Segezha Group turn To China

Лесопользование и сертификация English documents Партнеры Циклическая экономика
In the early January Russian timber holding Segezha Group, active both in Karelia and Siberia, signed agreement with Russian corporate giant AFK “System” with a target to develop lumber industry, transportation and logistics. Agreement includes creation of special Siberian division of Segezha and study opportunities of creation special Siberian plant on production heavy logging equipment and machinery.

Segezha is broadly known as a biggest logging and lumber Russian enterprise, supplying Karelian and Siberian timber, producing paper, veneer, CLT-panels and paperboard. Initially Segezha was Europe oriented, since 2016 entered for that to CEPI Eurokraft Association and started production of highly demanded in EU CLT-panels and fuel pellets in 2021. In Siberia Segezha purchased for that regional logging giant Lesosibirski LDK-1, famous since 1990-s as deeply criminalized China oriented enterprise. A bit later Segezha included into its assets another, export oriented Novoeniseiski lumber-chemical complex, and finally added to the holding one more timber company InterForestRus, active in the vast Krasnoyarsk and Irkutsk taiga. To increase its capital from 10K to 1,5 billion rubles, management of InterForestRus passed its assets to the foreign Interforest AG.

As a result of such tricks, Segezha consolidated almost all timber industry of the whole East Siberia – legal, grey and illegal. But, despite giant market income, profit of the Group remain low and not stable, keeping company next to bankruptcy with about 24 billion rubles of official debts. Besides catastrophic failure of European markets in early 2022, by experts, it means that management of the Group continue hiding serious incomes somewhere outside of Russia. Now Segezha is trying to insert CLT-panels into Russian market, since neither they, nor fuel pellets are demanded in China. But, it is obvious that CLT panels are absolutely non marketable both in Siberia and in China as construction material.

Nonetheless, Segezha still can supply paper, paperboard and veneer, which remain unlimitedly demanded in China. That means, that plans to move main timber processing industries to Siberia, next to the key logging areas, will be obviously implemented. That also means that wide scale Siberian logging by Moscow based Segezha management will grow further, the more that governmental and non governmental forest control is reduced down to almost zero since March 2022. Regarding that, Russian Expert Council on Nature Conservation have sent yesterday special warning letter to the top management of AFK “System”, pointing out total illegality and impossibility to develop designated logging operations upon territories, which were preliminarily reserved for creation new protected areas in Karelia and Siberia.