Vitaly Demidenko, Sales Director at Sveza: “The period when the demand for birch plywood surpassed the supply in the available markets is over. The approach to sales changed too.”

WhatWood agency talked to Vitaly Demidenko, Sales Director at Sveza, to learn how the world’s largest birch plywood producer has rebuilt its product sales processes almost a year after the European market became virtually unavailable.

The group includes seven plants located from Saint Petersburg to Tyumen with a total production capacity of almost 1.5 million m³ of wood-based panels per year. How difficult was it to coordinate product sales across such a large area and with such great volumes?

First of all, I would like to clarify that the production capacity of 1.5 million m³ is the maximum capacity for key product types (plywood and particleboard) taking into account the comprehensive project on upgrading and expanding the plant in the Vologda Region, which is currently at the implementation stage. Startup and commissioning of the installed equipment is now in progress; the project is 90% complete.

Coordinating the sales of products from seven plants located across six Russian regions is certainly challenging. However, our company has been developing in the market for 26 years. Over this time, we were able to streamline our operations so that the processes on-site and at the headquarters were well orchestrated. Production venues and the sales work quite efficiently, as an integral whole.

In summer 2022, after the European sales market was virtually closed, Anatoly Frishman, CEO at Sveza, said that plywood production facilities at your plants were underutilized by 60–80%. Has your production output fully recovered by now?

Sveza was able to achieve a positive trend due to its efforts to maximize the sales in the available markets, find new sales destinations, and sign contracts with new clients, as well as the government support, specifically transportation subsidies, insurance of payments, and support of exhibition activities.

We have considerably increased the output compared to the level about a year ago. However, our facilities are not 100% utilized yet, just like those of other plywood enterprises in the country. The situation as a whole remains challenging; the company needs more time to return to the pre-2022 performance, as does almost the entire Russian timber industry.

Before the European embargo, Sveza was shipping most of its export to the EU market. How did the company adapt to the new reality—i.e., solved the problem of finding new sales markets and building new logistics chains?

It wasn’t easy at first, but we were able to adjust our development strategy promptly by shifting the focus to the available markets. Its implementation was facilitated by the fact that our company has historically pursued a diversification policy in relation to both the product portfolio and the geography.

Sveza continued to enhance its positions in the domestic market that has always been among our priorities. Besides, our company is expanding its presence in countries unaffected by restrictions. Our products are shipped to markets in the CIS, Asia, Africa, and Latin America via new logistics routes that we also built quite quickly. At the same time, I should note that there is still a lot to be done.

Read more in Russian Timber Journal 06-2023.