Alexander Sidorenko, Chairman of Dallesexport Association: “We do not need any support measures, just let us work in peace”

Since the late 2000s, export customs duties on roundwood have been repeatedly raised to reduce exports of Russian unprocessed timber. Thus, the Government of the Russian Federation has increased export customs duties on roundwood up to 25% since 2009. In the summer of 2012, however, Russia joined the WTO, and so roundwood export duties within quotas were reduced to 13-15%. Beyond quotas, export duties on roundwood of Far Eastern species increased from 25% in 2018 to 60% in 2020 and to 80% in 2021. Due to the introduction of the safeguard duties, roundwood exports from the Russian Federation decreased from 43 to 14 million m³ per year between 2007 and 2021. At last, starting from January 1, 2022, the Government of the Russian Federation decided to cancel quotas on coniferous roundwood exports that were supposed to encourage enterprises to create value-added wood processing plants in Russia.

WhatWood interviewed Alexander Sidorenko, Chairman of Dallesexport Association, to find out how the gradually introduced ban on Russian roundwood exports has affected companies of the Far East and how the regional timber industry is feeling under the current pressure of sanctions.  

Please tell us about Dallesexport Association chaired by you. What are its goals and objectives?

The Association was established by leading timber enterprises of the Far East in 1990 to ensure effective operations in foreign markets. The purpose of the Association is to coordinate the actions of timber exporters, to agree on pricing strategies. Besides that, it represents the interests of the enterprises in the Government of the Russian Federation. The Chairman of the Association is elected every two years, I have been holding this position for 15 years already.

How many members are there in the Association? Are these only timber companies?

The Association currently comprises 24 members. Along with timber enterprises, these are shipping companies, banks, owners of railway rolling stock.

What share of the timber industry of the Far East is constituted by the companies that are members of Dallesexport?

The total exports of the members of the Association are over $500 million. This is approximately 75-80% of the woodworking sector and 60% of the harvesting industry of the entire Far East.

You are concurrently the general director of Smena Trading CJSC. What is this company engaged in?

That’s right, I have been working at Smena Trading since 1991. The company was the largest timber exporter of Russia from 2005 to 2007. Back at that time, the company developed and successfully used software that tracked all flows, logistics, markets, trial balances, product ranges, and made forecasts. Today it is called “artificial intelligence”.

Due to the gradually introduced ban on roundwood exports from Russia, Smena Trading transformed from the leading timber exporter of the country into a company put under receivership by order of the court. The company has not been actually operating for three years already.

How has the export of timber products from the Far East changed in 2022 compared to previous years?

In 2007, industrialization of the industry began – both in the Far East and throughout the country – that led to a gradual increase in roundwood export duties followed by a complete ban on their sale abroad starting from January 1, 2022.

Since 2008 and until recently, the enterprises of the Far East had been exporting roundwood with a 25% duty. Then 40%, 60% and 80% duties were gradually introduced. Today, the timber industry of the Far East actually equals to about 25-28% of the industry that existed in 2007.

Read more: Russian Timber Journal 07-2022.

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