23 june 2010

Prime Minister Vladimir Putin meets with First Deputy Prime Minister Viktor Zubkov

The two officials discussed the progress of government policies to support the timber industry. Zubkov said the government support helped improve the industry’s performance indicators in the first quarter and revive investment.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Zubkov, you head the interdepartmental council on the timber industry. We have been following the industry lately, so we are aware of the challenges facing it. This sector has its own traditional problems as well as new challenges posed by the global recession. This is why we have suspended any new export duties on certain types of timber. Yet, we have agreed to stick to our plans to develop domestic wood processing to a greater degree of conversion. We will see that these plans are implemented. I would like to here your report on the progress here.

Viktor Zubkov: Mr Putin, the timber industry council has been working successfully for two and a half years. It includes important ministries and agencies, business leaders and regional governors. The council has come up with a set of policies the government is implementing now.

Last year, we allocated over 500 million roubles to support timber companies; this year, we will provide 1.3 billion roubles, including financing to build timber reserves between logging seasons and the promotion of exports. We are also determined to keep the forest yield fees at their 2008 level. This kind of state support has encouraged more investment.

There are 92 investment projects worth over 408 billion roubles underway in the industry. They account for nearly 70 million cubic metres of timber and 42,000 jobs. Last year, state support and investment allowed the industry to implement nine deep-conversion projects worth 23 billion roubles. I would like to cite a project in Novovyatsk in the Kirov Region (total investment 3 billion roubles, 542 jobs), and a timber mill in Boksitogorsk in the Leningrad Region (2.6 billion roubles). This is a lot.

This year we will start ten more projects worth 41 billion roubles, including an upgrade of a pulp and paper mill in Syktyvkar (the Komi Republic, 17 billion roubles), and a beam and pellet plant in Torzhok (the Tver Region, 7 billion roubles, 660 jobs).

Our policies have significantly improved the sector's performance indicators in the first quarter. This is what happened. The output of every product increased from the same period last year, including sawn timber up 9%, plywood 37%, chipboard 18%, wood pellets 25%, pulp 10%, and paper and cardboard up 11%. As you see, the growth rate was quite impressive in the first quarter.

Now regarding exports: the only product which showed a decrease was raw timber, down 500,000 cu m, which is not bad news for us. Other exports increased, sawn timber by 13%, chipboard 35%, and plywood 30%. These figures are impressive too.

My conclusion is that government support has led to significant improvement. The existing 92 investment projects should help the sector boost production further and create still more jobs.

Vladimir Putin: You have mentioned projects in northwestern and central Russia. What is the situation like in the east?

Viktor Zubkov: We are tracking all investment projects in all federal districts. There are some positive projects in Siberia and the Far East. In fact the investment is pretty much proportionate nationwide, including the Krasnoyarsk Territory and other remote regions.

Vladimir Putin: How would you assess the customs policies?

Viktor Zubkov: Mr Putin, we are working on customs issues. Right now, we are working on a set of policies to control the products that pass through customs. We believe this issue should be considered separately, possibly at a council meeting. We need to discuss its transparency and activity.

Vladimir Putin: Good.