Russia wants to promote Scandinavian forest management model

Luke researcher Sari Karvinen:

Russia wants to promote Scandinavian forest management model

In August 2006, Kesla established its own export company OOO Kesla in Russia. As early as 2009, Kesla announced the winding down of the subsidiary’s operational activities. It was already known in advance that the establishment and start-up of a subsidiary in Russia would be a challenging and time-consuming operation. After the wind-down, Kesla continued sales in Russia through local dealers and partners. The steering and support functions were carried out from Finland.

Luke researcher Sari Karvinen, who has been studying Russian forestry for 15 years, estimates that there has been a significant change in Russian forestry over the past couple of years. The debate on improving the efficiency of forestry, which began as early as the 1960s, has finally materialised in a reform of the rules on forest use. Russia wants to promote the transition to the Scandinavian forest management model and to increase the amount of improvement cutting. Russia’s political will appears to be a great opportunity for Finnish forest machine technology. The annual logging volumes of the country of massive forest resources are telling. While in 2008 the logging volume in Russia was about 180 million m3, in 2014 the volume had already risen to 203 million m3. In 2018, 239 million m3 of wood were felled in Russia. At the moment, only 5% of the wood comes from improvement cutting. In autumn 2018, Amkodor announced its intention to start the production of accessories and components for forest machines in Petrozavodsk. Amkodor had acquired the Onega tractor factory, which used to be Petrozavodsk’s most important industrial plant before its bankruptcy. Amkodor reportedly had plans to settle in Yekaterinburg on the Urals, but Petrozavodsk eventually drew the long straw. The city’s strengths are a university with a focus on forest technology and good logistic connections.

On 17 September 2018, Natural Resources Institute Finland (Luke) released the news:

Amkodor announces the establishment of the Amkodor-Onego company in Karelia, within the framework of which it will start the production of accessories and components for forest machines, such as booms and cutting equipment. This can reduce dependence on foreign suppliers and increase the share of local production. The production volume of forest machines may rise to 1,000 units per year, which will give the company a leading position in the Russian forest machines market. The project has the support of both regional and federal authorities. The company is eligible for benefits in terms of credits, taxation and energy tariffs, and the state may compensate for part of the purchase of machinery and the costs of construction and research. The investment is estimated at between $250 million and $300 million.

In summer 2019, Amkodor announced that the Ministry of Industry and Trade of Russia, the Government of the Republic of Karelia and Amkodor-Onego had signed a 10-year investment agreement, which will grant tax relief to new forest machines production, among other things. Amkodor-Onego said that it would invest some €200 million in the machines production of the Onego tractor plant. The aim is to produce at least a thousand forest machines a year. Production is set to start in 2030.