Komi socioeconomic development successful – republic head

SYKTYVKAR, September 28 (Itar-Tass) -- Prime Minister Vladimir Putin arrived in Komi on Tuesday for chairing a conference on timber industry investments and visiting Mondi Syktyvkar, one of Russia’s largest paper and pulp producers, and the Syktyvkar timber industry plant.

He met with Komi head Vyacheslav Gaizer and asked for information about the republic’s socioeconomic development in the first half of this year.

“The crisis had an effect on the republican economy, yet this year witnessed sustainable positive development of socioeconomic parameters,” Gaizer said.

“Industrial production keeps to last year’s level. Coal mining grew by 20%, and timber industry had a growth of 7% to 28%. Meanwhile, oil production declined slightly, by about 3%,” Gaizer said. “Hopefully, oil production will stabilize by the yearend,” he added.

The republic has a lower inflation than Russia’s average. The unemployment rate has declined from 3.4% to 2.9%. “That had an effect on revenues of the republic’s consolidated budget. The revenues grew by approximately 15%,” he said.

The republic will increase salaries of public sector employees on October 1, Gaizer said.

He noted that the republican authorities were actively resolving problems of small schools and developing education by correspondence.

“We are working on the modernization of health care and have drafted a regional health care program,” the republican leader said.

Before meeting with Gaizer, Putin chaired the conference, which centered on main problems in the development of the timber industry, governmental support to the timber industry, forestry management laws and timber industry development in the Republic of Komi.

First Deputy Prime Minister Viktor Zubkov, representatives of ministries and departments, heads of several Russian regions and executives of timber industry plants took part in the conference.

Ten timber industry projects with the total investments of 25 billion rubles will be fulfilled this year, the premier said.

“Twelve large projects with the total investments of 34 billion rubles have been done, and more than 4,000 jobs have been created. Another nine regions worth of 35 billion rubles will be fulfilled in 2010, with over 3,500 new jobs,” he said.

“That is not bad. Businessmen’s interest in the timber industry is growing,” Putin noted.

“All the interested investors must have an access to forests, that is a task of the government,” he said. “If a project meets the criteria, businessmen should have no lease problems or others.”

“The government will pay attention to the quality of forestry projects. There will be no unification, as various regions have various conditions. However, rational forestry management, environmental awareness and appropriate conservation and replacement works must be ensured in every project,” Putin said.

“New forestry laws were approved in 2006. We aimed to create steady and transparent rules for long-term investors and to do away with any unnecessary barriers,” he said.

“The maximum period of forest lease was enlarged to 49 years, and scrupulous businessmen were given preferential rights to extend the lease period. Those ready to invest over 300 million rubles were exempt from tenders and enjoyed the 50% discount in rent throughout the lease period. Export duties were raised on unprocessed timber. We sent a clear message to businessmen, those who want to work in the Russian timber industry must develop processing,” he said.

Investments in timber processing grew in Russia, Putin said.

He explained the government’s keen interest in the timber industry with saying that the industry meant not only taxes and jobs but also a chance to revive and to give a worthy life to small towns and villages.

Putin promised businessmen in the timber industry to ask bankers for lesser credit rates.

“You keep on working, and we will give you support,” he said at the conference.

Putin recalled that credit rates were high during the crisis. “Things have changed, and basically all the banks, including Sberbank, lower the rates of loans issued during that complicated period,” he said.

The government approved 91 investment projects worth of 407 billion rubles, Zubkov told the conference.

“On the whole, 91 investment projects worth of 407 billion rubles were approved in the timber industry for the period until 2017,” he said. “Over 42,000 jobs would be ensured.”

The number of investment projects may enlarge, Zubkov said. “The Industry and Trade Ministry is considering new applications,” he said.

The premier visited the Syktyvkar timber industry plant. The plant was established in 2008, and the first line making wooden prefabs was started up a year later. The plant is taking part in the governmental program of accessible and comfortable homes.

It makes 35,000 square meters of housing per year, as well as manufactures glued laminated lumber and industrial wood for the domestic and foreign markets.

The plant has about 160 employees. It receives raw materials from local producers but may do the logging unaided in the future.

Prefabs became particularly topical after wildfires that broke out in Russian regions this summer. Thousands of people lost their homes. Putin promised them to take the construction of new homes under control.

Plant director Yevgeny Korolyov told Putin that the plant had a full production cycle and could fulfill standard and individual orders.

A prefab for two or three families can be assembled within six or seven hours, Korolyov said.

Putin also visited Mondi Syktyvkar.

The plant meets over 40% of the office and poster paper demand in Russia and the CIS, as well as makes newsprint and cardboard. It controls seven logging companies in Komi and logs about 2.5 million cubic meters of wood itself. Mondi Syktyvkar is the core of the Komi timber industry, which amounts to over 60% of republican industrial production and over 40% of taxes.

Plant Director Gerhard Kornfeld told Putin that the plant had skilled personnel. The STEP investment project was launched in 2008, which would increase the annual wood processing by one million cubic meters. The production of cellulose and paper will also grow.

Putin was told about modernization plans for the facility, which was built about 40 years ago. “We enlarged the consumption of wood by 25% and the production of cellulose by 20% in the past two years,” Kornfeld said. “The project started in 2008 and cost 545 million euros.”

The plant mostly makes writing paper and newsprint, and 80% of these products are consumed on the domestic market. Twenty percent are exported. The plant has 8,500 workers, Kornfeld said.

Russia controls about a fourth of world forestry resources (over 82 billion cubic meters of wood). About 60,000 small, medium and large companies are engaged in forestry management, conservation and wood processing in the country. Logging grew by 107.9%, lumbering and woodworking grew by 111.8%, and paper and pulp production grew by 107.9% since January-July 2009.