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Status of Productive Industry
Timber Industry Complex
Timber industry complex defines the general state of economy of the republic in many respects, as its share in the volume of industrial output makes 40.9%. At it is borrowed More than one half of those who work in the industrial sphere work at the timber industry complex enterprises.
According to the policy and strategy of the Government of the Republic of Karelia in the field of forest exploitation and development of the timber industry complex the basic measures to be undertaken to increase volumes of deep processing of wood in the territory of the republic, loading operating capacities and construction of new woodworking enterprises, transfer of wood plots to effective forest exploitators in long-term rent on the basis of long-term business-planning have ben defined.
Within the framework of timber industry complex development strategy constant cooperation with the largest enterprises of the complex on increase of efficiency of use of their capacities and growth of tax deductions is being accomplished. The Government of the RK in 2004 continues realization of General cooperation agreements with Pitkaranta Pulp Mill, Inc., Kondopoga, Inc., Segezhsky Pulp and Paper Mill, Inc., and has completed an agreement with Zapkarelles Close corporation. In accordance with these agreements business-plans for development of these enterprises up to 2010 have been prepared aimed at increase in volume of manufacture, share of the added cost, and profitability.
On results of 2004 all three branches of Timber Industry Complex have increased volumes of manufacture in comparison with 2003: the index of physical volume as a whole in Timber Industry Complex (on a full circle of enterprises) has made 110.3% to 2003, produced commodity output cost has made 21 billion rbls. (120%).
In logging Industry volume of tree hauling in 2004 (on a full circle of enterprises) has made 6,7 million cubic meters (110.4% to the level of 2003), the index of physical volume is 110.8%, produced commodity output cost has made 5,5 billion rbls. (139.3%).
Growth of volumes of manufacture in the branch is basically provided due to:
- сontinuing transition of the enterprises on assortment logging that has allowed 15.7% increase of merchantable wood output;
- 7% increase in volumes of logging, including due to intermediate harvests.
Growth of average contract costs of exported production for round timber products for all kinds of conditions of deliveries has also influenced increase in volumes of commodity output.
To increase forest exploitation efficiency transfer of wood for long-term rent continues. By the beginning of 2005 wood sites of annual forest exploitation volume of 6.2 million cubic meters (70% of estimated wood-cutting area) for rent on a competitive basis.
Fourty six forest exploitators became tenants acoording to new conditions. Wood rent will allow proprietors of enterprises to define prospects of development, invest in construction of roads, involve remote sites of wood in operation.
Within the framework of strategic orientation towards increase in volumes of deep processing of wood steps aimed at development of sawing and woodworking industries in the republic have been taken. In 2004 by the enterprises of woodworking industriy produced commodity output to the sum 3027 million rbls. (103.4% to the level of 2003). Growth of volumes is provided due to 2.5% increase in volumes of manufacture of saw-timbers, and 20.4% growth in manufacture of wood-shaving plates.
All large timber mills of the republic, except for Segezhsky Saw-Woodworking Mill, Inc., have increased sawing volumes considerably. Transition of Ilyinsky Saw-Mill, Inc., on a two-shift operating mode has allowed to increase volumes of manufacture of saw-timbers 1.6 times. Sawing volumes at Kemsky Saw-Woodworking Mill, Ltd., have grown more than twice.
Modernization of existing and construction of new woodworking enterprises (Medvezhiegorsky Timber Industry Enterprise, Ltd., Muezersky Timber Industry Enterprise, Inc., Swedwood-Karelia, Inc., Letnerechensky Saw-Woodworking Mill, Ltd., etc.) proceeds.
Manufacture of furniture (chairs, cases, sofa beds, beds) has decreased, since April of 2004 no skis was made, as production has been stopped due to of lack of turnover means and reduction of demand during the spring-and-summer period. Bumex, Ltd., reconstructing and expanding furniture manufacture, reoriented manufacture of plywood for own consumption, having 16% lowered volumes of a commodity output to 2003.
During 2004 enterprise pulp and paper industry have improved their work. Commodity output has increased up to 12 454 million rbls. (17.5%), the index of physical volume has made 111.9%. Manufacture of paper has increased 13.6%, and on commodity cellulose manufacture has grown 11.1% having made 862,4 thousand tons and 89,8 thousand tons accordingly.
Due to reconstruction of paper-making machine N10 at Segezhsky Pulp and Paper Mill, Inc., volume of manufacture of paper sacks has made 257,9 million pieces, or or 96%. The volume of craft-liner manufacture has 31% decreas and has made 40 thousand tons. Start-up of the paper-making machine N10 took place in July, 2004 after reconstruction, that will allow to increase volumes of manufacture considerably.
Pitkaranta Pulp Mill, Inc., has made 87,8 thousand tons of commodity cellulose (111.1% to 2003). Commodity output costs made 864 million rbls., that is 13% more than in 2003.
Kondopoga, Inc., has increased manufacture of paper considerably (20.4%) due to development of capacities of the paper-making machine N10 which start-up took place in 2003. Designing paper-making machine N11 goes simultaneously, and upon its start the enterprise will be able to produce one million tons of a high-quality paper per year.
In 2004 Kondopoga, Inc., has purchased Suojarvsky cardboard factory which was in crisis situation. By results of 2004 manufacture of cardboard has grown more than twice and has made 14,1 thousand tons. The new proprietor plans to start the second cardboard-making machine, and modern technologies on manufacture of new kinds of production demanded in the domestic and foreign markets will take root.
Despite of growth of physical volumes of manufacture, balanced financial result of activity of enterprises of thetimber industry complex in 2004 has 217,1 million rbls. of losses, logging and woodworking branches remain unprofitable. Principal causes are the high degree of deterioration of technical equipment, growth of energy carriers' and equipment costs, as well as increased rent for using wood resources.
Considering the situation developed, the Government of the RK at the end of 2004 has made a decision to reduce the rent for using wood resources regarding republican raising factors.
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