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A woodcutter's axe was heard in the forest…

Михаил Казанцев
Михаил Казанцев
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A woodcutter's axe was heard in the forest…

Will it continue to sound in Komi?

Timber Industry Plant «Mondi Syktyvkar» (hereinafter – Mondi), a subsidiary of the multinational Mondi Group, likes to report on how «eco-friendly» and, of course, responsible it is in relation to the region in which it operates. I already wrote about how the company behaved in a real environmental «fire». Now let's take a closer look at how things are with what is called «social responsibility».

«It is important for the Mondi Group to understand how its logging activities are perceived by all stakeholders in the Komi Republic,» states one of the official documents of the multinational company. There is no doubt that the negative drift in the «perception» of the company's activities in the region is well known to its management. Now, in a period of not only economic, but also total uncertainty, for an enterprise that is really interested in continuing to work in Komi, it would be useful to take care of strengthening a positive reputation by making adjustments to some of its business practices. For example, in the logging industry.

The lion's share – 96 percent – of the 2.1 million hectares of forest land leased by the Mondi Group is located in the Komi Republic. Wood for Mondi is harvested in the districts of Udora, Kortkeross, Ust-Kulom, Syktyvkar, Koigorodok, Sysola, Priluz, and Troitsko-Pechorsk. Extensive geography – all local transport accessible forest territories.

I am quoting the company once again:

«Since 2009, Mondi SLPC has completely switched to mechanized harvesting using modern imported equipment. Since 2011, the entire billet has been transferred to the CLT technology. As a result of the work to improve the efficiency of logging, their annual volume (within the boundaries of the Mondi forest lease) reached the level of 2.8 million cubic meters. Up to 25 percent of the volume of forest products is sold to third-party organizations.»  It is said further in the same document that for three years – from 2009 to 2011 – the annual consumption of wood at the plant increased from 2.9 million to 3.5 million cubic meters. At the same time, «half of the plant's needs are met at the expense of pulp wood and wood chips purchased from local suppliers».

The so-called pulp wood is a small and thin forest. In our latitudes, it is mainly aspen and birch – which is the raw material for Mondi. Purchase prices for this raw material have been kept at a consistently low level for years, while the cost of Mondi products is steadily growing. The cost of logging is also growing, because fuel and spare parts are becoming more expensive, and wages are increasing.

It is not surprising, therefore, that in the last decade, local loggers are saying that they are systematically squeezed out of the market. Since 2011, the annual harvesting of pulpwood falls short of one million cubic meters and continues to decline. The same situation is with the production of lumber. During the same period, the number of logging and sawmilling enterprises decreased tenfold. The survivors are on the verge of survival.

Having the ability to keep the purchase prices in the Komi Republic at a low level, Mondi obviously can afford additional purchases of pulp wood in the Kirov, Vologda and even in the Leningrad regions!.. It is not necessary to specify that transport costs increase the cost of this raw material by an order of magnitude compared with the local one. It seems that a large enterprise is purposefully destroying the logging industry in the region...

But why cut your own throat? The paradox is apparent, and in fact Mondi behaves as if it were already a monopolist. I see obtaining the exclusive right to forest use in the south of Komi by the combine coming, that is, the right to process the forest and as a consequence, to the entire pulpwood.

What can this lead to? Most small businesses will cease to exist, and the survivors will continue to work only as contractors for the industrial giant. And, of course, the monopolist will be able to define the price for the contractor. The closure of small logging enterprises will leave private sawmills, which form the basis of the economy of sometimes entire districts, without raw materials. Then monopolist Mondi will raise the price of the sawmill, which will undermine the entire local woodworking sector.

What is fraught with the growth of unemployment in the forest areas of the Komi Republic, is clearly seen in the example of the villages of the Ust-Kulom District (which already gained the «glory» of the most alcohol consuming in the republic). Logging was carried out manually until very recently there. But Mondi came, hired specialists from the cities, and effectively deprived the locals of their jobs. The massive job cuts in the south of the Komi Republic are the result of modernization, the very «cut-to-length», when felled trees are cut into wood assortment directly at the cutting area. Of course, the workers are now required many times less.

So far, the antimonopoly authorities have not seen anything of concern in the activities of Mondi, and in response to appeals from the loggers, they have stated that the price set by Mondi for the same pulpwood corresponds to the market situation. It is quite possible that this reaction reflects the authorities' attitude towards the problem in general. And if this is still understandable in terms of short-term benefits, then the social-political prospect of such an attempt to hide your head in the sand is of concern. What, in the end, can the axe of a woodcutter driven into despair fall on?..

Local victories of the working people do not cancel the general bleak situation for them. But such isolated examples are valuable experience of self-organization for others. In the summer of 2012 (if there was a more recent example, it probably did not receive wide publicity), the Ust-Kulom Forest Association managed to obtain 45 thousand cubic meters of forest leased from Mondi. However, even here the monopolist could not resist the temptation of the monopolist and charged 180 rubles per cubic meter at a real price of about 100 rubles.

It remains to be stated that the probable monopolization of logging in Komi is a benefit only for Mondi, but for the republic and its residents means a lot of economic and social problems.

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