Russia’s forest industry warns that up to 50% of companies could shut by the end of 2026 as lower export prices, higher transport costs and a strong ruble push producers deeper into losses.
Regional lawmakers and industry participants ask First Deputy Prime Minister Denis Manturov to approve a three-year moratorium on creditor-initiated bankruptcy cases in the sector, along with tax deferrals and a pause on debt collection for liabilities accumulated by January 1, 2026, Russian Kommersant newspaper reports, citing a draft letter prepared by a committee of the Arkhangelsk regional assembly.
The draft says even large companies in the region have exhausted their financial reserves, are operating at a loss and are starting to miss tax and other mandatory payments. It puts total sector losses over the past three years at more than 15 billion rubles. State support for exporters also drops sharply, with compensation for forest export costs falling from 7.6 billion rubles in 2023 to 550 million rubles planned for 2026, while subsidies for sea shipments from northwestern ports have ended.
The pressure follows Russia’s loss of the European market after sanctions imposed over Moscow’s invasion of Ukraine, while demand in China, now the main outlet for Russian lumber, remains weak because of the prolonged property downturn. China’s real estate investment fell 11% year on year in January-February 2026, sales of newly built commercial housing by floor area dropped 14%, and housing starts fell 23%, official data show. Russia is losing ground in China’s softwood lumber market. Its share of China’s softwood lumber imports fell by 5.7 percentage points year on year, while Canada increased its share by 2.9 points, Sweden by 2.6 points and Finland by 2.5 points, according to Lesprom Analytics.
Segezha Group, ULK Group, Titan Group and Lesozavod-25 are among the northwestern producers facing the most pressure. ULK owner Vladimir Butorin says the forest industry has “reached the bottom” and that a moratorium could help prevent further failures. He says transport costs for sawn timber rise to $70 per m3 from $30 per m3 in 2025, adding 2.4 billion rubles to ULK’s logistics bill. He also says overdue tax payments trigger a 20% penalty, while enforcement adds another 12%, increasing pressure on companies already in distress.
Segezha Group Vice President Nikolai Ivanov calls the issues raised by Arkhangelsk lawmakers critical for all of Russia’s forest regions. He proposes freezing changes to forest lease payment formulas for three years, blocking lease terminations tied to incomplete forest conservation work in 2022–2025, and banning any increase in timber export duties or the introduction of new export levies in 2026. The company also calls for export shipment subsidies to be restored and for rail tariffs on forest products to be cut with a 0.9 coefficient in 2026 and 2027.
