AS Hekotek is a mechanical engineering company founded in 1992; its main operations include designing and producing woodworking technology installations. The first deliveries in Russia were performed in 2001 with Hekotek machinery to operate currently in different regions – from Karelia up to the Irkutsk region. Unfortunately, the company also suffered from the world economic crisis the influence of which was mostly felt in timber and woodworking industry. We asked Heiki Einpaul, Hekotek managing director, about the current situation.

World crisis affected more or less all actors in the market. How would you characterize the current situation?

Any situation has its advantages and disadvantages. In my opinion, crisis is a time for searching new ways and understanding for further development.

All in all, crisis is a normal and regular event, all clever people understood that it would be and just hoped for the better. Unfortunately, like everything unpleasant it came unexpectedly. Today a lot is said about what could be done otherwise so that the consequences were not so serious. Everyone is wise after the event… The Swedes, for example, always “chill down” their economy and crises, not so large-scale, of course, are quite often there.

Your company is a supplier of sawmilling solutions. What are in your opinion possible perspectives in sawmilling sector development? 

Already in May 2009 the situation in the sawmilling market started stabilizing, as measures taken by the governments in the European countries led to demand for building materials. However, it is not so easy to find the supplier of high quality sawn timber – facilities in the sector have been significantly reduced (only in Estonia two large sawmills are stopped and being dismantled). Thus, the companies that managed to keep their position in the market, have good perspectives.

Unfortunately, in Russia it applies to those companies that before the crisis managed to modernize their production facilities or came to the final stage of their investment projects realization. Projects of new facilities construction are vital for general development of Russia. However, today realization of such projects is far from being real, as already the initial stage of the project (infrastructure development) is cash-consuming. Existing situation in the financial market is not attractive for new investments as well due to high interest rates and strict bank terms.

It is worth mentioning, that foreign investors that could invest in Russia are seriously restrained by complexity of bureaucracy procedures, which significantly perplexes realization of investment projects. Uncertainty is one of the main risk factors for investors. Smaller companies just couldn’t overcome bureaucracy obstacles. However, it is the activity of small companies that played a significant role in the world economy development (especially in the Scandinavian countries). 

Is the second wave of the economic crisispossible? How much time does it take to return to the previous level?

I guess, it won’t be neither worse as it was, nor sharp and quick growth. The situation will be developing as it was 7 years ago – we are to grow slowly and gradually. It can take about 3-4 years. Currently Hekotek doesn’t aim to reach indexes of 2008 year that became for the first time a banner year for our company (and maybe not only for ours). Currently our capacities must correspond to the market demands. I have to admit, that we went back 7-10 years. However, it wasn’t so bad then, and now it is even better despite the crisis.

Business Support Bureau "Runa"  www.runa.info 

For more information about Russian timber industry, please see MOST  (Market Overview. Statistics. Trends) - regularly updated digest of the situation in the Russian timber industry! New edition in September 2009!