Purpose of the Survey

A six-day survey of Russian Far East and Siberia forest industry companies was organized by China Forest and Trade Network (CFTN) in July. The Chinese investigation group included CFTN of WWF, Guangdong Yingbin Wood Industry Co., Ltd, Dongning Jixin Wood Industry Co., Ltd and Xuzhou Fuxiang Wood Co., Ltd. The purpose of this survey was to improve the connection between CFTN and members of the Russia Forest Trade Network; further boost sustainable forest management, legal and FSC certified forest products trade; and to assist members of CFTN to purchase legally harvested Russian Birch. This survey could help companies to better understand the situation concerning wood resources in Russia and the supply situation in the future, as well as collecting useful information on Russian forest management and wood export policies. At the same time, the investigation group carried out extensive exchanges on Sino-Russia wood trade cooperation. 

Profile of investigation group

China Forest and Trade Network has 18 member companies, and most of them are already or plan to purchase Russian wood, such as Birch and Ash. Supported by the Global Forest and Trade Network, this survey is designed to promote the legal trade in Russian wood and to improve accessibility to FSC certified wood from Russia.

Dongning Jixin Wood Industry Co., Ltd is a proponent of CFTN. Its main products include glued-laminated beams, furniture and lumber. All of Jixin’s wood products are imported from Russia. To solve the problem of shortage of wood materials, Jixin has already set up lumber and furniture factories in Russia. The participation of Jixin in this survey was to seek more partners in Russia; purchase legal wood; and to lease forest land in Irkutsk.

Guangdong Yingbin Wood Industry Co., Ltd is a member company of CFTN. As the biggest wood flooring manufacturer in China, the Yingbin Group needs more Russian wood materials. The recent visit to Russia could help Nature establish partnerships with legal suppliers offering FSC forest certified wood materials.

Xuzhou Fuxiang Wood Co., Ltd is also a member company of CFTN. Their main business is plywood and flooring substrate. As the biggest plywood manufacturer in China, Fuxiang hoped to learn more about Russian wood resources, as well as establishing cooperation with suppliers offering FSC forest certified wood materials.

Excellent Conditions for Investment in Russia

Forest Resources Russia is rich in forest resources. The forest coverage is about 776.1 million ha., accounting for 22% of the world’s total. Annual allowable cut amounts to 570.7 million m3. Russia forests are divided into four major geographic regions: European Russia, Western Siberia, Eastern Siberia, and the Russian Far East.

As the main destination of this survey, Irkutsk Oblast has abundant forest resources. Currently, the total forest area in Irkutsk amounts to 7.0 million ha. Meanwhile, the forest cover area was amounts to 6.18 million ha., a forest cover rate of 82%. Stock volume of forest was 9.1 billion m2 in Irkutsk Oblast, ranking third in Russia. The annual growth increment in Irkutsk Oblast is 9.3 million m3. But the annual actual cut hit just 200 million m3 accounting for 25% of the total annual allowable cut. This extensive forest resource creates great conditions for investment in Russian forest products.

Companies There are more than 200 companies in Irkutsk Oblast engaged in the wood industry. They own amount of forest resources and are willing to cooperate with Chinese companies. In particular, companies such as SIBERIAN SILVER PINE, Baikal and Sibregion Forest Products Company represent major potential partners or cooperators with Chinese companies.

Siberian Silver Pine, founded in 2004, has five factories in Irkutsk. Their main businesses includes lumber and blockboard manufacture. Products are mainly distributed to the US, Japan, Europe and within Russia. SIBERIAN SILVER PINE has access to a plentiful forest resource and in particular to a significant volume of Birch forest. To further boost the development of the company, SIBERIAN SILVER PINE wishes to cooperate with Chinese companies to develop the Birch resources together. Excellent cooperative conditions were extremely attractive to several Chinese companies. Preparing for further cooperation, Jixin Wood Industry Co., Ltd showed great interest and planned to organize a more detailed investigation and survey of it’s the Russian company’s forest resources.

Baikal was founded in 2000, with a production site area of 70 ha. Currently, the company has 200 employees and 79,909 ha. forest land under its management, all of which was FSC certified. The annual cut of Baikal was 170,000 m3, including 50,000 m3 of Birch. Cooperation between Baikal and Chinese companies will provide FSC certified wood material to Chinese companies, and assist them in solving the wood shortage problem.

Sibregion Forest Products Company is the largest forest product company in the Bratsk region. Their main products are logs and lumber, including Siberian Pine and Larch lumber, Birch and Poplar logs. The total output of Birch and Poplar amounted to 100,000 m3, split equally between the two species. Currently, Sibregion Forest Products Company is seeking partners to found joint venture companies.

Policy Support Russia has established good policy conditions for developing its forest resources and for investing in wood processing. The implementation of the New Forest Law in Russia in 2008 further improves investment opportunities for Chinese companies in Russia. Russia has ample forest resources and several competitive advantages.