Foreign investments into fixed capital of Russian timber companies reduce

Investments from abroad into the Russian forest-based industries are reducing, as the analytic service of WhatWood agency reported. In particular, the volume of foreign investments into the woodworking sector in the first quarter of 2014 fell by 42% year-on-year down to 155 million roubles ($4.4 million). In relation to the fourth quarter of 2013, the decrease amounted to 41%. Also, the number of Russian regions where the timber industry attracts foreign investments decreased dramatically. In the first quarter, there were only three regions left: Khabarovsk, Ivanovo and Tatarstan.

In the Khabarovsk region, it is most probably the investments into the enterprises of Malaysian group Rimbunan Hijau, in the Ivanovo region – into Shuya mill of Austria’s Egger, while in Tatarstan – into the investment project of Kastamonu Entegre (Turkey), which completes the construction of panel mill in the Alabuga special economic zone.

Generally tense geo-political situation creates high risks for investors, and many companies are reconsidering their decision to invest into modernization of existing assets or freeze investments in the construction of new facilities.