Russia's Pulp and Paper Industry Reports First Half 2006 Growth

Nov. 27, 2006 - Russia increased its output of pulp, paper and board in the first half of 2006 by 5.3% compared to the same period a year ago, according to Paper and Life magazine.

Although pulp and paper production remained nearly the same in the first half, cardboard production showed substantial growth.

Paper and Life said timber enterprises churned out still less pulpchips, which currently constitute up to 13% in the structure of raw wood for Russia's pulp and paper industry. Each year Russia exports 10 - 12% more pulpchips, which pressures raw material supplies for local mills.

The price index for the timber sector grew 4 - 12% during the first six months of 2006. Costs of chemicals, energy, and transportation rose at a faster rate than pricing for pulp and paper products, and the industry's profitability dropped 0.4%, Paper and Life said.

During the first six months, the output of newspaper constituted 50.6% of the total paper volumes. Newsprint producers (Volga, Kondopoga, Solikamskbumprom) provided 63.8% of the total production growth.

Industry analysts predict price increases for newspapers through the end of 2006 and the beginning 2007, reflecting inflation rates in the market.

In the first half, Russia exported 811,200 tons of market pulp; 26,000 tons less than the same period in 2005, while the revenue increased $4.9 million to $361.1 million. The same tendencies are seen for the segments of newspapers and printing papers. The export volumes of kraft papers and kraft boards remained nearly the same. The export of test liner dropped considerably, Paper and Life said.

While export volumes decreased, Russian pulp, paper and board producers increased the output of the above mentioned products for local markets.

The structure of imports remained the same:

  • 20.2% for tissue and hygienic products
  • 19.6% for coated papers and boards
  • 19.3% for papers and boards with coating
  • 12.6% for containerboard products
  • 5.7% for wallpapers
  • 5.3% for cigarette papers
  • 4.9% for printing and writing papers and boards

During the first six months, the pulp and paper industry of Russia exported products for $1064.8 million ($3.2 million more versus the same period a year ago), and imported for $1185.7 million (24.5% more than the same period in 2005).

SOURCE: Paper and Life

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