Bio-economy opens opportunities for the growth of boreal forest sector Dr.(For.) Ritva Toivonen University of Helsinki Kesla Oyj

Bio-economy: the main driver is the growing human population 2015 7,3 bill. ~20% 2015/ 2000 ~20% 2030/ 2015

Bio-economy drivers II: Climate change & market impcats 30-50% Increase in need of Food Water Energy Scarcity of non-renewable commodities Climate change: aridity, storms, and flooding; humand and economic impacts, policy interventions More efficient land-use and resource management Photo: NASA

Increase in demand, and trade of forest products Markets Housing, energy and packaging Substitution impacts, new material solutions Forest resources Boreal forests: relatively less populated areas with large forest resources (land-use issues), climate impacts ”milder” Efficient and sustainable management and logistic solutions for natural forests Plantations

Forest products global trade is increasing 2000-2013(Faostat) Roundwood production +4%, exports +13% Sawn wood production +8%, exports +11% Fibreboard production +230%, exports +76% Particle board production +23%, exports +18% Pulp production +1%, exports +47% Paper and board production +22%, exports +11% Value of foreign trade +60% (wood and forest industry products)

Russia has the largest forests (ha) in the world (Faostat) Region Forest Growing stock Fellings Industrial logs Fuel wood Sawn timber Bill. ha Bill. m3 Bill m3 Mill. m3 World 4,03 527 3,59 1,701 1,88 414 EU(28) 0,159 24,5 0,434 0,336 0,098 99,2 Russia 0,809 81,5 0,194 0,18 0,014 33,5 Finland 0,022 2,2 0,057 0,049 0,08 10

Relative forest capital and utilization (ha) (Faostat) Region Forest land per cap Growing stock Net growth Fellings** Difference growth-fellings ha/cap m3/ha World 0,6 131 - 0,89 EU(28) 0,32 154 4,7 3,7 1,0 Russia 5,76 101 1,3 0,3* Finland 4,13 100 4,6 3,0 1,6 * Doubling growth & fellings = +200 mill.m3/a + industrial production and exports ** area available for wood production

Finnish forests > 70 % of land area, ~23 Mha Private 13,5 M ha Industry 2 M ha State 6 M ha Others 1,4 M ha ~2,5-3 % of the forest area annually under harvesting operations (final fellings / tendings) Private landowners: ~ 650 000 persons / 380 000 holdings Private forest holding: on average 30-40 ha Gross incomes from wood sales: ~~ 1,5 Bill.€/a (exc. State) Current standing timber price ~ 47-56 €/m3 (sofwood sawlog), ~11-18 €/m3 (soft pulpwood) with bark

Intensive forest management case Finland Economics; profitability based on intensive management with long-term sustainability focus, main product: valuable sawtimber Ecology: sustainability (incl. Forest Certification ) Landscape: attractive landscape for recreation and living Management strategy fitted to the natural conditions of the site and based on detailed data on forest resources Road and forest road network – forests are easy to reach, prevention of fires, transportation of wood by trucks from forest to the industrial processing site

Intensive management of small units – productivity & profits sustainably: case Finland Long-term management plans by holding, management unit avg. 0,5-2 ha Main management strategy: even-aged stands (pine/spruce/birch mix) Rotation avg. 50-100 years, 1-3 tendings during rotation Active reforestation after harvest: planting / seeding / natural reforestation Active tending of young stands

Target: economic profitability, sustainability through efficiency Intensive and efficient management Sustainability Valuable saw timber Thinnings: from ~ 2000 seedlings/ha …to 500-700 stems/ha 100% mechanized logging and off-road transportantion, CTL method Energy wood 8 Mm3/a

Mechanization and good infrastucture - key elements Mechanized harvesting and soil preparation Mechanized planting & tending of young stands - under development Dense forest road network: main transportation to industrial sites by trucks Soil conditions: fertilization/water conditions Data: Forest management planning based on frequently collected data

Russian forests sector provides major opportunities for growth Potential to increased production and incomes Intensive management and logistic solutions tailored and fitting to local culture and circumstances. Potential for growing exports Growing global demand for forest products (traditional and ”new”) Domestic market

Thank you! Kesla Oyj Ritva Toivonen Dr. (For), Research co-ordinator, University of Helsinki, Dept. Of Forest Sciences Tel. +358 40 526 8412 ritva.toivonen@helsinki.fi / ritva.toivonen@dnainternet.net Ilari Yli-Ruka Regional Manager, Kesla Oyj Russia and CIS-countries Tel. +358 40 530 1229 Tel. +7 921 645 0663 email: ilari.yliruka(at)kesla.com