Up to Half of Russia’s Forest Companies Risk Bankruptcy by End-2026

Moscow, Russia – April 2026 — Up to 50% of Russia’s forest industry companies could face bankruptcy by the end of 2026, as falling export prices, rising transport costs and currency pressures deepen financial losses across the sector, according to industry representatives and regional officials.

Lawmakers and industry participants have appealed to Denis Manturov to introduce emergency support measures, including a three-year moratorium on creditor-initiated bankruptcy proceedings. The proposal, reported by Kommersant, also calls for tax deferrals and a suspension of debt collection on liabilities accumulated before January 1, 2026.

A draft letter prepared by a committee of the Arkhangelsk regional assembly states that even large forestry companies have exhausted financial reserves, are operating at losses and are beginning to miss tax and mandatory payments. Total sector losses over the past three years are estimated to exceed 15 billion rubles.

State support has also declined significantly. Compensation for forest export costs is set to drop from 7.6 billion rubles in 2023 to 550 million rubles in 2026, while subsidies for sea shipments from northwestern ports have been discontinued.

The downturn follows Russia’s loss of European export markets after sanctions imposed in response to the Russian invasion of Ukraine. China has become the primary destination for Russian timber, but demand there remains weak due to a prolonged property sector slowdown. Official data show declines in real estate investment, housing sales and construction starts in early 2026, weighing on lumber demand.

Russia is also losing market share in China’s softwood lumber imports, with competitors including Canada, Sweden and Finland expanding their positions, according to Lesprom Analytics.

Major producers such as Segezha Group, ULK Group, Titan Group and Lesozavod-25 are among those under pressure.

ULK owner Vladimir Butorin said transport costs for sawn timber have risen sharply, reaching $70 per cubic meter from $30 in 2025, significantly increasing logistics expenses. Meanwhile, penalties on overdue tax payments further strain companies’ finances.

Nikolai Ivanov, vice president of Segezha Group, described the situation as critical for forest regions nationwide. He proposed freezing changes to forest lease payment formulas, halting lease terminations linked to incomplete conservation work, and avoiding any increases in timber export duties in 2026. Industry participants also called for the restoration of export subsidies and reductions in rail tariffs for forest products.