Another Industry Has Collapsed In Russia
12- 15.07.2025, 18:46
- 22,444

Mass layoffs are coming.
Another sector of the Russian economy is collapsing under the weight of sanctions, falling demand and a strong ruble. Timber producers in Russia's billion-dollar industry are openly declaring the risk of plant shutdowns and mass layoffs.
Association of leading companies in the pulp and paper industry has sent an urgent letter to Russian Industry and Trade Minister Anton Alikhanov, warning of the possibility of complete paralysis of production, Russian "Kommersant" writes.
People are losing their jobs, mass layoffs are coming. The document says that the industry is going through one of the most difficult periods ever observed.
Last year alone, logging in Russia fell by 13% relative to pre-war 2021, lumber production fell by 11%, and plywood production collapsed by a quarter.
European Union has left, China does not save After the European market left, the first blows came to mechanical wood processing companies.
Segezha Group and ULK in 2023-2024 began to massively restructure debts and curtail production.
The crisis has now reached pulp exporters. Since the beginning of 2025, the ruble has strengthened against the dollar by 22%, the cost of logistics has risen sharply and the profit tax has increased. Under such conditions, many companies are becoming unprofitable.
Even China, on which the Russian authorities pinned their hopes, is not compensating for the losses: the country is still stagnating in construction, and the trade war with the United States is restraining business activity.
Domestic demand in Russia is also falling, making the situation almost hopeless.
No sales - no profit
"There is no sales for such products as pellets, balances and wood chips. Prices for lumber are constantly falling," admits Vladimir Butorin, CEO of ULK.
Segezha Group says it has simultaneously faced falling prices, a shortage of orders and rising tariffs.
"Difficulties with exports, problems in the construction industry, falling demand and rising costs," the company says.
Signs of a deep collapse
Economists state that the timber industry risks repeating the fate of the Russian car industry and aviation, where production has stopped or stagnated.
"The strong ruble is killing exports and making Russian goods uncompetitive. At the same time, cheap imports fill the domestic market. Without protectionist measures, enterprises will close one after another," says Denis Kondratyev, head of the Center for System Solutions.