Anton Bogdanov, the Company’s COO, commented, “We made significant progress with Magistralny in the 3Q, shipping almost three times the amount of sawnwood to Japan as in the 2Q. We continue to increase volumes to Japan at an average sales price more than 35% higher than the Company’s previous sales to the Middle East and North Africa.”
Arkhangelsk (Northwest Russia) harvesting produced 25,023 cubic metres of sawlogs in 3Q 2013 compared to 27,612 cubic metres in 2Q 2013. Lower volumes were a result of suspending harvesting operations in unprofitable forest areas.
The Arkhangelsk sawmill (LDK-3) produced 34,079 cubic metres of sawnwood in 3Q 2013 compared to 28,635 cubic metres in 2Q 2013.
Boguchany (Eastern Siberia) harvesting produced 78,118 cubic metres of sawlogs in 3Q 2013 compared to 37,259 cubic metres in 2Q 2013.
The Boguchany sawmill produced 16,111 cubic metres of sawnwood in 3Q 2013 compared to 14,386 cubic metres in 2Q 2013.
To reduce losses in Boguchany, management was able to increase the average sawnwood price by 10% in September compared to July. Management also increased the average sawlog price for export by 34% in September compared to July. Despite the recent improvements, long-term profitability at Boguchany remains challenging.
Magistralny (Eastern Siberia) harvesting produced 89,017 cubic metres of sawlogs in 3Q 2013 compared to 21,416 cubic metres in 2Q 2013. Harvesting in forest lease areas controlled by third parties in 3Q 2013 reached 63,600 cubic metres (71% of total harvesting). Harvesting in third-party lease areas was increased in order to secure sawlogs suitable for Japanese production.
The Magistralny sawmill produced 19,226 cubic metres of sawnwood in 3Q 2013 compared to 12,649 cubic metres in 2Q 2013.
In 3Q 2013, the Magistralny sawmill continued to increase deliveries to the higher value market in Japan. The share of Magistralny sawnwood sales going to Japan in 3Q 2013 reached 62% compared to 27% in 2Q 2013 and 11% in 1Q 2013.
RusForest is a Swedish forestry company operating in Eastern Siberia and the Arkhangelsk region of Russia.
