13 Jul 2023 14:42

Russian Far East Development Ministry proposes to expand support for timber industry companies in Far East

VLADIVOSTOK. July 13 (Interfax) - A reduction in production in the Russian Far East timber industry complex has led to the need for new state support measures, Anatoly Bobrakov, Russian Deputy Minister for Far East and Arctic Development, said.

During an off-site meeting of the Council for the Development of the Forest Complex of the Russian Federation in Vladivostok, he proposed a number of new measures, as well the prolongation of existing solutions.

"The first is the suspension of customs duty collection on coniferous trees with a moisture content above 22%. China and companies buying Far Eastern sawn timber cannot offer a price that compensates costs incurred by loggers for drying these materials," Bobrakov said.

He also proposes to extend the possibility of exporting lumber via the Primorsky Territory road checkpoint after January 1, 2024; to extend the prioritization of the transportation of timber cargo by rail to round timber that is allowed for export; and to allow the export of materials from Mongolian oak and Manchurian ash with the introduction of appropriate changes to regulator Rosprirodnadzor's administrative regulations.

"The adoption of these measures under current conditions will also provide support to our enterprises and increase logging so it can reach a positive trend," the Deputy Minister said. .

Enterprises in the Far Eastern Federal District have access to support measures such as the provision of forest plots without competition, with 18 projects underway, and a total planned investment of 48 billion rubles, 43 billion of which have already been invested. There are also tax and administrative preferences attached to the Free Port of Vladivostok, a preferential lending program through the Industrial Development Fund, and compensation for transportation costs related to export, he said.

"Operational indicators for five months of this year show a drop in procurement and production. Procurement decreased 18%, and we see a stronger drop in a number of positions. We understand why this is happening. We see that the Japanese market for veneer and wood chips has closed. As for our neighbor, China, there has been a drop in a separate nomenclature produced in the Far Eastern Federal District. At the same time, manufacturers are faced with import substitution for those technologies that were imported from Europe and other unfriendly countries. There are questions about the raw material base, and the railroad transportation of materials," Bobrakov said, explaining the need for new state support measures.

Earlier it was reported that a number of forestry enterprises in the Far East had proposed new measures to support the industry, including providing a deferral of payment under forest lease agreements from 2022 to 2024 in excess of the minimum rent; postponing the timing of forestry work from 2023 to other years; liberalizing the export of round raw timber from the Far East without distinctions by species, grades and diameters (not all forest users agreed with this proposal); and the cancellation of the export duty for the Far East on sawn timber of natural moisture.

In June, because of a decrease in production, the government of the Khabarovsk Territory took a number of measures aimed at stabilizing the operations of timber industry enterprises in the region, including installment payments under forest lease agreements.