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Russia Forest Industry Competitiveness &
Export Outlook to 2025
(with a focus on China)

 

Brochure

Table of Contents

 

The FEA/WOOD MARKETS team has spent many person-weeks in 2018 assessing the China supply chain and the increasing role of Russian softwood lumber in China. The outcome is now our second in-depth analysis report, Russia: Forest Industry Competitiveness & Export Outlook to 2025 (with a focus on China). What is clear from this outlook report is that “the Russians are coming” and are expanding their industry, improving their competitiveness and increasing their softwood lumber exports in ways that few may understand.

The nearly 10% increase in Russian softwood lumber exports in 2018 is despite slowing market conditions in China, and Russia is aggressively displacing many other countries, including Finland (-32%; -550,000 m3); Sweden (-22%; -200,000 m3); and Canada (-15%; -824,000 m3).

However, when we talk about “Russian exports”, that needs to be clarified, as it is not only Russians. While there have been various major capital investments and expansions by Russian-owned sawmill companies in Russia, there has probably been an even bigger increase in Chinese-owned sawmills companies that have moved their small sawmills into Russia. It is estimated that there as many as 500 Chinese companies operating various forest products companies in Russia and many of these are sawmill companies. These Chinese sawmill companies have a direct connection with the Chinese supply chain to either their customers, or their own companies, that sell or use lumber and wood products in China. Consequently, they offer Chinese customers the exact specifications (sizes, grades and lengths) of lumber they need, especially in the expanding furniture industry, and with a quick delivery. And some Chinese companies in Russia are adding dry kilns that allow them to better target higher valued customers and end users in China. These mills are disrupting the traditional supply chain in China at the expense of many other countries, and in some cases, Russian-owned companies.

Some of the report’s analyses examined in the report include:

  • The impact of major capital investments and expansions by Russian-owned companies.
  • The growth of Chinese-owned sawmills companies in Russia.
  • The limits on Russia’s ability to continue increasing timber harvests due to rising log costs, longer procurement distances and inadequate markets for lower quality logs.
  • Impacts of new log export tariffs aimed at stimulating more investment in the Russian Far East.
  • Log and lumber supply, demand and price forecasts to 2030.
  • A global competitiveness analysis on delivered log and lumber costs to China (including all three regions of Russia).

This is WOOD MARKETS/FEA’s fourth special report on Russia (going back to 2004) and is based on regular travel to Russia, conference and speaker presentations in Russia, hosted industry tours in Russia, and more than 30 industry and market consulting assignments for Russian companies. Our team has acquired a deep understanding of where the Russian industry is going, including the key obstacles to overcome as well as the emerging export market opportunities.

This new report on Russia incorporates new field analysis in Siberia and the Russian Far East and further investigations in China around how Russian logs and lumber fit into China and other export markets. Russia’s emerging competitiveness is something not well understood by most Western companies. It will become more important for major exporters to understand Russia’s emerging fit in key markets like China for log exporters, such as from New Zealand, as well as major lumber exporters such as Canada and Europe.

Note – Special pricing available for subscribers to FEA’s October 2018 report, China’s Import Demand for Softwood Logs and Lumber to 2023 – The Changing Supply Chain in China.

 

For further information, please contact:

Russ Taylor                (+1) 604-801-5996      rtaylor@getfea.com
Rocky Goodnow        (+1) 978-496-6337      rgoodnow@getfea.com

For more information on pricing and ordering, please contact:
Lisa Kelly                    (+1) 978-944-2610      lkelly@getfea.com

Visit www.woodmarkets.com/ or www.getfea.com