In Q3 2024, revenue from Russian forestry products reached RUB 620 billion (\u20ac6.2 billion), the highest quarterly figure in 2.5 years. This marked a 15% decrease from Q3 2023, but the sector still posted strong year-to-date growth. For the first nine months of 2024, total revenue rose to RUB 1.8 trillion (\u20ac18 billion), a 21% increase compared to the same period in 2023. Net profits followed a similar trend, growing by 6.8% in Q3 2024 to RUB 70 billion (\u20ac700 million), while cumulative profits over nine months reached RUB 172 billion (\u20ac1.72 billion), a 39% increase year-on-year.<\/p>\n
However, the growth in monetary terms outpaced production increases. Output across the industry rose by just 5\u20138% during the first three quarters of 2024, reflecting higher prices and a shift toward value-added products.<\/p>\n
Exports and new markets<\/strong><\/p>\n To compensate for the loss of European markets, Russian exporters are focusing on alternative destinations, including the Middle East. The UAE market for plywood and sawn timber imports alone is valued at $600\u2013700 million annually. For more than two years, Russian forest products have been under sanctions by the European Union. During the same period, there was stagnation in demand for forest products on world markets. From 2021 to 2023, exports of forest products from Russia to world markets decreased from $16.7 billion to $8.8 billion. In general, global international exports of forest products decreased by $64 billion over the year to $482 billion in 2023. Under these conditions, Russian forest exporters continue to try to find new markets and sales channels for their products. One of the global markets that was initially considered as a replacement for the lost European volumes was the countries of the Middle East and the Persian Gulf. The capacity of the United Arab Emirates (UAE) market alone for plywood and sawn timber imports is estimated at $600-700 million per year.<\/p>\n India is emerging as a priority market for Russian forestry exporters. Segezha Group, a leading Russian timber company, has identified India as a key part of its long-term strategy. Despite logistical challenges and steep tariffs\u2014currently 30% for Russian plywood\u2014Segezha plans to increase shipments to India by 50% in 2024 compared to 2022. Currently, only 3% of Russian timber exports are sent to India, with Segezha accounting for just 1%. However, the company aims to diversify its offerings to include wooden house kits, biofuel, and wood pellets. Russia\u2019s lumber exports to India surged fourfold in the first half of 2024, reaching 22,000 m\u00b3, though this represents only 2.2% of India\u2019s total lumber imports.<\/p>\n Other markets, such as Egypt, are also coming into focus. Sveza, a major Russian plywood producer, has announced a trial shipment of over 1,000 m\u00b3 of plywood to Egypt, following a business mission organized under the \"Made in Russia\" program. In the Vologda region, plywood exports nearly tripled in 2024, with shipments reaching 5,600 m\u00b3 by November. Destinations included Iraq, Iran, China, and South Korea, reflecting the region's growing export diversification.<\/p>\n Moderate growth in plywood production<\/strong><\/p>\n After a downward trend that began in March 2024, plywood production in Russia grew steadily in August-October both monthly and annually. Production volumes are expected to increase by 6-8% y\/y and reach 3.5 million m\u00b3 by the end of 2024.<\/p>\n The growth rate of plywood consumption in Russia in 2025 may slow down due to the weakening of the construction sector. However, the efforts of Russian manufacturers to develop existing export routes may give impetus not to reduce, but to moderately increase plywood production volumes in 2025.<\/p>\n If plywood production in Russia follows the inertial scenario, its output in 2025, according to the WhatWood forecast, will increase by +2.9% y\/y to 3.6 million m\u00b3<\/p>","protected":false},"excerpt":{"rendered":" In Q3 2024, revenue from Russian forestry products reached RUB 620 billion (\u20ac6.2 billion), the highest quarterly figure in 2.5 years. This marked a 15% decrease from Q3 2023, but the sector still posted strong year-to-date growth. For the first … Continue reading