“Plywood from birch is perceived as a luxury product”. Interview of Anatoly Frishman, General Director of SVEZA Group

In constantly changing market conditions, it can be difficult to remain a leader, to increase production capacity and to invest in modern technologies and equipment. How SVEZA Group manages to lead, is the question the correspondent of our agency asked the General Director of SVEZA, Anatoly Frishman.

— Anatoly, please tell us, how much do you think the plywood market, including large scale, has grown in Russia in comparison with the world market?

— Russia accounts for the largest share of world production of birch plywood. While domestic companies remain export-oriented. As far as I know, the level of consumption of plywood per capita in Russia is less than the level of consumption of plywood per capita in Europe. Therefore, domestic consumption is not always 100% guaranteed.

In my opinion, for the Russian plywood enterprises, one of the development areas can be called, firstly, the improvement of the product range being produced and, secondly, the development of service and distribution systems.

— How do you evaluate the sales volumes of plywood which have been produced by your company’s mills in 2017?

— In 2017, SVEZA mills produced 980 thousand m³ of plywood. The target figure for 2018 is over 1 million m³ of plywood. Its increase is due to the implementation of new investment projects, the integration of Tyumen Plywood Mill (now SVEZA Tyumen) into our company, and the elimination of a shortage of raw materials and possible downtime of equipment.

Please note that last year the timber harvesting companies were laid back by the weather — the availability of raw materials was limited. In addition, there were difficulties with the purchase of timber due to the increased influence of exports.

— You talked about the increase in exports of wood raw materials. In your opinion, what is the optimal time for introducing a quota for the export of birch plywood logs?

— In my opinion, it is a period of one or two years. Furthermore, it is necessary to assess the protection of the market. It should be analyzed whether Russian manufacturers are protected, whether timber sales will be profitable in the country and what measures should be taken to ensure that the state receives the maximum value added from the sale of products on the domestic market.

— Your company has repeatedly participated in major foreign exhibitions. What do you think are the changes that have taken place in the world market over the past five years?

— Plywood has a wide range of applications, so we follow the development of many industries. For our company, furniture and construction are among the main segments of plywood consumption. We pay attention to recent developments in other segments, in such areas as the manufacture of toys, interior decoration, flooring.

Basically, the speed with which changes occur increases. New types of products began to appear on the market faster, new technologies, equipment and materials to be presented. I will give an example. The technology for 3D printing of buildings has been in existence for not one year, but it is not yet on an industrial scale. But we are faced with the fact that 3D printing is actively growing, which will definitely affect the amount of consumption of plywood used in the manufacture of flooring. It can also be noted that changes are also observed in the wood-based panels industry: the quality of consumption of products increases, service improves.

— In May 2017, SVEZA became the first Russian company, whose products were seen by the participants of the ExpoConstruction & ExpoDesign exhibition in Bogotá. Do consumers’ preferences differ in Latin America and Asia? If so, what are the main differences?

— Consumers in Latin America and Asia are accustomed to using plywood from poplar or eucalyptus wood, or softwood. Plywood from birch is perceived as a luxury product.

For Latin American and Asian market, birch plywood is more considered as a commodity for construction. Russian plywood from birch is much more appreciated and is highly demanded in construction. The SVEZA plywood brand has improved performance characteristics: high strength, wear resistance. In the near future, we plan to take our place in the construction market, where plywood is used for formwork. While for us this is one of the main areas of development. We need time to overtake Asian and Latin American markets, to prove to consumers the high quality of our products.

— Are there any differences in the way your company’s mills operate in the Kostroma region, in comparison with the operation of mills in other regions?

— There are specific features associated with process flow schemes, with the product range being produced. The level of automation differs from one mill to another. But now we are working on leveling. If we implement something on one site, we immediately spread the best practices to all the mills. The “Think tank” and the 5S system are used everywhere. The 5S system is now at different stages of implementation, depending on the mill.

The level of how the equipment is upgraded and the degree of their modernization are not the same. While some of our mills continue to operate older types of equipment, however, there are no huge gaps. The level of producibility and technicality of our productions is more or less similar. Replacement for the sake of replacement is meaningless. There should be profitability on replacing or upgrading equipment.

— What brands, sizes and grade of plywood, produced in SVEZA company’s mills, are on high demand? Why?

— Of course, the production of niche products brings more profit. But their release imposes certain obligations. Increasing requirements not only to the quality of the product itself, but also to the quality of service. There may be difficulties in the manufacturing of the product, the selection of raw materials, additional adjustment of the equipment is required. In some cases, it can occur more often, which leads to a decrease in equipment productivity and a reduction in yield volumes. But this is compensated ….

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