Thursday, March 10, 2022
Growing uncertainties in the wood business sector owing to the stern political decisions taken by Russia, forced prominent woodworking companies to take firm steps against business ventures in the state. Several woodworking companies such as Komatsu, UPM, BSW, REHAU, Metsa Group, EPAL stands with the people of Ukraine and thought alternatively as the situation has caused sudden disruption in the overall supply chain system and crippled the trading channel in the woodworking processing and manufacturing domain.
Impact of invasion
The geopolitical situation in Europe has permanently changed. This has wide-reaching human, political and economic implications in Europe and the situation is evolving rapidly in the woodworking sector.
Following the crisis management policy, Komatsu suspended shipments to Russia. Due to the current supply chain disruption and the uncertainty of the financial and economic situation, the company has decided to suspend shipments to Russia for the time being. Komatsu is one of the world’s leading manufacturers of forestry, construction, mining and utility equipment.
Besides forestry, machining, woodprocessing, war in Ukraine severly impacted on the pallet market. Pallet makers like EPAL stands with the people of Ukraine. EPAL supports the EU sanctions with the hope that they will contribute to bringing a rapid end to the war, the violence and the displacement of people. The production of EPAL Euro pallets is currently suspended in many factories in Ukraine due to the war.
Metsä Group has suspended operation in it’s only production unit in Russia, the Svir sawmill. Wood procurement in Russia for the Svir sawmill and imports to Metsä Group’s Finnish and Swedish mills has also been discontinued.
The sanctions and financial transaction restrictions resulting from Russia’s military actions in Ukraine are causing significant uncertainty in Raute’s business operations in Russia. Raute Corporation’s Board of Directors has decided to withdraw the 2022 financial guidance released on February 11, 2022. Due to the uncertain situation, the Board of Directors will not present new guidance for 2022 at the present time.
UPM BIOFORE, one of the frontrunner in forestry segment ceased deliveries to Russia owing to their aggression against Ukraine. UPM also announced their decision on suspension of purchasing of wood in and from Russia as well as the UPM Chudovo plywood mill operations for the time being, company said in a statement.
UPM will suspend purchasing of wood in and from Russia as well as the UPM Chudovo plywood mill operations for the time being, company said in a statement. The company is preparing a mitigation plan accordingly. UPM also informed on 3 March 2022 that it will cease deliveries to Russia.
BSW Group on the other hand stops purchasing raw material from Russia. The National Association of Manufacturers’ board of directors unanimously voted to denounce Russia’s actions in Ukraine and to stand with the people of Ukraine in their “fight to preserve freedom and independence.”
FSC remains deeply concerned about Russia’s aggressive invasion of Ukraine and stands in solidarity with all victims of this violence. FSC suspends all trading certificates in Russia and Belarus and blocks all controlled wood sourcing from this countries
The resolution expressed support for the economic and financial sanctions implemented against Russia and called for the removal of the Russian Federation from the World Trade Organization and the termination of permanent normalized trading relationship status with the United States.
Russia’s invasion of Ukraine is likely to impact global trade in the coming months. Increased sanctions against trading with Russia and difficulty with financial transactions will probably interrupt and re-direct shipments of forest products throughout the world. As a result, trade with Russia will likely decline, impacting long-established international trade flows of forest products, according to Wood Resources International Inc.
Tags: BSW, europe, invasion, Komatsu, Metsa Group, Rehau, Russia, UPM, wood, wood and panel, woodworking and manufacturing, woodworking industry
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