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The Russian Forest Product Report

Report Title: Forest Products

Report Type: A - Annual Report

Report Subject: Forest Products Annual

Drafted By: Susan Reid/Mikhail Maximenko

Date Due : 02/14/97

Table of Contents

PRODUCTION

PRICES

TRADE

ENVIRONMENT AND PRODUCTION

Roundwood

Softwood Logs

Temperate Hardwood Logs

Total Sawnwood

EXECUTIVE SUMMARY

With 800 million hectares of forest land, Russia contains 25% of the world's forested area; 20% of the world's forests are in Siberia. Russian forests account for 52% of the world's coniferous area, and 13% of its deciduous area.

Last year's forest products report on Russia gave a detailed description of the situation in the industry. The situation, in general, has not changed. AgAtt recently spent one week in Primorskiy Krai (Eastern Siberia) discussing with krai government and private sector officials conditions facing the industry.

Some private companies are profitable, and some quasi-government operations are profitable, but overall financial conditions of the industry continue to deteriorate. Employment, production, and exports were all down in 1996. Processing is stagnant. Debts of private and quasi-private firms to the federal government stand at an estimated 23 trillion rubles, or $4.1 billion. In the last decade, about one-half of all forestry firms have gone out of business. Of the firms remaining today, there is agreement that many -- one expert estimates 60% -- are on the brink of bankruptcy. There is a great deal of pressure on failing firms to cut trees and sell the logs for quick cash to pay some of their debts so they will be allowed to stay in business.

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