The WoodProcessing Industry in Latvia Kristaps Klauss Latvia

The Wood-Processing Industry in Latvia Kristaps Klauss Latvia Forest Industry Federation 1

FOREST AND RELATED SECTORS Chemical Consultation Industry Service Energy Forestry State Authority Information Technologies Tourism, Recreation Education FOREST AND FOREST PRODUCTS Packaging Science Building Woodprocessing Architecture, Design Transport Logistics,

Cooperation in Forest cluster Latvian Association of Independent Timber Harvesting Companies Latvian Union of Timber Harversting Companies Latvian Timber Producers’ & Traders’ Association Latvian Association of Wood Processing Companies and Exporters Association "Latvijas Mēbeles" Association "Latvijas Koks" Architects; Latvian Forest Industry Federation Builders; Forest Sector Information Centre Project developers; Financial sector; Environment al organisations Association "Zaļās mājas" Latvia University of Agriculture Forest and Wood Product Research and Development Institute; Management of Measurement and Inventory of Latvian Timber Products Technological platform of Latvian forest sector Institute of Wood Chemistry; Forestry Research Institute "Silava" Competence Centre Forest Owners' Association Latvian private forest owners and unions Latvian Confederation of Forest Owners and Managers A/s "Latvijas Valsts meži" manager of state-owned forests 3

Participation in international organisations • C. E. I. – Bois – European Confederation of Woodworking Industries • U. E. A – European Furniture Manufacturers Federation • FEIC – European Federation of the Playwood Industry • EPF – European Panel Federation • EOS – European Organisation of the Sawmill Industry • CEF- Confederation of European Forest Owners • ELO – European Landowners' Organisation • EUSTAFOR – European State Forest Association • Forest Advisory Committee of the European Comission 4

Present potential of the sector in year 2007 • Number of enterprises ~ 4 000; • Employed ~ 54 000; • End-product value of the sector ~ 2. 14 billion Euro • Export of the sector ~ 1, 43 billion Euro; • • Share of GDP ~ 4. 7%

Processed by largest Latvian sawmills by years (m 3) m 3 600 000 efficiency strategy 500 000 400 000 300 000 200 000 100 0 2006. Niche/service strategy 2007. 6

Trade development of round timber I LFIF strictly believes that an impartial round timber measurement system should be developed in Latvia! Because such system is: Fair Lawful Transparent Contributing to healthy competition Ensures development in timber trade Relatively inexpensive

Trade development of round timber II Buyers of Latvian timber Sellers of Latvian timber Association of Latvian Timber Sellers Timber Buyers 50% Latvian Timber Measurements. . , Ltd. 50% VMF Latvia, Ltd. 50% VMF Qbera

Primary processing Board manufacturing • Significant investments have been made in the production of particle-fibre boards, plywood and OSB, namely - new production units have been established • Oriented strand board (OSB) capacity 250 thousand M 3 in 2007 and second phase of construction is continuing (to reach the capacity of 500 thousand m 3) 9

Primary processing • In our opinion primary processing in Latvia is modernised and corresponds to international requirements regarding productivity and quality, and forms a stable basis for export and further development of value added products 10

Further processing • With significantly growing local consumption in the construction sector, it fosters also the development of: – Building joinery products: windows, doors, stairs etc. – Manufacturing of wooden frames and log houses; – Production of furniture, including sectional, customised. 11

Dynamics of development • ~ 30% of all investments in processing industry were transfered to woodworking industry. • In Latvian as well as in European and world woodworking industry changes have taken place in machinery and technologies and products oriented on combined usage of smaller diameter and wider range of wood species. It allows to widen the base of resources, provided the whole forestry complex reacts accordingly 12

Growth of the Latvian forestry sector: export and local market, Bn LVL 1, 8 1, 6 1, 5 1, 4 1, 2 1, 1 1, 2 1, 0 0, 8 0, 6 0, 8 0, 4 0, 2 0, 3 1, 3 Total 1, 0 Export 0, 9 0, 5 Domestic 0, 5 0, 8 0, 4 0, 0 2005 2006 2007 2008 13

Forest Sector CONSUMER End product 2 billion € Value-adding process Stumpage sales 300 Million € Forest management (full cycle)

Structure of Forest Sector Export Products % 100 80 60 40 20 Sawnwood Roundwood Furniture 07 20 06 20 05 20 04 20 03 20 02 20 01 20 00 20 99 19 98 19 97 19 96 19 95 19 19 94 0 Other products of forest sector export

Export of Forest Sector by Countries in 2007 16

Current topical issues – Increasing efficiency of forestry and its resource base – Increasing proportion of value added products – Investment in increase of energy independence 17

Thank you for your attention! Kristaps Klauss E-mail: kristaps. klauss@latvianwood. lv Mob. +371 29473857 18