Consumables
RUSSIAS POSTPONEMENT OF WOOD EXPORT DUTY INCREASES WILL HAVE NO SIGNIFICANT IMPACT ON M-REALS OPERATIONS
Monday 01. December 2008 - Russias announcement that it will postpone the increase of export duties on wood that was foreseen for the beginning of 2009 by at least nine months gives the industry more time to adjust to the ending of wood imports from Russia.
However, it will have no significant impact on M-reals operations, and does not affect the adjustments of production that have already been made, as it does not bring about any decrease in the price of Russian wood. Russian imports share of the wood used in M-real mills has dropped considerably in recent years and it will continue to decrease in the future, too, as a result of production curtailments and capacity closures.
The profitability of the board and paper industry has for long been eroded by record high costs of raw material, energy and transport. It is not possible to restore profitability to a satisfactory level without increasing the prices of products. Decisions related to Russian wood export duties do not reduce the need for price increases.
“The price increases achieved so far are steps to the right direction. However, they are not enough to raise the profitability to acceptable levels. Further increases are needed and they will be introduced. Higher prices will enable us to ensure continuous product development, which will benefit both M-reals customers and its own business,” says M-real CEO Mikko Helander.