Russia’s Segezha Group Aims to Expand Exports to India

Top management of the Segezha Group considers India as one of the most attractive and promising areas for business, the company said in a September 6th press release.

As part of the Eastern Economic Forum, member of the board, vice president for external relations, and head of the Board Materials and House Building Division Nikolay Ivanov took part in the business dialogue titled the “New contours of international cooperation: Russia–India.”

During the Forum dialogue, Nikolay Ivanov said:

“Working with India in the context of the changed global situation allows our business to realize and explore significant potential in this strategic region. The current state of export volumes to India is the beginning of a long promising path. Currently, only 3% of Russian forest industry products are supplied to India. In the structure of Segezha Group exports, India’s share is only 1%. However already this year we plan to increase the volume of deliveries to this region by 50% compared to 2022. Of course, these are comparatively small values compared to the huge potential that we see today.”

“We would like tariffs on the import of Russian forest products to India to be no worse than for other exporting countries. For example, for plywood, these rates today reach 30%. On paper, the import duty in India is 10% for products from Russia and from 0–7% for other exporters. This does not allow us to actively increase volumes. The issue of logistics costs is also very important. For efficient operation, the share of transportation costs should not exceed 15–20%. That is to say, $1,800 for a 40-foot container will be acceptable. We are actively negotiating [these] questions with our partners.”

Currently, Segezha supplies classic sawn timber and plywood to India but seeks to expand the range of construction solutions it proposes. Wooden house kits are a big step in this direction, but there is also biofuel and wood pellets, which are an excellent substitute for coal, Ivanov said.

According to Ivanov, with a reduction in logistics costs and customs duties, Russia could export to India the equivalent of about 50 million m³ of round timber in processed form, which is 25% of the total volume of timber harvested in Russia. Despite the fact that India itself harvests about 300 million m³ of timber per year, Segezha says the market for Russian products has great prospects due to the different intended purpose and quality of Russian timber, from which paper, packaging, lumber, modular houses, and wood pellets replacing coal will be produced and exported to India.