US wood pellets are gaining market share in Europe as Russian pellets vanish
Russian invasion of Ukraine
The Insight Group has acquired 100% stake in John Deere Financial LLC, the Russian leasing subsidiary of Deere & Co., the world's largest manufacturer of agricultural machinery and equipment.
EU sanctions led to a fall in wood processing in the country and, accordingly, the demand for wood raw materials.
On February 15, the Russian government commission approved a deal to sell three Swedish IKEA factories in Russia to two Russian companies.
The sale is subject to regulatory approval in Russia and is not easy to obtain. Austrian Mondi's deal to sell the plant in Russia was rejected by the government, which is demanding a 50% discount on the price of the asset.
The withdrawal of foreign companies from Russia in 2022 may lead to a shortage of certain timber products, which will gradually be covered by Russian-made products. However, the quality of products will be lower due to the cessation of supplies of Western consumables and components.
The production capacity of the MM-Efimovsky sawmill is 380 thousand m3 of lumber and 57.6 thousand tons of pellets per year.
In the first eleven months of 2022, the plywood production decreased 28%.
After the imposition of EU sanctions, the company was left without markets for wood pellets. The company fired about 1.5 thousand out of 5.4 thousand employees.
In the absence of demand for wood pellets in the domestic market, Russian companies began to stop pellet factories.
This gain was achieved before the abolition of the MFN regime in trade. In May-July, the volume of supplies fell by 62%, and the value decreased by 48%.
The cash and debt free sales price is Euro 151 million.
Maersk to divest its 30.75% shareholding in Global Ports Investments PLC. With the divestment, company will no longer be involved in any entities operating in Russia or own any assets it the country.
Plywood and pellet production suffered the most, collapsing by 42.4% and 34.8%, respectively.
Ponsse Plc’s cooperation negotiations pursuant to the Act on Co-operation within Undertakings have been completed today.
Since the second quarter, exports of Russian lumber to the UK have completely stopped, while supplies to the EU have fallen sharply.
In the first half of 2022, Russian plywood exports to the European Union fell 31%.
Mondi's London-listed shares jumped 11% on the news, as the company said it will distribute a cash balance of 16 billion rubles ($250 million) to shareholders.
UK plywood imports increased by 11.9% when comparing Q1 2022 to Q1 2021, reaching 477,000 m3. Hardwood ply volumes were driven mostly by China, which continues to be the dominant source of hardwood ply products. Russia’s prominence as a source of hardwood plywood has quickly fallen away amidst trade sanctions.
Sawmills in the North-West of Russia began to stop production due to the inability to redirect supplies from Europe to the East. Since July 10, they have been unable to export to Europe due to sanctions imposed in response to Russia's invasion of Ukraine.