The Russian sawmill sector can be divided into two distinct fragments – one, the large export-oriented companies and two, smaller companies that rely on the domestic market. The industry, however, is going through a serious pressure period, all thanks to inflation and several other factors, that has ultimately amounted to the high prices of the delivered logs along with the requirement to invest in new equipment and infrastructure to maintain competitiveness.
If we look at the past, the production of Russian sawn wood has almost doubled since the early 2000s. The industry development and overall level of production of the same are typically driven by the exports. However, the domestic demand and production for sawn softwood is expected to be higher than what the official stats are now able to estimate.
Now, the Russian sawmilling industry is still extremely fragmented as it is characterized by smaller mills that have an annual capacity of hardly 100,000 cubic meters. Most of these mills (small and medium-sized ones) focus on serving the domestic market and local clients. This means that a large share of these mills will be missing from the production statistics, officially resulting in a misleading supply and demand scale in the country. However, there is still a chunk of sawmills (the larger ones) that focus only on the export markets.
The 1H 2021 railway timber transportation had experienced an unexpected growth due to the increase in the demand for pulp, timber, and paper products for both domestic and external markets. The total volume of sawn timber and timber loading, including the transportation container, has increased by around 3%, in the specified period of around 22.6m tons every year.
The driver for the growth in the domestic traffic, at around 6% to 10.6m tons, accounted for the unprocessed wood transportation for the Russian processing company requirements. Around 10.2m tons were transported, with 7% year-on-year and that included +4% to 2.9m tons sawlogs, +24% to 2m tons veneer, +42% to 1.4m tons timber for production of wood-based panels.
China, in the meanwhile, has become the primary export destination for Russian sawn wood. So much so that its share of all exports has risen from just 3% to 60% in the past few years. The exports from Russian sawmills to Central Asia have also increased, however, at a modest pace. If we consider the Middle East, the share of these core export markets totals at around 80% of the total volume of export. The low-quality requirements of these markets have enabled the sawmills to meet the demand without changing anything. With the help of a supply chain automation platform, you can check out the price range of such logs and choose a timber supplier that suits you best.
Similar to any other industry, costs and productivity form the base of the sawmilling business as well. Some of the major factors that influence the cost in the Russian sawmill industry include:
The demand for construction wood in high rises is increasing globally, and so is the popularity of Russian sawmills. The investment in market and product research along with expanded marketing and sales efforts is sure to drive the Russian sawmilling industry to its maximum value potential by increasing profitability and production. With the help of a B2B supply chain automation digital toolkit like Timber Exchange, you can keep a track of the various suppliers including Swedish sawmills and the best price offered by them. Should you be interested in the subject, feel free to get in touch with https://www.timber.exchange.