Business news from Ukraine


The national forest inventory with a total budget of about UAH 60 million and the publication of data on the state of the forest fund will last until 2027 with the publication of an interim total in 2023, head of the production association Ukrderzhslisproekt Viktor Melnychenko said during a press conference at the Interfax-Ukraine agency on Tuesday.
Melnychenko said that the inventory being carried out would provide generalized information for strategic planning in various sectors, including forestry.

He clarified that the State Agency for Forest Resources had appointed Ukrderzhslisproekt to be responsible for the inventory of forests in Ukraine.
The inventory will be carried out in the next five years, after which the information received will be analyzed and the final report prepared for another year. At the same time, the expert noted that the national forest inventory is the only method for determining the currently unknown indicators of natural growth (loss) of forest vegetation, as well as their qualitative and quantitative indicators, which are the main ones in discussions about the intensity of forest use.
“During the period of independence, only two state forest registrations were carried out: in 1996 and in 2011. Conceptually, it is the Research Laboratory that is designed to change the principles of the national forest inventory,” Melnychenko said.
The head of Ukrderzhslisproekt said that during the inventory, 30 specialists from 15 teams would collect more than 50 items of indicators from 18,000 forest plots, where trees have important ecological and economic characteristics. To record all changes occurring in the forest, the control plots will be regularly studied over two five-year cycles, which will make it possible to prepare an array of more than 70 types of reporting data with generalized information about the forests of Ukraine.
According to him, at the moment the project staff numbers 19 people, of which seven teams have been formed, and five more employees will check the objectivity of the information already collected.
The inventory budget for 2021 will amount to UAH 12 million, 90% of which will be used to pay the salaries of workers collecting information in the field. Accordingly, the total budget of the National Forest Inventory for the entire duration of the program is planned at about UAH 60 million.
Melnychenko clarified that data on the state of forests would be made public on a publicly accessible specialized website with information about the national forest inventory. In this case, the maximum statistical error during research will be no more than 3%.
“The inventory data will be a significant source for scientific research, which will contribute to the further improvement of forest inventory characteristics. In the future, the research laboratory will play a key role in the state system of information on forests,” Melnychenko said.

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Ukrainian woodworkers have proposed that 50% of unprocessed timber is sold at electronic auctions and 50% is sold under long-term contracts on the term of the offer, aiming at stable development of forestry and support of deep processing of wood.
The concept, proposed for amending a bill on the wood market, was announced by Director General of Kronospan Ukraine LLC Natalia Pokinska at a press conference organized by the InvestRivne agency in Kyiv on Thursday.
According to her, industry representatives are proposing a “cascade” principle of holding auctions on electronic platforms, i.e. they can be of four types: basic, additional, repeated and additional repeated.
At the same time, the participants in the main auctions should be woodworking enterprises that have submitted a declaration on the relevant activity and are included in the register of wood processing entities, and the participants in the additional ones – buyers of wood for needs not related to processing and production of products from it, as well as manufacturers of wood chips and companies that use timber as an alternative source of energy, biofuel producers and nonresidents.
“If we compare an entity that buys raw materials for the production of chipboard and a buyer for biofuel production, they are also in different categories for government support, since the energy industry provides for certain subsidies, and such buyers can pay more for raw materials and compete with the real sector which deeply processes wood,” Pokinska said.
Regarding the conclusion of contracts for the sale of timber on the term of the offer, industry representatives also propose to conduct them on a transparent electronic platform (“forest portal”), and publish the results automatically after the offer was approved to avoid accusations of non-transparency or behind-the-scenes of the process.
“We have analyzed the laws of other states, EU directives, and we can say that such a cascade is a guarantee of deeper processing of raw materials with high added value,” the director general of the company said.



Forest Innovation and Analytical Center has begun the creation of the Forestry Startup Fund on behalf of Head of the State Forest Resources Agency of Ukraine Vasyl Kuzovych.
“The main task of the Fund will be the development of a special platform (project exchange) designed to streamline contacts between startup developers and potential investors interested in creating modern high technologies in the timber industry,” the press service of the State Forest Resources Agency said on Saturday.
According to the press service, in the future, the Forestry Startup Fund may become the founder of the first industrial park in the forestry industry, arranged according to the classic three-module scheme, which has proven itself in Silicon Valley and other global centers of innovation.

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Ukrainian Sawmills LLC (Kostopil, Rivne region), which produces sawn timber, furniture panels and semifinished products, declares a critical situation in connection with the failure to deliver the full volume of logs by state-run forestry enterprises legally acquired by the company at open auctions, the company has said on its Facebook page.
“We, the newest sawmill, launched at the end of 2017, are now on the brink of survival. The most important problem is providing raw materials in full, or rather begging legally acquired raw materials from state-owned forestry enterprises. According to the results of the third quarter of 2020 (left only three days before it ends), the forestry enterprises of Zhytomyr and Volyn regions, as well as some forestry enterprises of Rivne region supplied us with less than 50% of the purchased wood,” the company said on Monday, September 28.
Ukrainian Sawmills said that they participate in all auctions for the purchase of coniferous sawlogs, since this year they decided to fully utilize the existing design capacities.
“We will demand additional supplies of logs. But who will compensate us for the forced downtime, loss of business reputation due to unshipped products to buyers and possible penalties for our failure to fulfill obligations?” the company said.
In addition, the company drew attention to the fact that some auctions are announced in such a way and at such a time that only those “for whom the auction is specially held” can learn about them.
“It turns out that we already have a system of shadow auctions so that the right raw materials go to the right people, and not to those who want to buy. Formally, everything seems to be honest: there is an official announcement and an auction is being held (print screen is attached). But the problem is the one for whom this auction is specially held, without providing for other participants, can only know about it,” the company said.
Ukrainian Sawmills appeal to the Office of the President, the Cabinet of Ministers, the State Forest Resources Agency and the regional forestry and hunting departments with questions about holding such auctions, at what prices they buy raw materials, whether there are any abuses and unlawful benefits.
Ukrainian Sawmills LLC was registered in September 2014 in Kostopil. According to the public register, 100% of the charter capital is owned by the company Ukresta Holdings Limited, registered in Cyprus.



President of Ukraine Volodymyr Zelensky has signed the law “On Amendments to the Forest Code of Ukraine regarding the National Forest Inventory” No. 643-IX, which the Verkhovna Rada adopted on June 2, 2020.
“The law provides for the creation in Ukraine of a new system of collecting reasonable data on the forest fund for the purpose of further planning, forestry, the state forest cadastre, forest monitoring and the like,” the head of state’s website reported on Tuesday.
The document introduces the concept of a national forest inventory, defines its purpose and sources of financing.
The procedure for conducting a national forest inventory is approved by the Cabinet of Ministers of Ukraine, it will be carried out at the expense of the state budget or other sources not prohibited by law.
According to the law, persons authorized to conduct a national forest inventory during examinations have the right to be on land plots of the forest fund of Ukraine, except as otherwise provided by law.
Information obtained from the results of the national forest inventory is entered into the state land cadastre.
The law comes into force on the day after its publication.

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Latschbacher Group, together with Austrian partners, offers ground-based laser scanning technology for forest inventory in Ukraine, as well as studies based on simulation of forest growth, Volodymyr Molochko, a specialist in accounting harvested forest and solutions for tracking forest supply chains at Timber & Equipment GmbH from Latschbacher Group, has reported.
“We prepared calculations of the project. We’ve performed various calculations that will help soberly evaluate different ways of conducting an inventory. According to our estimates, the cost of implementing the national forest inventory in Ukraine using modern methods with laser technology will be about EUR 10 million,” he said in an interview with the Interfax-Ukraine agency.
Gunther Bronner, a specialist in accounting technologies for growing forests at Umweltdata GmbH, explained that traditionally the national forest inventory is carried out using standard methods based on laying sampling points and creating special teams.
According to data from Austrian experts, Ukraine plans to carry out the national forest inventory using standard methods, which will take five years and substantially more funds. In particular, they noted it is necessary to lay more than 16,000 sample points across the entire forest area in Ukraine, process 400 points a month, which will require at least nine teams of two people each.
“If to look at the costs spent on conducting the national forest inventory, the time and effort spent on it, and compare the benefits actually gained from this with the capabilities of laser scanning from an airplane, there will be no other alternative but to get into a deep depression,” Molochko believes.
According to Bronner, several countries, in particular Austria and Ireland, use an alternative method of laser scanning, and the experience of Austria with mixed forests and mountainous terrain similar to those in Ukraine would be very useful for Ukraine. He added that new laser technologies allow to significantly expand knowledge about the growing forest, the boundaries of forest areas, the topography, species and assortment composition, get a comprehensive model of crown heights, as well as identify forest areas infected by the beetle and plan its harvesting, build forest roads and get the maximum economic effect.
“A thorough mapping of forest resources will open the way to a quality forest management system. We estimate losses from inefficient forest management in Ukraine at tens of millions of euros per year, and these are optimistic figures,” Molochko said.
He specified that the forest area in Ukraine is approximately 10.4 million hectares, which is comparable to Poland, where the forest area is about 9.2 million hectares or Germany, which has 10.7 million hectares of forests. However, legal timber harvesting in Ukraine is about 20 million cubic meters per year, while in Poland and Germany the figure is about 40 million cubic meters and 64 million cubic meters respectively.

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