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. Last Updated: 07/27/2016

Partners Hope to Revive Timber

A leading Russian bank and timber exporter Thursday announced plans to solicit about $1 billion in investment for the industry over the next 10 years.

The agreement between Stolichny Bank and the Exportles company aims "to boost exports of Russian timber on the world and national markets," Alexander Smolensky, president of Stolichny Bank, told a news conference.

New export-oriented timber-processing operations will be established in the Far East, Karelia and the Moscow region, officials said, although they would not disclose which projects would be sponsored under the agreement.

Smolensky said Stolichny would provide $400 million for the projects and the World Bank and the European Bank for Reconstruction and Development $200 million, with the rest coming from a number of domestic and international financial institutions.

Russia possesses 20 percent of world forest reserves and 50 percent of world pine reserves. Timber exports amounted to more than $2 billion in 1994.

Alexander Krylov, president of Exportles, said the agreement would enable the company to reverse a recent trend of diminishing trade. "We have to return to our dominant positions on the Russian market and on the world timber market," he said.

Igor Sankin, president of the Timber Exporters Union, said the plan could help revive an industry that has failed to receive substantial funds from either government or foreign investors.

"Out of 600 billion [$132.5 million] rubles allocated for the industry this year, the government released no more than 100 billion," Sankin said. "And foreigners invested only into fast-trade operations that could not help develop the industry.

"We are happy we found a Russian bank that was ready to support the industry," he said.

Sankin said investment would go toward modern production lines for exporting high-quality logs and planks to Japan, Germany, Finland and the United States.