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From Carbon to Oxygen: The Economy of a New Era
25 May 2018
16:30—17:45
KEY CONCLUSIONS
Forestry industry keeps forests healthy

Forestry and forest management are closely related. <...> You can say that the forests require cutting, because a healthy forest emits oxygen. When the forest overgrows, it drops out and, accordingly, emits carbon dioxide. That’s why forests need to be cut, when they are mature enough to be a commodity — Ivan Valentik, Head of the Federal Agency for Forestry.

Russia to develop deep processing of wood

Russia needs to develop deep processing by building pulp and paper mills, whereas we need different types of pulp for different sectors of consumption. We discussed how many (mills – Editor’s note.) are needed. We came to the conclusion that there should be at least 3 – 6 maximum – and optimally 4 in the next 5 years, in order to cover the need and provide for deeper processing. But in addition to building pulp and paper mills, we must not forget about using recyclables, meaning waste paper. Over the past 10 years, this (pulp and paper – Editor’s note) industry has seen<...> about 200 billion roubles of investment — Denis Manturov, Minister of Industry and Trade of the Russian Federation.

Export oriented forestry industry calls for high quality of processing

We hear numerous appeals to increase wood processing capacities, because, indeed, Russia has such a huge potential, which should be used. But we must understand that domestic market is not growing as fast. Our consumption, unfortunately, does not demonstrate high growth rates. Therefore, when we talk about new operations, it is basically 90% export oriented. And when it comes to export oriented products, first of all it means<...>highest competitiveness — Zakhar Smushkin, Chairman of the Board of Directors of Ilim Group.

Global demand for forestry products on the rise

We intend to use about 300,000 tons of pulp for clothing and 600,000 tons to produce high quality paper — Xu Xiangchun, Vice General Manager, Metallurgical Corporation of China Ltd..

ISSUES
No locally made pulp and paper equipment in Russia

Virtually all equipment in the pulp and paper industry is imported, just like any wood processing equipment — Zakhar Smushkin, Chairman of the Board of Directors of Ilim Group.

SOLUTIONS
Attracting investments in wood processing

Vnesheconombank makes a significant investment in the forestry industry. It has already invested more than 120 billion roubles, mainly in large wood processing projects and two projects in the pulp and paper industry — Pavel Bilibin, Senior Vice President, Director of Wood Processing Complex, Bank for Development and Foreign Economic Affairs (Vnesheconombank).

In China, due to the fact that cutting forest is already completely banned, huge purchases of pulp from abroad are inevitable. So from the beginning of 2017, we started discussing and planning construction of pulp and paper mills in Russia – in the Far East and around the Amur area. We are negotiating with our partner — Zhou Liqun, General Manager, China Chengtong International Investment Ltd.

Setting things right in forestry industry

Revenues from the forestry sector can be increased by setting things right in this department. This suggests different areas of activity, starting from a different approach to setting rates for forest leases and including, of course, a vigorous fight against illegal loggers — Alexander Uss, Acting Governor of Krasnoyarsk Krai.

Support wooden housing

This topic is related to housing construction. Recently, we’ve been actively developing this segment and we also plan to practically double it due to the use of wooden structures in the construction industry. <...> Starting from this year, we’ve introduced a separate support measure associated with discounted mortgage rates wooden housing construction — Denis Manturov, Minister of Industry and Trade of the Russian Federation.

New requirements to reforestation

We need to gradually introduce requirements for a transition to reforestation with the use of ball-rooted planting stock. But we need to do this gradually, so that the business has time to adapt and starts investing in construction of modern seed breeding centres. <...> This will allow us to cut off those tenants are here not to manage the forest for a long time and to engage in deep processing, but simply to export timber — Ivan Valentik, Head of the Federal Agency for Forestry.

Price adjustment for paper and plastic packaging

We need to take steps to level out the demand for paper and plastic packaging, <...> to make the cost equal for the consumer. In order to do this, <…> we are now talking about an environmental fee that will compensate for this difference — Ali Uzdenov, Senior Vice President of JSFC Sistema.

The material was prepared by the Russian news agency TASS