The Baltics - Latvia. Kevin Hayes AKZ Timber. Acknowledgements to Kristaps Klaus, Latvian wood

Transcription

1 The Baltics - Latvia Kevin Hayes AKZ Timber Acknowledgements to Kristaps Klaus, Latvian wood

2 Latvian Forest Industry 2012 Direct employment 40,000 Indirect employment 80,000 Private Forest owners receiving income from forest within the last 5 years 140,000..of which working age 90,000 Forest Industry value EUR 1.9 bn Export value EUR 1.7 bn Contribution to GDP 5%

3 Interaction of the forest industry organizations Latvian Association of Independent Timber Harvesting Companies Latvian Union of Timber Harversting Companies Latvijas Biomasas Asociācija Latvian Timber Producers & Traders Association Association "Latvijas Mēbeles" Latvian Association of Wood Processing Companies and Exporters Association "Latvijas Koks" Environmental organizations Latvian Forest Industry Federation Forest Sector Information Centre Latvia University of Agriculture Government and municipalities Society Forest and Wood Product Research and Development Institute; Management of Measurement and Inventory of Latvian Timber Products Forest Sector Competence Centre Forest Owners' Association Institute of Wood Chemistry; Forestry Research Institute "Silava" Latvian private forest owners and unions A/s "Latvijas Valsts meži" - manager of state-owned forests

4 Latvian Forest resources Historical and an important role in the economy of Latvia, Forest cover increasing - today more than a half of the territory of Latvia Annual natural growth 27m M³ Annual harvesting volume 10-13m m³ Total growing stock 670 m m³ Sustainable forestry 4

5 Latvia Forest protected areas

6 Latvia Forest breakdown Neak vo īpašnieku "saimnieciskie" meži 9% 3% 2% 1% Aizliegta MEŽSAIMNIECISKĀ DARBĪBA 37% 7% Aizliegta KOPŠANAS CIRTE Aizliegta GALVENĀ CIRTE Aizliegta KAILCIRTE FSC vai PEFC ser ficē e "saimnieciskie" meži 41% Mežs, kur mežsaimniecību regulē vairāki desmi norma vo aktu

7 Compliance with EUTR Action and/or the required documents Felling confirmation issued by the public authority verifies legal origin and right to harvest During harvesting environmental requirements are observed Reforestation Tax paid on the realised round timber Scale of violations Felling confirmation is not issued ~1% of the number of applications (preventive action). Per % of annual logging volume is illegally harvested. This "undocumented" wood very rarely come into the industry and never products produced from this timber are exported. More serious violations <0.03% of felling areas; minor violations <0.5% of felling areas thousand ha were cut, and thousand ha were recognized as renewed in the period from 2005 to For those, who do not perform reforestation in the defined period, new felling areas are denied until the reforestation is performed. Taking into account that the effective tax rate (for private people) on realized growing trees is 7% of the income, while for the assortment it is 5%, forest owners are no longer interested in cheating.

8 Forest age structure

9 Harvesting volumes

10 Forest ownership structure 10

11 Latvia - small private forest ownership Total 150,000 private forest owners in Latvia Average forest property area 7.5 hectares 92% forest owners hold less than 20ha of forest ,4 32,8 13,9 3,9 Forest owners Of the area No skaita, % No platības, % 27,4 28,5 6,9 7,4 0,8 <2 2, , ,1-50 >50 Forest ownership structure by the size of the property 11

12 Latvian Forestry Industry Sawnwood usage 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 10% 13% 2% 75% Further procesing selfproduced sawnwood Sold for further processing within LV Sawnwood used by households Directly and indirectly exported sawnwood

13 Industry export dynamics

14 Latvia in Europe Forest area 1.92% of European forests. 13 th largest in EU Forest area per head 1.28ha - 4 th place in EU Forest coverage 54% - 4 th place in EU Population 0.47% of EU 2 smallest after Estonia De-population issue Numbers Education Location

15 Latvian Timber Industry Commercial Issues Log availability Public sector - fast flow contracts v auctions Private sector - price incentives - pulp market poor Efficient sawmilling Expensive raw material Higher yields, lower wastage Added value products Smarter marketing Diverse markets Strong customer relations Consistency of product Innovation

16 Latvia Timber Industry Outlook More of the same Tight raw material Increased costs Timber price inflation Markets Japan full USA back super cycle? Europe busy N. Africa resilient Emerging markets UK recovery surprise factor Timing Unprecedented?

17 Thank you for listening! Kevin Hayes