Investment in Russian forest industry stable, Industry and Trade Ministry monitoring impact of monetary policy - minister

MOSCOW. April 2 (Interfax) - The impact of sanctions on the forest industry has been minimized, partly due to increased supplies to the domestic market, and the Industry and Trade Ministry assesses the situation as stable but is concerned about the potential hindrance to further industry development due to tight monetary policy, Industry and Trade Minister Anton Alikhanov said on Wednesday at a joint meeting of the ministry and the board of the Union of Timber Manufacturers and Exporters.

"The forest industry is successfully implementing an import substitution policy, increasing its market share in Russia. Over the last five years, this share has increased from 82% to 89%. Meanwhile, domestic demand has become a driving force in light of the closure of European markets. Of course, the last three years have been challenging for the forest industry, but we have managed to stabilize the situation and significantly reduce the impact of sanctions, achieving growth in key indicators," the ministry's press service quoted Alikhanov as saying.

Shipments of forest industry products increased 21% in monetary terms in 2024, he said.

The industry faces the task of further increasing the level of wood processing, he said. "Investment remains stable for now. At the same time, we are closely monitoring the impact of monetary policy on the business climate in the sector. It is important for us that difficulties with relatively expensive borrowing resources do not become a limiting factor in the development of the forest industry," he said.

According to Rosstat data, in 2024 the Russian forest industry increased or maintained production of all key product types at the previous year's level, except for fuel pellets. In particular, production of timber amounted to 28.2 million cubic meters (up 0.6%), plywood - 3.425 million cubic meters (up 5.1%), particleboard - 13.9 million cubic meters (up 20.9%), fiberboard - 712 million square meters (up 1.9%), paper and cardboard - 10.658 million tonnes (up 5.4%), and cellulose - 8.538 million tonnes (at the same level as 2023). Pellet production fell 18.1% to 1.099 million tonnes.