Timber Industry Complex

Issues related to the situation in timber industry complex were repeatedly considered at sessions of the commission on increase of stability of development of economy of the republic and development of anti-recessionary measures. On special control there were enterprises which within the year went out of business partially or completely, or had arrears on wages.

Government of Karelia together with other largest forest regions of Russia managed to achieve:

• delays of increase of rates of round timber export customs duties
• grantings subsidies from the federal budget at the rate of 9,3 million rbl. to compensate a part of expenses for payment of percent under credits, creation of interseasonal stocks of wood, raw material and fuel
• compensationof a part of expenses for payment of interests on credits received in Russian credit organizations, at the amount of 20 million rbl. to Karelian exporters from the federal budget.

According to the order of the Government of the Russian Federation N419 Concerning priority investment projects in the field of forest development as of June 30, 2007 Government of the Republic Karelia has adopted a resolution N17-P Concerning confirmation of the order of selection of applications for realization of priority investment projects in the field of forest development as of January 31, 2009.

By orders of the Ministry of Industry and Trade of Russia N729 as of August 11, 2009 and N784 as of August 27, 2009 Polar Bear and Kostomuksha Building Company, Ltd., projects were included in the list of priority investment projects in the field of forest development in Republic of Karelia.

Goal of the Polar Bear project is expansion of production at Segezha Pulp And Paper Mill, Inc., with use of advanced and ecologically friendly technologies, construction of a factory of producing bleached pulp and realization of technical actions on the basic stages of the operating cycle, starting with timber cutting and concluding with paper production.

Kostomuksha Building Company, Ltd., project assumes creation of completely balanced wood harvesting and processing enterprise using advanced, ecologically friendly technologies on the basis of the existing enterprise.

Gradual stabilization of the situation in the logging branch started in the 2nd quarter of 2009, volumes of manufacture in production started to grow in the beginning of the year. Labour productivity has grown considerably, that is related to introduction of assortment technology of wood harvesting which share in total amount of logging in 2009 has increased by 15.3% in comparison with 2008 up to 93.2%.