Russia’s largest timber conglomerate, Segezha Group, is cutting staff at its largest mills, as softening Asian demand is starting to take its toll. Wood Central understands that Segezha is planning to axe 350 of the 1,000 positions at its Novoeniseysky Wood-Chemical Complex in Lesosibirsk, in Krasnoyarsk Krai, the latest in a series of sweeping cost-cutting measures.
Until 2022, Europe’s high-margin markets underpinned its operations; however, thanks to Wartime sanctions, Segezha instead pivoted toward Asian buyers—a strategy now hampered by fierce price competition from Chinese importers and chronic bottlenecks on the Russian Railway.
Segezha’s first-half results underscore the severity of the downturn. Revenue fell 8% year-on-year to 44.8 billion rubles, while adjusted OIBDA plunged 54% to 2.6 billion rubles. The group reported an adjusted net loss of 15.9 billion rubles—a 68% increase from the first half of 2024. Meanwhile, Production volumes mirrored the financial slide. That includes lumber shipments, which dipped 6% to 1.0 million cubic metres, with China accounting for 78% of exports, and birch plywood deliveries fell 7% to 84,000 cubic metres. The only bright spot was in fuel pellets and briquettes, where output more than doubled to 101,000 tons, driven by demand in Asia and domestic heating.
The cutbacks come after Wood Central revealed that a coalition of Russia’s largest timber companies is facing shutdowns, prompting the Russian Association of Organisations and Enterprises of the Pulp and Paper Industry to write to Putin’s Industry and Trade Minister, Denis Manturov, urging the government to allow merchants to set up an “operational headquarters” to “normalise the industry.”
The letter, shared by Russian publication Kommersant in late July, warns that the timber and forest industry “is going through one of the most tense periods in (it’s) modern history,” with total volumes of timber harvesting down 13% in 2024 compared to 2021 (before Ukraine sanctions), with pulping (down 3%), sawn timber (down 11%) and plywood (23%) amongst the most brutal hit.
- For more information about the impact of Russia’s war in Ukraine on the global timber supply chain, click here for Wood Central’s report.
