Absolutely nothing if you ask me and many others. I’m pretty sure that most common people don´t want it, but then there are one or two id..ts that for some reason don´t agree, in this case, one. By now we all know what has happened in Ukraine: On the 24th of February 2022, Russia invaded a democratic neighbor as it seems for no special reason. Out of a human and political aspect, it´s horrible. The World has reacted with disgust and sanctions against Russia and aid to the Ukrainian people. The EU has opened its doors for refugees. But how does the ongoing conflict affect us in the forest?
What is it good for? Stopped deliveries
Russia is a large forestry nation and for many suppliers of forestry equipment, it is an important market. Many Swedish and Finnish companies have good relations with Russian forest companies, and some are dependent on those contacts. Now, when the swift system is closed for Russian companies, and of course due to what´s going on in Ukraine, more and more companies choose to stop dealing with Russian partners.
One company that reacted quickly was Finnish Kesla who canceled an order of forestry equipment to the Russian company Amkodor-Onego worth 10 million Euros. This meant that Kesla has had to reevaluate its outlook for 2022. A new outlook will be presented when the effects of the situation are clear.
The business magazine DI reports that both the Swedish truck manufacturer Volvo and the Chinese-controlled company Volvo cars have stopped sales to Russia. Volvo Trucks also stopped their production in Russia.
DI also reports that the tissue manufacturer Essity will stop its production in Russia within two weeks. All deliveries to and from Russia will be stopped. Essity has three production plants in Russia, representing approximately 2 percent of Essity’s total turnover.
This listing is likely to grow in the coming days.
What is it good for? Wood vs. natural gas
Finland’s forest- and heating industry imports some 10 million cubic meters of birch round wood from Russia annually. With the international sanctions against Russia, the Finns now must find this wood elsewhere. According to the Finnish forestry magazine Metsalehti, it’s being discussed to increase young thinning of birch in Finland to cover the loss. Maybe the situation will end up in the import of birch from the neighboring Baltic States and Sweden.
Germany is a large consumer of natural gas, and 40 percent of the consumed 800 TWh (Tera-Watt hours) in the country is imported from Russia. The quick change of the security situation in Europe has caused problems for Germany as the sanctions make it difficult to trade with Russia. If the situation doesn’t improve soon, new solutions have to be found to replace the Russian natural gas (why not all natural gas?).
One thought that comes to mind, is to replace natural gas with bioenergy from the forest. After all, we are forestry people. But when we look closer into that, it may not be as easy as it seems. The EU consumes 3600 TWh natural gas annually, of which half is Russian gas. To replace that with wood would take 1,3 billion cubic meters of solid wood which is more than twice as much as the annual felling in the EU. So, here we have to think again …
What is it good for? Lumber and sheet materials
Due to export duties, there hasn’t been much flow of round wood from Russia lately. As for sheet materials and lumber, Russia is a large producer, and one of the largest exporters in the World. According to a press release from WRI, the export value of forest products from Russia in 2021 was over 12 billion US dollars.
Now, with all sanctions, this is likely about to change. Lumber prices are already high, and the question is if the current situation will make them even higher. On the other hand, a general recession due to the war may cause a decrease in building meaning that the need for lumber and sheets materials decreases.
What is it good for?
Yes, what is war good for? We are always keen on saying “rest in peace” to those who have left us. Why should it be so difficult to live in peace?
Sitting on the side watching it´s difficult to understand. A few weeks ago, a retired Russian general said that a war against Ukraine is stupid. He said that Ukraine was no threat to Russia and that a conflict would only lead to unnecessary costs of money and lives. That seems logical to me but apparently not to everyone.
From the outside (so far), it looks like a “one-man-show”. But can it really be that? The Russian dictator has cleared out the opposition over the years and is now surrounded by “yes-sayers”, who just do what they are told to do. It reminds a lot about a certain dictator in the 1930s, who eventually shot himself because nobody else had the guts to do that for him.
Let´s try and stay optimistic and hope that the next article on the subject here at Forestry.com is about how the war in Ukraine has ended. Now, I will focus on the next article that will be about some interesting forestry equipment.
Take care out there!