefore the economy of KhMAO-Yugra directly depends on international
oil prices.
FORESTRY: In the shade of the oil and gas sector
The status of Yugra's forestry is greatly determined by the region's specific
feature, as it hosts a powerful, national level oil and gas complex. Over
70 oil and gas companies, whose facilities are located on forestry land,
operate in the Okrug. Therefore, the main uses of the Yugra forests are:
geological research of mineral resources, development of mineral deposits,
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FORESTRY
construction, reconstruction, and the operation of infrastructure facilities.
Timber harvesting is of secondary importance. Annually, crude and oil product
spills are recorded on forestry land, attributable to pipeline utilization.
As is noted in the Department, currently, several statutory documents of
various levels set forth obligations of forestry land leaseholders (who are
responsible for the forests being polluted with oil products) in relation to
land reclamation. But the mechanism has not been determined yet. There
is no uniform approach to reclamation, its quality assessment, the procedure
for the allocation and leasing of forestry land plots, and the issue of permits
and licenses for the reclamation of oil-polluted land.
Yugra is one of few regions where the problem of "illegal loggers" does
not exist. The region is too far from any sales markets, and its transport
infrastructure is too poor for timber theft to be profitable. Where any cases
of illegal cutting are still recorded, it turns out that the trespassers are fuel
/ energy sector companies and their contractors, who clear forested sites
without waiting for appropriate permits.
The authorities believe that the key problems in the development of lease
relations in KhMAO are the almost total unavailability of vacant forestry plots
for timber harvesting that would be economically attractive to big business,
and lack of a clear mechanism and efficient practice of allocating forestry
plots to small business for timber harvesting. The existing system of forest
resource distribution substantially limits the simultaneous use of a forestry
plot for different purposes. The practice is such that two different users in
one plot face problems when using forest land jointly.
THE FORESTRY AND TIMBER SECTOR
The share of the forestry and timber sector in the industrial output structure
of Khanty-Mansi Autonomous Okrug -- Yugra is small, a mere 0.2 percent. The
strategy of the region's socio-economic development provides for its increase
to 0.7% by 2020. There is a potential for this, because Yugra is a leader
among constituent members of the RF most provided with timber resources.
The timber harvesting by companies of the forestry and timber sector of
KhMAO--Yugra was 2.3 million m³ in 2014 (in 2013, 2.8 million m³; in 2012,
2.4 million m3; in 2011, 2.3 million m³; in 2010, 1.8 million m³). According to
estimates by experts of the Department of Natural Resources and the Non-
Energy Sector of KhMAO-Yugra, the region can harvest about 5 million m³ of
timber annually; these forest reserves are deemed to be economically accessible.
Over 130 organisations and individual enterprises are involved in the forestry
and timber business in the Autonomous Okrug. The sector's structural base is
large timber harvesting and processing companies. The largest one is Yugra
Timber Holding JSC, with a full industrial cycle from forest exploitation and
reclamation to the manufacture of hi-tech products such as sawn timber,
LVL, and wooden houses constructed by frame-panel technologies.
Three board-making facilities have been set up: a chipboard factory with a
production capacity of 265,000 m³/year (Ugra-Plit JSC in Sovetsky); an MDF
fiberboard factory with a production capacity of 50,000 m³ of boards per
year (Zavod MDF JSC in Mortka) and an LVL timber factory with a production
capacity of 39,000 m³/year (LVL Ugra JSC in Nyagan).
The products of Yugra's timber sector is exported to Germany, the UK, Italy,
Greece, Turkey, Egypt, Denmark, Latvia, Finland, Sweden, and other countries.
The main exported products are sawn timber, LVL and fuel pellets.
Wooden house construction in the Autonomous Okrug has a vast margin
of unrealized potential for large-scale development. The overall capacity
of the facilities enables production of 120,000 m³ of factory-made homes.
The total volume of low-grade timber and sawing waste processed by all the
facilities exceeds 500,000 m³/year. As a method of increasing the utilization of
low-grade timber boiler plants have been converted and new ones constructed
to use wood biofuel and wood chips in several of the region's municipal entities.
Among the problems typical for the region's forestry and timber sector, the
Department of Natural Resources and the Non-Energy Sector of KhMAO-Yugra
lists the following:
• a lack of financial stability due to the debt burden on enterprises,
and a lower demand for the products due to the crisis situation in the
economy;
⚫ the seasonal nature of timber harvesting (five months a year);
• growing energy charge rates;
poorly developed transport infrastructure: insufficient quantity of
logging roads, and low availability of rail transport;
⚫ a high proportion of low-grade timber and production waste (50% of
the raw material harvested);
⚫the inefficient allocation of production forces and the depletion of
accessible reserves.
Furthermore, the key enterprises in the sector are local major employers,
which rules out cutting production costs by wages and payroll optimization.
Evgenia Chabak, Oleg Prudnikov
Source: Natural Resources and Non-Energy Sector Department of Khanty-
Mansi Autonomous Okrug - Yugra
Description of the forestry land of Khanty-Mansi Autonomous Okrug - Yugra
as of January 1, 2014
50,406,600 ha - the total area of lands occupied by forest
49,355,726 ha – state forestry land
199,407 ha- land of populated areas which are forested
851,506 ha - land of specially protected natural areas
53.9% - the forest coverage
3,180,930 th m³ - the total yield
80.03% -softwood
19.94% hardwood
The species composition
of the yield (by volume)
39.6 mln m³ - the allowable cut
other wood species and brushwood
20.3 mln m³ - softwood
Production indicators of forest and timber
facilities in KhMAO-Yugra in 2014
0.03%
Forested area distribution
by age group
Common pine
45.8%
Young growth
10.3%
Spruce
9.4%
Production
output, 1000 m³
Dynamic against
2013,%
Fir
0.5%
Sawn timber
279.42
93.5
Middle-aged stand
18.5%
Larch
2.8%
Chipboard
156.75
190.6
Siberian stone pine (cedar)
Birch
21.4%
Ripening stand
Fiberboard (including
13.2%
50.8
127.3
MDF)
14.6%
LVL
2.03
49.6
Aspen
4.8%
Mature and old growth
79.2%
Plywood
17.3
107.5
Other wood species and
Wood pellets
23.1
156.6
0.6%
of which old growth
21.2 %
brushwood
Pulp chips
154.5
104.2
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