Forestry in Russia

The timber industry is a significant contributor to the economy of Russia, worth around 20 billion dollars per year.

There are significant profits to be made selling timber to China in particular, and there have been allegations of illegal logging within Russia.

On 2007-12-06, Oleg Zhukovsky, a senior manager at VTB Bank working with the Russian timber industry, was found dead in the empty swimming pool of his dacha outside Moscow. Links to the criminal gangs within the Russian timber industry are suspected, and a murder investigation is underway. ^{[1] [2]}

Russian Forest based industries financials

Profitability ratio of Russian forest industry companies decreased harshly in 2008, as indicated in the annual Top 50 Russian Forest Industry rating published by Lesnaya Industriya Russian magazine.

Following the results of 2008, joint revenue of companies listed in the Lesnaya Industriya’s Top 50 amounted to 216.34 billion roubles ($7.19 billion). Ten largest companies had over 70% of the total Top 50 joint revenue. Joint net benefit of 50 companies made up 6.26 billion roubles ($208.1 million). Share of woodworking companies that do not deal in pulp and paper business was slightly over 27% of the total revenue and 26.8% of the total net benefit.

Average profitability ratio of Top 50 companies decreased to 0.7%, compared to 9.0% in the previous year. Woodworking companies’ profitability was slightly higher than that of pulp and paper companies (5.7% and 4.9% respectively). Only four of the Top 50 companies managed to reach a double-digit profitability ratio.

Zelenodolskiy plywood plant had the highest profitability ratio (17%) in 2008. The fastest-growing forest industry company in Russia was United Panel Group, which revenue boosted by 89.5% up to 3.04 billion roubles. Among pulp and paper companies, the fastest-growing was Obyedinyonnye bumazhnye fabriki (United paper mills, +49.6% up to 1.76 billion roubles).

Ilim Group gained the largest net benefit un 2008 (1.67 billion roubles) and was also listed in the Top 50 forest industry companies as having the largest revenue (37.92 billion roubles).

The Top 50 Russian Forest Industry rating is prepared and published by Lesnaya Industriya magazine on the base of companies’ accounting reporting and data provided by th companies. ^[3]

Notes

1. ^ Halpin, Tony (December 8, 2007), "Top banker murdered as contract killings return to haunt Moscow", The Times (London), http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3019237.ece 
2. ^ Nowak, David; Stewart, Catrina (Tuesday, December 11, 2007), "Banker Found Dead In Pool", The St Petersburg Times, http://www.sptimes.ru/story/24109 
3. ^ Bogatyrev, Alexei; Fateeva, Veronika; Fedotkina, Yana (Tuesday, October 6, 2009), "Profitability ratio of Russian forest industry companies decreased harshly", Lesnaya Industriya, http://wood.lesprom.com/news/40679/ 

External links

• Timber Industry 2000-2004 (Kommersant)
• Siberia Logging (TED Projects)
• "Commercial Logging Fails in Russian Parliament", Environment News Service, November 26, 2003, http://www.ens-newswire.com/ens/nov2003/2003-11-26-04.asp 
• Litvinovna, Irina (October 2004), "Timber industry in Russia shows promise", The Logging and Sawmilling Journal, http://www.forestnet.com/archives/Oct_04/guest_column.htm 
• Forestry Code in Russia: to rent but not to own