RFP Group Proposes Privatization of Part of Russia’s Forests

In the Far East, there is less and less mature forest with high-quality timber suitable for processing.

Konstantin Lashkevich, the head of the RFP Group, the largest timber industry enterprise in the Far East, proposes for authorities to allow the privatization of 2-3% of the forests in Russia to engage in “intensive forest cultivation” on the privatized plots, Vesti.ru reported.

In existing clearings, one would need to wait 80-120 years for the natural growth of the forest. “To allow privatizing such land, cheaply insure timber, mortgage it in a bank, increase its value on the balance sheet through growth and attract money from domestic and foreign funds, as New Zealand does – cheap long-term money to invest in this story,” said Lashkevich in an interview with RBC.

It is necessary to invest about $5 thousand per hectare until the forest begins to grow. It is advisable to single out the most favored climatic zones, which occupy only 2-3% of Russia, and to engage in intensive forest use in these zones with the right of ownership, Lashkevich emphasized.

Meanwhile, RFP Group refused to build a pulp and paper mill (PPM) in the Khabarovsk Territory, an investment which could amount to $1 billion.

“There used to be a pulp and paper mill in Amursk, but it closed after the collapse of the USSR. There was an idea to build the plant ourselves. We hired foreign consultants who worked on this project, and said that the chances would be close to zero,” Lashkevich explained.