Strategy of lumber industry development

Substantiation of investments into forestry enterprises requires working out of clear strategies and their development.

In the present time, positions of the overwhelming majority of Russian forestry enterprises cannot be called stable. One of the main causes of the present situation is high branch fragmentation. Single exclusions left aside, the scale of activity of domestic forestry companies still does not allow them to become equal-right players оn the world market. Meantime, it takes only really large enterprises that had been there on the market for much longer than a year to solve these problems. So formation of world level Russian companies is a necessary condition for overcoming of a prolonged crises in the timber-processing industry.

Today, the main investment source is financial resources raised by enterprises. By estimate they make more than 60% of total capital investments into the branch. Actually even the largest timber companies have a possibility to invest funds only into maintenance of their present capacities. In the best case the question could concern the construction of comparatively small new plants. Fundamental plant retooling with new equipment and technologies is not in question.

So the only possible tool of large investments attracted to the branch at the present time could be the Russian forestry enterprises’ capitalization increase, which also means growth of their share capital. In this case, only a large and stable company could become an object for serious investments.

Well, what are the criteria which a stable forestry company has to comply with? Obviously, in the first turn it is the scale of business.