Pulp and paper industry of the North-West Russia has been at tha stage of stagnation for three years already. It can be explaind by the following factors: out-of-date machinery, low prices on pulp and economical crisis.

In 2008 total pulp cooking volume in the North-West Russia increased only by 0.2% as compared to 3.733 mln tons in 2007. Stagnation started 3 years ago with the first decline in production fixed in 2006.  In 2007 production output continued decreasing making up 1.5%.  

Only to survive

Total production decrease in QIV 2008 reached 20% with November and December being the most unprofitable. Thus, pulp cooking volume decreased by 26.3% as compared to December 2007, market pulp – by 25.9%, paper – by 15%, cardboard –by 14.1% and paper bags – by 45.8%. 

January 2009 also watched decrease in production. According to Russian State Statistics Service, market pulp production output fell by 32.5% as compared to December 2008, paper production – by 18.9%, that of cardboard and paper bags – by38.9% and 73.4% respectively. 

Today all enterprises are trying to survive by cutting down their costs and adapting their production to the demand on the domestic market. Large investment projects are postponed. According to Russian Association of Pulp and Paper Industry Organizations and Enterprises, in 2009 there will be seen negative dynamics in production output, export and import – import being mostly affected. 

Beyond crisis
However, experts find out other reasons of existing stagnation. Production output started declining in 2005 when there appeared producers of cheap raw materials from South America and China on the world market. Some experts consider that stagnation started even earlier in 2003 due to machinery depreciation at the Russina pulp and paper mills.

Business Support Bureau "Runa" www.runa.info