Russian producers of wood-based panels cannot export their products by transit via Kazakhstan

The Association of Furniture and Woodworking Enterprises of Russia told Rossiyskaya Gazeta about the de-facto discontinued transit cargo traffic of panel products via Kazakhstan. The Association emphasizes that this situation “threatens subsequent operation of Russian woodworking companies” as panel producers are risking to lose the only currently available export destination where they used to sell up to 40% of all their products. This is the reason why a series of companies, including major ones, does not exclude the possibility of suspending their production by the end of this October.

“Ex-Soviet Central Asia—Uzbekistan, Tajikistan, Turkmenistan, Kazakhstan—are currently market No. 1 for the Russian export. Domestic producers of panel products sell up to 40% of their output there. However, this destination was de-facto blocked over the past month, starting from the first days of September 2023. Kazakhstan Railways stopped the transit of Russian cargos southward. Unless a solution is found within the next few weeks, the Russian woodworking industry may cease to exist,” Timur Irtuganov, Director General at the Association of Furniture and Woodworking Enterprises of Russia, commented the situation. He also noted that the current circumstances affect not just this industry: “Everything is blocked along the route via Kazakhstan: railcars with petroleum products and grain are stopped, containers are idling.”

The problem was also recognized by major Russian producers of wood-based panels. According to Dmitry Leontyev, Director for Planning and Logistics at Sveza Group, the problems with shipping cargo by railway via Kazakhstan began in late August. The company is currently waiting for approval of permitting documents for transportation of 69 railcars with finished goods. Cherepovets Plywood and Furniture Plant shared that over the past month, they were unable to export 40 railcars of panel products, or about 4,000 m³ of panels and plywood. “The point is, Kazakhstan is simply not approving documents for transit cargo traffic. So you can ship your product to Kazakhstan itself, but not further, to Kyrgyzstan, Uzbekistan, or Tajikistan. It is not clear what the problem is. The throughput capacity should be sufficient. This probably has to do with the situation in Kazakhstan itself,” Alexander Kotryumin, Head of Shipping Department at Cherepovets Plywood and Furniture Plant, says.

According to Alexander Gibezh, Director for Development at Plitny Mir (“Panel World”), the situation with product export, which was already unfavorable from 2022, has now turned into a deadlock. “Ex-Soviet Central Asia is the only remaining foreign market for us from 2022. But since Kazakhstan imposed restrictions on railway transit traffic, we have not been able to ship our products to customers from Uzbekistan and farther-away places. The situation is close to critical,” Mr. Gibezh emphasized.