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Pulp and Paper Industry

Russia has predominantly a huge Pulp and Paper Industry. The Russian paper industry is the second largest in the world. The Pulp and paper industry graph in Russia has continued to show an upward trend since 1999. In 2004, according to government statistics Russia produced more than 6.8 million tons of paper and cardboard products. Out of the total production more than half of the production (about 58%) was exported.

According to RAO (Russian Association of Pulp and Paper Mills and Institutions) Bumprom, Russia’s Pulp and Paper Industry has increased its paper production by 5.4% (about 3.9 million tons) and the production of cardboard, which also includes production of container board by 7% (about 2.9 million tons) since 2004. The major factor contributing to the growth in the production of paper is the rapid expansion of packaging industry. Russia has a significantly large packaging industry. From 1999 till 2004 the Primary focus of Russian Pulp and Paper industry was to meet the increasing demand for the raw material of Packaging industry.

One of the most important aspects of Investing in Russian Pulp and Paper Industry is that the period of gaining valuable returns on investment in the industry is long as compared to investing in other industries. However, in spite of the slow returns on investments, the Pulp and Paper Industry in Russia continues to be one of the leading foreign investment attracting industries in the country. The leading factors that contributing to make Russian Pulp and Paper industry a lucrative industry for foreign investment is as follows:

  1. Russia has state-of-the-art facilities for manufacturing paper.
  2. The country has a vast experience in the industry; Russia has great expertise in manufacturing paper and paper products.
  3. Russia is one of the leading importers of wide range of paper pulps from around the world.
  4. Russia has huge forest resources. Russia accounts for 20% of forest resource in the world. The Russian forests have a wide variety of trees a raw material for pulps.

Owing to the above mentioned benefits, foreign investors investing in Russia’s pulp and paper industry are sure to benefit greatly and gain valuable returns on their investments.

Even though Russia produces a large amount of paper and paper products, Russia’s pulp and paper industry currently does not produce coated paper, calendared, multiplex, laminated, and other impregnated papers. Russia mainly depends on imports for these products. These products account for more than 40% of Russia’s pulp and paper products imports. The volume of imports for these products is high since the local manufacturers lack investment capabilities; they are unable to stand the stiff competition form foreign manufacturers and manufacturing units lack state-of-the-art technology required for manufacturing these products.

Thus, Russian Pulp and Paper industry offer a great platform for foreign investors to not only invest in manufacturing and exporting of paper and paper products but also in importing of wood pulps and coated paper into Russia. The industry shows great potential in the future and continues to attract foreign investment.

 

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