Bumprom association: Ural region is ideal for new pulpmills

The internal market in Russia has a huge potential for development of the pulp and paper industry, as stated in an interview to “Russian Forestry News” by head of the analytic department of Bumprom association Yuri Lakhtikov. This is mostly about consumer products with high added value, such as sanitary and hygienic products, packaging, and wallpaper, which until recently could compete within the country with imported analogues thanks to the defensive duties. After Russia’s WTO accession, there is duty reduction process, which affects the domestic producers.

Large companies stand the situation on the domestic market even after WTO accession. “As a rule, these companies belong to multinational corporations that invest considerable funds in the modernization and have great experience on different markets, there are not newcomers to the competition and are able to diversify and adapt production quickly to Russian realities. Another thing is the small enterprises with obsolete and physically worn-out equipment. I must say that such facilities are abundant across the country”, noted Lakhtikov.

“For some types of high-quality products, we lag several times behind Europe and 1.5 times compared to the average world level. High-quality pulp and paper product consumption per capita in Russia can be compared to Brazil and other developing countries of the South American continent. In other words, the potential of the Russian market is huge”, the analyst concluded.

Lakhtikov believes that the Ural region is ideal for establishment of new facilities. This region is far enough from the European market, which gives competitive advantages to Russian companies in terms of logistics: “It is not by chance that in the recent years there is a noticeable revival of production of modern pulp and paper products in the Urals”.

As an example of government support that would benefit everyone, Lakhtikov considers the projects of developing the transportation infrastructure. “Despite the fact that the business is probably for ten years already trying to persuade the government to pay attention to the forest roads, nothing changes; this is not to mention the acute matter of forest management or predatory bank loans. (…) It is high time for the state to look at the industry science, which is totally kept down,” notes Lakhtikov. “I can’t understand why we don’t use the global experience and are addicted to creating new strategies, which are obviously not feasible and are far from reality. There is a feeling that some temporary people are sitting in the management bodies who simply have no desire to do something useful for the industry”.