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

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

3. 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;
Builders;
Project developers;
Financial sector;
Environmental organisations
Latvian Forest Industry Federation
Latvia University of Agriculture
Forest Sector Information Centre
Forest and Wood Product Research and Development Institute;
Association "Zaļās mājas"
Institute of Wood Chemistry;
Management of Measurement and Inventory of Latvian Timber Products
Technological platform of Latvian forest sector
Forestry Research Institute "Silava"
Latvian Forest Industry Federation (LFIF) in order to to represent sectoral interests and to coordinate them consolidates six business associations of the woodworking insustry. Accordingly, the whole woodworking complex is represented in the LFIF – from forestry and wood transportation services to production, trade and export of different wood products.
Since the forestry sector shapes the common viewpoint, the LFIF has very good cooperation with forest owners and managers thus establishing organisations shown in the centre of the diagramme and by engaging in processes promoting joint and integrated development of the forestry sector.
For its part wider intersectoral cooperation is promoted through the association "Zaļās mājas" that has initiated a discussion on wider usage of wood thus promoting opportunities for the society to live in environmentally friendly and pleasent environment.
Competence Centre
Forest Owners' Association
Latvian Confederation of Forest Owners and Managers
Latvian private forest owners and unions
A/s "Latvijas Valsts meži" - manager of state-owned forests

4. 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
LFIF, Forest Owners' Association and its members are closely integrated and successfully take part in related European organisations and movements. It means that the Latvian forestry sector does not represent a local viewpoint but it expresses common opinion of the sector and its branches in the whole EU in terms of its development vision.

5. Present potential of the sector in year 2007
Number of enterprises ~ 4 000;
Employed ~ ;
End-product value of the sector ~ 2.14 billion Euro
Export of the sector ~ 1,43 billion Euro;
Share of GDP ~ 4.7%

6. Processed by largest Latvian sawmills by years (m3)
efficiency strategy
By restructurisation of production, 77% of Latvian woodworking industry's turnover is accounted by the largest producers which have chosen efficiency strategy for their development, invested in modern, high-capacity technologies, and mainly export their products. In its turn, small and medium-size sawmills are focusing on manufacturing of "niche products" and hardwood sawn semi-finished materials, service strategy and their competitiveness is based on flexible approach to changes in the market demand. Recently, good development possibilities for small producers are ensured by rapidly developing local construction market, as well as increase in the demand for other wood products.
Niche/service strategy

7. 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

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

9. 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 thousand M3 in 2007 and second phase of construction is continuing (to reach the capacity of 500 thousand m3)
One of the woodworking industry sectors which, due to huge investments, during the last years has developed mostly is production of wood-based panels, and in 2006 production of these panels accounted for approximately 12% of the industry's total export value. Latvia has taken a stable position as the largest plywood producer in Eastern Europe, but recently previously unseen investments have been made also in production of particle boards, oriented strand board s(OSB) and medium density fiberboards (MDF).

10. 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
Generally, primary processing sector of wood in Latvia has sufficiently modern technological basis, reaching a production capacity balanced with availability of resources and which according to both productivity and quality of output corresponds to the requirements of the global markets. Thus products of the primary processing of wood have become a stable basis both for export and further processing, as well as development of manufacturing of even higher value added products right here in Latvia. Significant foundations have already been established also in this area and joinery products, wooden house manufacturing is also rapidly developing, furniture production sector is restructuring.

11. 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.
The development was mostly promoted by booming local construction market. Investments are made in many Latvian small and medium-size regional enterprises in order to develop modern joinery products - wooden windows, doors, as well as manufacturing of high-quality structures and wooden houses. At the same time further processing products of wood manufactured in Latvia are taking higher and higher positions also in the European and other markets of the world.

12. 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

13. Growth of the Latvian forestry sector: export and local market, Bn LVL

14. Forest management (full cycle)
Forest Sector
Stumpage sales
300 Million €
End product
2 billion €
Value-adding process
C O N S U M E R
Forest management (full cycle)

16. Export of Forest Sector by Countries in 2007

17. Current topical issues
Increasing efficiency of forestry and its resource base
Increasing proportion of value added products
Investment in increase of energy independence
Main factors that in near future will determine development possibilities of the forestry sector have to be mentioned. First, it is investment available for development of high value added products and manufacturing technologies. Secondly - issues of energy industry. Unlike other countries of Central Europe in Latvia 39% of end consumption of energy-resources are needed for heating of buildings alone and with optimum use of renewable resources it is possible to increase proportion of heat obtained from current 29% to 45% of total energy consumption. Thirdly, the place and importance of the forest industry has to be considered in the context of regional development. It is important to understand that in many areas it is possible to cultivate both - traditional crops and forest, and from the point of view of regional rural development these questions have to be dealt with applying an integrated approach.

18. Thank you for your attention!
Kristaps Klauss
Mob