The Forest Industry in the Structure of Russia's Economy

Russia holds 20% of the world's forest resources, ranking second after Brazil and surpassing the United States by twofold. Despite this, Russia's share in global timber harvesting does not exceed 3%, while Canada holds 17.3% of the market and the U.S. 12.7%. In 2020, the total forest area in Russia was 883 million hectares, with the forest-covered area amounting to 776.1 million hectares, or 45% of the country's territory. The timber stock was estimated at 82.1 billion cubic meters. Coniferous species (pine, cedar, spruce, larch, fir) dominate among forest-forming trees, while the share of softwood (birch, aspen, linden) and hardwood (oak, beech, ash, maple) is relatively small.

The forest industry ranks seventh in terms of production volume and fifth in export volume within Russia's industrial production structure. At the same time, the forest sector plays a crucial role in the economy of the European North. In the vast forests of Eastern and Western Siberia and the Far East, this industry is overshadowed by the leaders — the fuel industry and non-ferrous metallurgy.

Currently, domestic timber harvesting is growing, but the figures remain below the 1990 level, when about 300 million cubic meters of timber were harvested annually. According to industry experts, industrial logging covers no more than 30% of the allowable cut volume, leaving significant room for the development of wood processing.

Main Timber Harvesting Regions:

• Northwest Russia (Arkhangelsk, Vologda, Leningrad regions, Republics of Karelia and Komi). This area has a developed transport infrastructure, including the seaports of Murmansk and Arkhangelsk, floatable rivers, and logging roads.
• Siberia (Irkutsk region, Krasnoyarsk Krai). Timber is floated along the Yenisei River to the Igarka port and then transported via the Trans-Siberian Railway to the European part of the country.
• Far East (Khabarovsk Krai) contains a significant portion of mature and overmature forests (80–100 years old). Proximity to Asian markets creates export opportunities.

Wood processing enterprises are located in Karelia, the Komi Republic, Arkhangelsk, Leningrad, Kaluga, Moscow, and Irkutsk regions, as well as the Udmurt Republic. Pulp and paper mills are situated in Arkhangelsk, Kaliningrad, Perm, Irkutsk, and Leningrad regions, and the Republics of Karelia and Komi. Forest chemical plants are concentrated in the Urals and the northwest.

Several major companies operate in Russia's forest industry:

Ilim Group traces its history back to 1953, with the construction of the Kotlas Pulp and Paper Mill. Today, Ilim is the undisputed industry leader in Russia, operating three major pulp and paper mills in Bratsk, Ust-Ilimsk, and Koryazhma, two corrugated packaging plants in Kommunar and Dmitrov, and the Sibgiprobum design institute in Irkutsk. The company leases 7.9 million hectares of land for timber harvesting, conducts annual reforestation, and produces 77% of Russia's market pulp, 25% of paper, 16% of cardboard, and 3% of corrugated packaging.

Segezha Group is a forest industry holding comprising a design institute, logging, wood processing, pulp and paper enterprises, and paper packaging plants located in the Republic of Karelia, Krasnoyarsk Krai, and the Kirov, Vologda, Rostov, Kostroma, and Arkhangelsk regions. The company leases 15.7 million hectares for timber harvesting. It leads Russia in the production of softwood lumber and glued laminated timber house kits, ranks fifth globally in large-format birch plywood production, and second in Europe for paper sack manufacturing.

Arkhangelsk Pulp and Paper Mill (APPM), launched in 1940, is one of Russia's largest producers of cardboard and pulp. Its subsidiaries manufacture high-quality corrugated packaging, paper bags, and sanitary products.

Titan Group specializes in timber harvesting and processing. Its 11 logging divisions operate in the Vologda and Arkhangelsk regions and the Komi Republic. Lesozavod 25, part of Titan Group, produces softwood lumber and pellets — an environmentally friendly biofuel.

Sveza began with the Ust-Izhora and Veliky Ustyug plywood mills in 1910. Today, it is Russia's largest plywood producer, supplying to over 80 countries. Sveza employs modern equipment and technologies to minimize environmental impact.

The quality of wood products has improved due to advanced processing methods, while production costs have decreased. In recent years, more products have been derived per cubic meter of timber, and waste volumes have declined. The industry's geography has also shifted: while timber harvesting was once concentrated in developed countries, developing nations now supply raw materials, even if they do not produce finished goods.

Currently, Russia harvests over 180 million cubic meters of timber, accounting for just 6% of the global total. With efficient use of the allowable cut area, this figure could reach 17–18%. Russia's share in global timber exports is only 2%, and export revenues are lower than in developed countries due to the significant export of unprocessed roundwood (35% of Russia's forest exports) and limited wood processing (23% sawn timber). Meanwhile, deeply processed products are imported.

The forest industry supplies raw materials to the construction sector, providing lumber, beams, boards, plywood, and other materials essential for building homes and structures. It also serves the chemical industry, as wood is a source material for products like pulp, used in paper, cardboard packaging, and textile fibers (viscose). Additionally, the sector provides forest fruits, seeds, juices, and oils for medicinal use.

The forest industry also influences tourism, particularly ecotourism, which involves visiting relatively untouched natural areas. Tourists often stay in small wooden cabins produced by forest industry enterprises.

Interindustry Links of Russia's Wood Processing Industry (OKVED Code 16):

Figure 1 illustrates the share of OKVED Code 16 products consumed by other sectors. The largest share (44%) goes to construction, including wooden components like beams, rafters, and prefabricated structures, as well as doors, windows, and frames. Another 13% is used for secondary wood processing, and the same share (13%) goes to furniture production. Real estate services account for 12%, while the remaining 18% is distributed among transport, tourism, pulp and paper, agriculture, and other sectors.

Figure 2 shows the contributions of other sectors to the production of OKVED Code 16 products. Forestry products are the primary input, but wholesale trade services play a surprisingly large role, highlighting intermediary activities and speculative profits in timber trade. Chemical products, electricity, and machinery follow, along with a range of service providers supporting wood processing.

Sources

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