In January-September 2024, the State Enterprise “Forests of Ukraine” increased its timber sales to 9.3 cubic meters, which is 6.9% more than in the same period in 2023, the company’s CEO Yuriy Bolokhovets said in a telegram channel.
“Once again, we are convinced of the correctness of the decision to refuse processing. This year, we are no longer maintaining unprofitable workshops and are actively selling resources to the market at prices determined by exchange trading,” he said.
According to Bolokhivets, roundwood was the driver of sales growth, with sales increasing by 562 thousand cubic meters to 4.4 million cubic meters. In monetary terms, roundwood brought in an additional UAH 2.1 billion compared to last year.
At the same time, there were other factors that led to a decrease in revenues, he said. Among them is a drop in prices for industrial firewood, which reduced revenues by about UAH 330 million compared to last year. At the same time, the cost of contractors’ services has increased, and, accordingly, the cost of harvesting (instead of shadow barter, there are now transparent relations based on market prices), explained the CEO of the state enterprise.
“Les Ukrayiny managed to keep its net profit at the level of the previous year – UAH 2.6 billion, as well as a profitability level of more than 15%,” stated Bolokhovets.
At the same time, the state-owned enterprise more than doubled its free timber supplies to the Armed Forces of Ukraine to UAH 305 million. Due to the refusal to process wood, Forests of Ukraine received additional resources to help the frontline, increased salaries for lower-level employees, increased investments in fixed assets and the formation of the procurement services market, the head of the state enterprise added.
“Throughout the year, the average price of timber has been slowly but steadily declining. However, I hope that by the end of four quarters we will surpass last year’s economic performance. The transformation process will help the company become stronger and we will have a solid foundation for growth in the coming years,” summarized the CEO of Forests of Ukraine.
As reported, Ukraine launched a forestry reform in 2016. As part of it, the sale of raw wood at electronic auctions has already been introduced. Since 2021, an interactive map of wood processing facilities has been operating in a test mode in a number of regions.
The industry has implemented the Forest in a Smartphone project, which contains a list of logging tickets for timber harvesting and allows you to check the legality of logging on the agency’s online map.
On June 1, 2023, Ukraine launched a pilot of electronic issuance of logging tickets and certificates of origin of timber. In addition, the State Enterprise “Forests of Ukraine” has launched a pilot project to procure timber harvesting services through the electronic platform Prozorro.
In January-June 2024, the State Enterprise “Forests of Ukraine” earned UAH 11.14 billion, which is significantly more than in the same period in 2023, said the company’s CEO Yuriy Bolokhovets.
“The absence of in-house processing is fully compensated by a 15% increase in sales of unprocessed wood,” he wrote on his Facebook page.
Bolokhovets also noted that the state-owned enterprise has also lost significant subsidized assets, which the State Property Fund sells through Prozorro. Keeping non-core assets for years only drained the company’s funds, he explained.
“As a result, we expect a significant increase in the company’s profits. It’s too early to talk about specific figures, but it’s hundreds of millions of hryvnias more than last year,” the CEO emphasized.
Such decisions allowed the company to increase salaries of lower-level employees – forest masters and assistant foresters – and to increase social guarantees for demobilized employees, of which the company has more than 500.
In addition, the state-owned enterprise was able to raise prices for contractors and increase spending on the Armed Forces of Ukraine.
“The reform has changed everything. The State Enterprise “Forests of Ukraine” has moved to a model of market wages and transparent conditions for organizing production,” summarized its CEO.
According to the Opendabot service, the total profit of the State Enterprise “Forests of Ukraine” in 2023 amounted to UAH 2.8 billion.
As reported, Ukraine launched a forestry reform in 2016. As part of it, the sale of raw wood at electronic auctions has already been introduced. Since 2021, an interactive map of wood processing facilities has been operating in a test mode in a number of regions.
The industry has implemented the Forest in a Smartphone project, which contains a list of logging tickets for timber harvesting and allows you to check the legality of logging on the agency’s online map.
On June 1, 2023, Ukraine launched a pilot of electronic issuance of logging tickets and certificates of origin of timber. In addition, the State Enterprise “Forests of Ukraine” has launched a pilot project to procure timber harvesting services through the electronic platform Prozorro.
The State Enterprise “Forests of Ukraine” has won a tender of the Ministry of Defense of Ukraine for the supply of almost 28 thousand cubic meters of wood, the company’s CEO Yuriy Bolokhovets said on Facebook.
“The bidding took place on Prozorro. The final price was UAH 3,750 per cubic meter. According to the terms of the contract, the supplier fully ensures the delivery of products. That is why the price is slightly higher than at exchange auctions,” he wrote.
The Director General added that in 2024, SE “Forests of Ukraine” provided the Defense Forces with almost 75 thousand cubic meters free of charge and fulfilled all the requests received by the company from military units.
“We believe it is right that the timber will be supplied to the military directly from the manufacturer under the tender procedure. This will allow us to optimize budget expenditures, guarantee the quality and timeliness of deliveries,” Bolokhovets said and added that since 2023, the State Enterprise “Forests of Ukraine” has provided the Armed Forces with almost 200 thousand cubic meters of lumber and raw wood worth more than UAH 330 million.
As reported, Ukraine launched a forestry reform in 2016. As part of it, the sale of unprocessed timber at electronic auctions has already been introduced. Since 2021, an interactive map of wood processing facilities has been operating in a test mode in a number of regions.
The industry has implemented the Forest in a Smartphone project, which contains a list of logging tickets for timber harvesting and allows you to check the legality of logging on the agency’s online map.
On June 1, 2023, Ukraine launched a pilot for the electronic issuance of logging tickets and certificates of origin of timber. In addition, the State Enterprise “Forests of Ukraine” has launched a pilot project to procure timber harvesting services through the electronic platform Prozorro.
The State Enterprise “Forests of Ukraine” is completing spring planting, during which it has already planted more than 113 million seedlings, which is 102% of the plan, said the company’s CEO Yuriy Bolokhovets.
“We are continuing large-scale planting in the South, where no new forests have been created for many years. The areas for reforestation in Mykolaiv region have been agreed with ecologists so as not to harm the steppe ecosystem. Among other regions, the leaders in planting were the Kyiv Forestry Office and the Polissia Forestry Office,” he wrote on Facebook.
According to Bolokhovets, in 2024, foresters are not only reforesting, but also increasing the area of new forests, in particular, reforesting areas transferred to the state enterprise by local communities as part of the Forest Recovery project.
“In total, more than 2.1 thousand hectares of new forests have been created this spring, which is more than all forestry enterprises did in the entire year of 2022,” he added.
In addition, Forests of Ukraine is increasing the production and planting of seedlings with a closed-root system (CRS), which demonstrate better survival, savings on care and allow planting larger areas with fewer resources. Prior to the reform, 1-2 million seedlings were planted with the SSS, while this year’s plan is to plant 20 million, Bolokhovets said.
“In general, the creation of high-quality planting material is turning into a promising business area for the State Enterprise “Forests of Ukraine”. According to the latest news, we are preparing about 107,500 seedlings for sale to Estonia. Our network of seed-breeding centers is expanding and increasing its capacity,” summarized the CEO of the Forests of Ukraine.
As reported, the forestry reform was launched in Ukraine in 2016. As part of it, the sale of raw wood at electronic auctions has already been introduced. Since 2021, an interactive map of wood processing facilities has been operating in a test mode in a number of regions.
The industry has implemented the Forest in a Smartphone project, which contains a list of logging tickets for timber harvesting and allows you to check the legality of logging on the agency’s online map.
On June 1, 2023, Ukraine launched a pilot for the electronic issuance of logging tickets and certificates of origin of timber. In addition, the State Enterprise “Forests of Ukraine” has launched a pilot project to procure timber harvesting services through the electronic platform Prozorro.
The state enterprise “Forests of Ukraine” has signed an agreement to supply 110,000 pine and spruce seedlings with a closed root system (CRS) to Slovakia, said the company’s CEO Yuriy Bolokhovets.
“We are replacing raw material exports with products of our own production. (…) We are negotiating the purchase of seedlings with a number of clients. Not only European ones,” he wrote on Facebook.
Bolokhovets recalled that for the first time, the Lviv Seed Breeding Center of the State Enterprise “Forests of Ukraine” exported seedlings in 2022. The feedback from European customers was positive. Therefore, in 2023, the state-owned enterprise again received a large contract.
The CEO of the state-owned enterprise noted that one of the advantages of planting material from the SCA is the ability to plant it almost all year round, which greatly simplifies the work of foresters. At the same time, the cost of creating a forest is reduced by 35%. After all, modern plants require much less seeds, fertilizers, space, and post-planting maintenance, as seedlings with SCA have more growth energy.
Currently, forest seed plants of the State Enterprise “Forests of Ukraine” operate in Zhytomyr, Ternopil, Khmelnytsky, Lviv, and Kirovohrad regions. This year, another center in Ivano-Frankivsk region has already been launched.
“Our goal is to produce 40 million seedlings per year with SCA. Most of them are intended for Ukraine, but we plan to increase exports as well,” summarized the CEO of the State Enterprise “Forests of Ukraine”.
As reported, Ukraine launched a forestry reform in 2016. As part of it, the sale of raw wood at electronic auctions has already been introduced. Since 2021, an interactive map of wood processing facilities has been operating in a test mode in a number of regions.
The industry has implemented the Forest in a Smartphone project, which contains a list of logging tickets for timber harvesting and allows you to check the legality of logging on the agency’s online map.
On June 1, 2023, Ukraine launched a pilot for the electronic issuance of logging tickets and certificates of origin of timber. In addition, the State Enterprise “Forests of Ukraine” has launched a pilot project to procure timber harvesting services through the electronic platform Prozorro.
In January 2024, the State Enterprise “Forests of Ukraine” liquidated wood processing plants throughout Ukraine, said the company’s CEO Yuriy Bolokhovets.
“Elimination of processing is a painful topic. It is much more pleasant to create than to close. But sometimes you have to make unpopular decisions,” he wrote on Facebook.
The company’s CEO said that forestry enterprises had started processing earlier because the sale of round wood did not cover costs. However, after the development of private wood processing, competition in the market increased. State-owned production facilities are formally profitable, but in fact they are subsidized.
As an example, Bolokhovets cited the work of a workshop of one of the branches of the Forest of Ukraine, which specializes in harvesting oak and produces oak parquet lamellae. Its profit for 10 months of 2023 amounted to UAH 8.3 million. However, the shop receives oak at cost, which is much less than the market price.
“If the same round wood were sold through open bidding, the branch could have earned UAH 24.1 million. Formally, the shop’s profitability is 58%, but in reality, the company lost UAH 16 million,” explained the company’s CEO and added that the situation is similar in almost all processing shops, of which there are more than a hundred at Forests of Ukraine.
According to Bolokhovets, in 2023, the workshops of the State Enterprise “Forests of Ukraine” processed 0.9 million cubic meters of wood, the market value of which is UAH 2.15 billion. The company sold 0.4 million cubic meters of lumber worth UAH 2.3 billion. The difference amounted to UAH 150 million, which is several times less than the cost of production (salaries, electricity, etc.), the head of the state-owned enterprise stated.
“In addition to the burden of subsidies to the workshops, we will also get rid of a significant share of corruption, which will also certainly contribute to an increase in the SOE’s revenues,” Bolokhovets stated and expressed confidence that the first positive results of this structural change will be visible in the first half of 2024.
As reported, Ukraine launched a forestry reform in 2016. As part of it, the sale of unprocessed timber at electronic auctions has already been introduced. Since 2021, an interactive map of wood processing facilities has been operating in a test mode in a number of regions.
The industry has implemented the Forest in a Smartphone project, which contains a list of logging tickets for timber harvesting and allows you to check the legality of logging on the agency’s online map.
On June 1, 2023, Ukraine launched a pilot for the electronic issuance of logging tickets and certificates of origin of timber. In addition, the State Enterprise “Forests of Ukraine” has launched a pilot project to procure timber harvesting services through the electronic platform Prozorro.
