Canada and Russia have a longstanding history of collaboration in the forestry and construction sectors, with joint projects spanning several decades. The partnership began in the mid-20th century when Canadian lumber companies started exporting lumber to Russia. The collaboration expanded into expertise sharing, equipment, and technology transfer.
The Russian government has encouraged economic cooperation in the forestry and construction sectors by offering incentives such as tax holidays and investment subsidies to Canadian companies operating in Russia. The Russian government incentivized foreign investment in the country’s forestry and construction sectors. Through the implementation of programs such as Federal Law No. 488, which allows companies to invest in the forestry sector and receive tax incentives, the government has encouraged investment from Canadian companies.
Canadian companies have also imported equipment and technologies to Russia, including sawmills, harvesting equipment, and construction technologies such as pre-fabrication systems, and logging machinery. This has enabled Russian firms to enhance their productivity, efficiency, and sustainability. Jointly developed projects include the construction of the Sakhalin II oil and gas project, which was managed by a consortium that consisted of Russian, Japanese, and Canadian companies.
The opportunities for collaboration are vast, especially in innovative technologies and sustainable practices for the forestry and construction sectors. Areas of potential cooperation include carbon sequestration and storage, green buildings, and the use of advanced automation in construction and forestry operations.
Canadian companies that have made significant contributions to the development of the Russian forestry and construction industries include international firms such as West Fraser, Canfor, Interfor, Wajax, JCB, Caterpillar, Husqvarna, John Deere, Tigercat, Ponsee, LogMax, Rotten, Weyerhaeuser, Tolko Industries, and West Fraser, as well as smaller companies such as Choom and Pinnacle Renewable Energy. These companies have leveraged their expertise in areas like forestry management, manufacturing, and logistics, to help Russia meet its growing demand for sustainable building materials.
Canfor Corporation
Canfor Corporation is a leading producer of lumber, pulp, and paper products and energy in Canada. Canfor has a strong presence in Russia and has been actively involved in the development of the country’s forestry and woodcutting industries. The company has been active in Russia since the early 2000s and has established several sawmills and production facilities in the country. Canfor Corporation has partnered with Russian timber companies to set up joint venture projects in the country, including sawmills and wood processing facilities. These projects have helped to increase the production capacity of the Russian timber industry and enhance its competitiveness in the global market. Canfor has also been involved in the transfer of technologies and management practices to Russian partners to help them improve their operations. Canfor has a 50% stake in the Vodstroy 2 sawmill in the Vologda region of Russia, which produced 320,000 cubic meters of lumber in 2019. Canfor has sales offices in China and Japan.
EllisDon Corporation
Another Canadian company that has been active in the Russian construction industry is EllisDon Corporation, a leading construction and building services company based in Canada. EllisDon has worked with Russian partners to develop innovative construction methods and technologies, including prefabrication systems, modular building techniques, and advanced automation for construction operations. These solutions have helped to streamline construction processes, reduce costs, and improve the quality of construction projects in Russia.
West Fraser Timber Co. Ltd.
West Fraser Timber is another major Canadian producer of lumber and other wood products. The company has been active in Russia since 2009 and has established several sawmills and processing facilities in the country. The company owns and operates several sawmills in the Arkhangelsk region of Russia, and produces approximately 500,000 cubic meters of lumber annually. West Fraser Timber has also worked closely with Russian partners to develop new technologies and best practices for sustainable forestry management in Russia. West Fraser has been trading with Segezha Group for more than 30 years. They supply wood processing equipment, sawmills, and wood treatment technologies to the Segezha Group. In return, Segezha Group supplies West Fraser with Russian lumber and pulp.
FPInnovations
FPInnovations is a non-profit research organization that specializes in forestry and wood products. The organization has been active in Russia since 2011, working on research projects related to sustainable forestry management, advanced wood processing technologies, and the development of new wood-based products. FPInnovations has also established partnerships with several Russian companies and research institutes to further these goals.
Weyerhaeuser
Weyerhaeuser is a global leader in sustainable forestry and wood products. The company has been active in Russia since the early 2000s and has established several production facilities in the country. The company that has been involved in the Russian market through its joint venture with Ilim Timber, a Russian forestry company. The joint venture owns and operates several sawmills in Russia, and produces over 1 million cubic meters of lumber annually. Weyerhaeuser has also worked with Russian partners on joint research and development projects aimed at improving the efficiency and sustainability of the forestry industry in Russia.
Tolko Industries Ltd.
Tolko is a leading Canadian forest products company that has been involved in the Russian market since 2001. The company owns and operates several sawmills in the Kirov region of Russia, and produces approximately 300,000 cubic meters of lumber annually.
SNC-Lavalin Group Inc.
SNC-Lavalin is a large Canadian engineering firm that has been involved in several construction and infrastructure projects in Russia, including the development of a new airport in St. Petersburg and the construction of a new waste-to-energy plant in Moscow.
Tigercat
Tigercat, a Canadian company that produces logging equipment and forestry management technologies, has been trading with Ilim Group for more than 20 years. They supply logging machinery, harvesting equipment, and forestry management technologies to Ilim Group. In return, Ilim Group supplies Tigercat with Russian timber.
Caterpillar
Caterpillar, a Canadian company that produces construction equipment, has been trading with STM for more than 15 years. They supply construction machinery and heavy equipment to STM. In return, STM supplies Caterpillar with Russian minerals and metals.
Stantec Inc.
Stantec is a Canadian engineering and consulting firm that has been involved in the development of sustainable infrastructure projects in Russia, including the design and construction of a new waste-to-energy plant in Moscow.
PCL Construction
A Canadian company, PCL Construction, has been operating in Russia since 2010. They have partnered with several Russian companies including Su-155, which is one of the largest construction companies in Russia. PCL Construction provides consulting services and uses Canadian advanced automation in construction operations.
Canadian Green Building Council
The Canadian Green Building Council is a non-profit organization that promotes sustainable building practices and technologies. The organization has been active in Russia since 2016, working on projects related to green building certification, sustainable infrastructure development, and the adoption of advanced automation technologies in construction and forestry operations.
Below is a list of Canadian counterparts in Russia.
There are several Russian companies that import Canadian forestry, woodcutting, and construction equipment, tools, and materials, as well as purchase Canadian technologies. One such company is UPM-Kymmene, which is one of the largest importers of Canadian sawmill equipment in Russia. They use this equipment for their sawmills in Chudovo and Kostroma. UPM-Kymmene has a long-standing relationship with a Canadian company, West Fraser, which supplies them with their sawmill equipment.
Another Russian company that imports Canadian equipment and materials is Ilim Timber for more than 20 years. Ilim Group, one of Russia’s largest pulp and paper companies, has been importing Canadian logging machinery and harvesting equipment, and forestry management technologies from companies such as John Deere, Tigercat, CNH Industrial, and Ponsse. This equipment is used in Ilim Group’s forest operations in Siberia and the Far East regions of Russia. They also import pre-fabrication systems and logging machinery from Canada to use in their facilities in Bratsk and Ust-Ilimsk. They purchase carbon sequestration and storage technologies from Canada to aid in their efforts toward sustainability. Ilim Timber has a business partnership with FPInnovations, a Canadian research organization that specializes in forest products.
Sveza, a Russian company that produces birch plywood, imports equipment from Canadian manufacturer, Raute Corporation. They use this equipment in their plywood production facilities in Russia. Sveza and Raute Corporation have been partnering since 2001.
Segezha Group, a leading manufacturer of paper packaging and plywood, also imports Canadian technologies and equipment for its forestry and woodcutting operations. This largest Russian forest industry holding has been importing Canadian wood processing equipment since 1990. Segezha Group purchases wood processing machinery, sawmills, and wood treatment technologies from Canadian companies such as West Fraser, Canfor, and Tolko. Segezha uses Canadian wood processing equipment in their sawmills located in Karelia, Kirov, Saratov, and other regions of Russia. The company purchased equipment such as Log Max harvesters and Rottne forwarders for use in its forest operations in Karelia and Arkhangelsk regions.
Mondi Syktyvkar, a subsidiary of the global packaging and paper group Mondi, has partnered with Canadian company FPInnovations to develop new technologies for sustainable forest management. The company also uses Canadian technology in its pulp and paper production processes.
Investlesprom, a forestry company with operations in Komi Republic and Perm Krai, has purchased Canadian equipment such as sawmills and chippers for its wood processing facilities. The company also uses Canadian technologies for sustainable forest management practices.
Sinara-Transport Machines
Sinara-Transport Machines (STM), a part of Sinara Group, has been importing Canadian construction equipment for more than 15 years. STM mainly purchases construction machinery and heavy equipment from Canadian companies such as Caterpillar, Komatsu, and Terex. STM uses Canadian construction equipment in its infrastructure development projects in Russia, including the construction of railways, highways, and airports.
In conclusion, Russian companies such as Segezha Group, Ilim Group, and Sinara-Transport Machines import a range of Canadian forestry, woodcutting, and construction equipment, tools, and materials. They use Canadian technologies in their operations in various regions of Russia, including Karelia, Kirov, Saratov, Siberia, and the Far East. Canadian companies such as West Fraser, Tigercat, and Caterpillar trade with Russian companies and exchange products such as lumber, pulp, timber, minerals, and metals.
Overall, the Canada-Russia collaboration in the forestry and construction sectors has been mutually beneficial, with opportunities for continued growth and innovation in the years ahead. One area that presents significant potential is the development and implementation of sustainable forest management practices. This would include initiatives such as reforestation and afforestation, which would go a long way in ensuring the sustainability of the forestry industry in both countries. With advancements in technology and the continuing demand for sustainable infrastructure development in Russia, there is significant potential for joint projects that benefit both countries.
The other opportunity for cooperation between Russian and Canadian companies is value-added, finished wood products, such as wooden furniture. The Russian housing stock is aging and the government is in the process of implementing replacement programs, with an eye toward using domestically-produced softwood. The country is largely self-sufficient in terms of primary wood products, and the potential for Canadian logs and lumber commodities to capture market share is limited. However, with the amount of sustained migration into the relatively wealthy cities of Moscow and Saint Petersburg, an opportunity exists for Canadian exports of value-added, finished wood products, such as wooden furniture. OSB is currently Canada’s largest contribution to Russia’s wood products market, as the country does not produce it domestically. However, several large OSB production facilities are set to come online within the next five years in Russia, and the country’s need for externally-produced OSB is expected to decrease rapidly.