Segezha Group highly appreciates the potential of trade and economic cooperation with India in the forest industry complex

On September 5 in Vladivostok, as part of the business program of the Eastern Economic Forum (EEF-2024), member of the board, vice president for external relations of Segezha Group, head of the Board Materials and House Building Division Nikolay Ivanov took part in the business dialogue "New contours of international cooperation. Russia - India". The top manager noted that Segezha Group considers India as one of the most attractive and promising areas for business.

«Working with India in the context of the changed global situation allows our business to realize and explore significant potential in this strategic region. The current state of export volumes to India is the beginning of a long promising path. Currently, only 3% of Russian forest industry products are supplied to India. In the structure of Segezha Group exports, India's share is only 1%. However already this year we plan to increase the volume of deliveries to this region by 50% compared to 2022. Of course, these are comparatively small values ​​compared to the huge potential that we see today», - Nikolay Ivanov said during the discussion.

Segezha Group supplies classic sawn timber and plywood to India, but seeks to expand the range of construction solutions it proposes. The low-carbon development agenda is presently highly relevant for the BRICS+ countries, and the company's products can help resolving this issues. Wooden house kits are a big step in this direction, but there is also biofuel, wood pellets, which are an excellent substitute for coal, said the vice president of Segezha Group.

Nikolay Ivanov also outlined the problems that need to be resolved at the governments level.

«We would like tariffs on the import of Russian forest products to India to be no worse than for other exporting countries. For example, for plywood, these rates today reach 30%. On paper, the import duty in India is 10% for products from Russia, and from 0 to 7% for other exporters. This does not allow us to actively increase volumes”, - he said. – “The issue of logistics costs is also very important. For efficient operation, the share of transportation costs should not exceed 15-20%. That is to say, $1800 for a 40-foot container will be acceptable. We are actively negotiating this questions with our partners».

According to Nikolai Ivanov, with a reduction in logistics costs and customs duties, Russia could export to India the equivalent of about 50 million m3 of round timber in processed form, which is a quarter of the total volume of timber harvested in Russia.

Despite the fact that India itself harvests about 300 million m3 of timber per year, the market for Russian products has great prospects, due to the different intended purpose and quality of Russian timber, from which paper, packaging, lumber, modular houses and wood pellets replacing coal will be produced and exported to India.

Development of forestry and paper goods exports to India will allow the Russian forest industry to drastically increase sales efficiency by market diversification and reducing pressure on prices in other export markets.

A very important point for organizing interaction with Indian partners is work on creating a certification system for sustainable forest management and a supply chain management system for products, as opposed to FSC and PEFC, which have left Russia and have long been unsatisfactory to our BRICS+ colleagues. The basis for such joint work can be a certification system according to the internationally recognized ISO 38200 standard.

The participants in the business dialogue noted that India is a long-standing friend of Russia, a business, cultural and political partner. Strong ties between friendly countries were built back in Soviet times and today they are reaching a new level. The Indian economy is showing impressive growth rates.

The event was attended by: Ambassador Extraordinary and Plenipotentiary of the Republic of India to the Russian Federation Vinay Kumar, Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic Anatoly Bobrakov, Chairman of the Indian-Russian Business Council Tribhuvan Darbari, Deputy Head of the Federal Customs Service of Russia Vladimir Ivin, business and banking leaders as well. A certain optimism can be expressed regarding the prospects for establishing a free trade zone, outlined in the closing remarks of the Ambassador of the Republic of India to Russia.

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