Oleg Fokin, Director for Timber Export at Technonicol: “Now is a good time to invest in the woodworking industry”

Technonicol is an example of how large Russian companies are trying to diversify their businesses by investing in timber industry assets. In January 2023, the group purchased four woodworking enterprises in different Russian regions for a total of 1.6 billion rubles and later, to crown it all, a sawmill in Belarus. The prospects of timber industry development, production expansion, raw material supplies, sales markets, wooden housing construction, problems with wood pellets sales, building new supply chains, and transportation subsidies—these were the subjects we discussed with Oleg Fokin, Director for Timber Export at Technonicol.

Technonicol was founded over 30 years ago and has become one of the largest Russian producers of insulation and roofing materials. Why has the company decided to invest in woodworking now?

Technonicol has confidently maintained the leading position in the construction industry for over 30 years—both in the domestic market and outside the country. We are striving to become a vertically integrated producer not only of insulation and other construction materials but also of timber products, with a full cycle of timber harvesting and value-added wood processing of raw materials.

We see a need to provide markets with structural and finishing timber materials, such as dried sawn timber, moldings, glued laminated beams, and timber.

As the positions of some industry players weaken, we believe now is a good time to invest in the woodworking industry that will grow and scale up in the nearest future.

Over 30 years, Technonicol has come a long way from construction materials to entire systems. Our next developmental goal is comprehensive solutions that will make it possible to offer to the end user the construction of a private house from scratch and almost entirely from materials made in-house, so we cannot do without woodworking products.

Are you going to upgrade your purchased production lines?

We have begun a two-year investment program; scheduled replacement of equipment is already ongoing at new assets to expand the range of our products and achieve higher value-added wood processing.

Is the company planning to purchase any more timber industry assets in the nearest future? If so, what is the tentative investment value?

We are currently negotiating a purchase of several potential woodworking assets. In our opinion, now is a good time to enter the woodworking sector after foreign companies have left it.

So we see a good potential of this industry’s development in the future. We are planning to invest around $1 billion in new projects within the woodworking sector over five years.

Read more in Russian Timber Journal 09-2023.