Russian Forestry and Wood Supply Operations Analysis
{
PULP AND PAPER INDUSTRY
Fig. 2. Consumption of OSB by regions of the world in 2011-2013
8.000
7 552
6 631
6839
7 000
metsi
Russian Pulp and Paper Industry:
Capabilities and
Capabilities and Challenges
6 000
5.000
6 015
PULP AND PAPER INDUSTRY
7 529
7 565
7 184
7 477
O
5 000
6 674
4 000
3 000
production,
thousands of tons
4.000
8 020
7 434
7 581
7 700
7373
7 581
7 545
7 741
7 763
exports,
2000
thousands of tons
3.000
2 000
1000
1 000
2 181
1787
1810
1977
2.095
2 162
2 134
1 600
1179
0
imports,
thousands of tons
consumption,
thousands of tons
O foreign trade
0
O
-295
O
-334
-1000
O
-383
O
-806
-693
-1 239
-1 000
-1 408
-1 413
balance for P&PI,
US$ millions
-2 000
O
-1 628
O
Currently, Russia's economy in general and its pulp and paper industry in particular are facing pressure
from many external and internal factors.
-2 329
-2 590
-2 552
-2 537
-2 507
-2 338
-2 307
-2 360
-3.000
-2677
-2000
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: RAO Bumprom
Fig.1. Industrial production indices
in Quarters I-III of 2010-2014, %
120
114,2
115
112,2
117,5
110,1
110
108,8
106,5
105,2
104,9
105
106,3
100
95
90
2010
96,2
99,9
90,5
2011
2012
2013
2014
Timber processing
P&PI
111,6
102,3
94,5
Manufacturing sectors
Source: RAO Bumprom
According to Rosstat, the industrial production
index for the first three quarters of 2014 was
102.3% for manufacturing industries, 94.1%
for timber processing and 111.6% for P&PI (see
Fig. 1).
The industrial growth rates in the forestry and
timber sector, as in the manufacturing sectors in
general, have been decreasing over the last five
years, which indicates the ongoing stagnation of
the national industry.
The negative foreign trade balance related to
P&PI products has been increasing over the last
decade. While paper and paperboard product
consumption has been growing in Russia in recent
years, the positive trend in the manufacturing
remains insignificant, and until recently, the
growing domestic demand has been covered by
imports. With the P&PI product export tonnage
exceeding the imports twofold, the value of
imported products exceeded the export value
by $1.4 billion in 2014. It should be noted that
in 2013, the indicator was even higher at $1.6
billion. (Fig. 2)
This has become possible due to shortcomings
in the production structure in supplying the
domestic market's needs for high quality consumer
goods, in particular coated paper for the printing
industry.
The output of marketable pulp increased to 2.2
million tons in 2014, having recovered after an
output drop in 2013 due to pre-planned equipment
shutdowns at the Bratsk facility of the Ilim Group
and at the Arkhangelsk pulp & paper mill. In the
near future, marketable pulp made by the Mondi
Syktyvkar mill is expected to enter the market, as
a drying machine for over 100,000 tons of bleached
sulfate pulp has been started up.
With the restart of newsprint production
by Kondopoga JSC, the startup of updated
capacities at the Koryazhma mill of the Ilim
Group, at the Kamenka paper mill and some
other facilities, the paper output in Russia
grew to 4,950,000 tons in 2014, with newsprint,
in particular, increasing to 1.7 million tons.
Cardboard output continues to grow, although
the growth rates have noticeably slowed down.
In addition, losses in pulp production have
been reduced, and the overall profit for P&PI
enterprises increased by 3.1 billion rubles in
January-June 2014.
Fig. 3. Industrial product manufacturers' price indices in
Quarters I-III of 2012-2014, %
110
109
108
106,5
107
107,7
107,2
106,0
106
Other important indicators are the prices and
charge rates (Fig.3).
104,9
105
104,5
104
103,0
103,9
102,5
The pulp and paper price indices lag behind the
indicators for other sub-sectors of the forestry
and timber sector, i.e. timber harvesting and
processing, and behind the price indices for
manufacturing industry products in general.
As compared to the P&PI, the prices for raw
materials, chemicals, energy, and transport are
showing priority growth rates, which results in
higher prime costs and a lower overall rate of
return for the sector's enterprises, despite the
above-mentioned production output growth.
Reviewing the financial indicators, a highly
significant issue arises - investments in the
development of the sector (Fig.4).
Unlike timber processing where the companies'
own funds make 43% of the total investment
and the investment growth exceeded 21% in
January-September 2014, in the pulp and paper
industry, with the proportion of own money
at over 80%, the investment rates dropped
by 22.6%.
103
102
101
100,4
100
99
98
97
96,6
96
95
2012
2013
101,8
Timber harvesting
Timber processing
Pulp and paper
industry
Manufacturing sectors
2014
Source: RAO Bumprom
46
#6 (2015) RUSSIAN
FORESTRYU
RUSSIAN #6 (2015)
FORESTRY U
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