Government to overhaul timber industry

Prime Minister Viktor Zubkov has put the spotlight on Russia's timber industry. At a meeting with key players and ministers in the Vologda Region, he's called for a rethink on how the country manages one of its most valuable resources.

Although Russia owns almost a quarter of the world's timber reserves, its role in the industry has decreased significantly since the 1990s.

And despite a number of initiatives it has not showed any signs of improving.

Prime Minister Viktor Zubkov says it's time not only for a new set of initiatives, but for a rethink of the entire timber industry.

“There are still more questions than answers in the areas of industrial timber processing, forest road building, technical equipment, timber trade and personnel training. But one thing is clear – Russia's timber industry needs to be overhauled,” Zubkov said.

Firstly, the government wants to diversify exports away from raw materials to processed production.  The latter is now quite rare in Russia – although there are exceptions.

The ones that exist focus on a range of wood products from plywood to cottages, which are bought by both Russian and foreign consumers.

These products helped to reduce the amount of raw timber exported from 70% in 2000 to 40% in 2006.

There is no shortage of project ideas in this area.  Russia's energy ministry has received more than 200 proposals, from almost 40 regions. It has chosen four of these for implementation in 2008.

Economic development minister Elvira Nabiullina says the industry is crying out for private investment from both foreign and home sources.

“The share of timber industry in both GDP and export is relatively low. That is why we need financing both mid-sized and large projects,” Nabiullina said.

However, environmentalists warn the forest itself should not be forgotten amid talk of further exploitaton.  It's sustainability needs to be safeguarded, they say.