ARKHANGELSK, February 18. /TASS/. Lumber businesses of the Northwestern Federal District suggest dropping tariffs on Russian products that are applied in certain countries, including Algeria and China, said press service of the Arkhangelsk Region's Governor Alexander Tsybulsky, who leads the State Council's commission on international cooperation and export. Algeria applies a 15% tariff on lumber from Russia, using at the same time a zero rate for similar products from the EU, the press service told TASS.

"Once the approach to the tariff rate is changed, Algeria's lumber consumers will be able to gain access to high-quality Russian products at competitive prices and get away from the EU countries' monopoly," said Dmitry Krylov, CEO of the Lesozavod 25 Company.

This Arkhangelsk-based company is a major Russian exporter of softwood lumber and, after European markets were closed, it has been increasing sales to Asia, the Middle East and Africa. According to the company's experience of work with Tunisia, the tariff's zero rate has been fully justified. Presently, trade with Algeria is 99% Russian exports, while Russia imports from that country only dates. "At the same time, we are working hard to expand cooperation, to develop supplies of citrus and other fruits, of vegetables to Russia. We hope recent talks that took place two weeks ago will boost the process of bilateral agreements also on the tariff," Pavel Kalmychek of the Russian Ministry of Economic Development said.

At the commission's meeting, Vladimir Slavutsky, Ilim Group's Vice President for Government and Public Relations and Advisor to the Chairman of the Board of Directors, made a similar suggestion of dropping import duties on another type of Russian product - kraftliner, which China uses to make widely imported fiber for corrugated packaging. Referring to a forecast by the Fastmarkets analytical agency, he said that the growth in China' sdemand for kraftliner by 2028 will amount to 2.7 million tons, and one of the sources to satisfy the deficit is to import it from Russia. The Russian product consists of 100% primary fiber, which is safe in direct contact with food - this is a big advantage against kraftliner from other countries, which often contain waste paper. "According to our information, since 2023, China has been temporarily charging no import duties on a number of pulp and paper industry products. However, a 5% duty continues to be levied on kraftliner imported to China from Russia," he said, asking the State Council's commission to eye dropping the import duty on kraftliner for Russia.

Governor Tsybulsky asked the Ministry of Economic Development to submit suggestions on dropping duties on those products from Russia in the Algerian Democratic Republic and China to relevant intergovernmental commissions for further consideration.

Transportation problems

The Arkhangelsk Pulp and Paper Mill's CEO Dmitry Zylev highlighted the problem related to transportation of finished products from the company' s enterprises. "The Arkhangelsk Pulp and Paper Mill has increased deliveries of its products to friendly countries by container trains. The company needs up to 15 container trains per month, mainly in the direction of China. At the same time, we constantly face the inability to ship the maximum number of direct container trains due to Russian Railways' regular inconsistencies and cargo rejections. This causes overstocked warehouses," the press service quoted him as saying. He suggested having temporary quotas for export shipments by direct container trains for the Northwestern Federal District's timber industry and specifically for the Arkhangelsk Pulp and Paper Mill.

He also noted the importance of an alternative transport option to China and Southeast Asia along the Northern Sea Route (NSR). The Arkhangelsk Pulp and Paper Mill could ship its products to the East from the port of Arkhangelsk along NSR. The company potentially could use this route to ship up to 200 units of 40ft containers per month. Lesozavod 25 can ship every month up to 400 units of 40ft containers. "These shipments require a freight forwarder to arrange provision and shipment of empty containers to Arkhangelsk, transportation along the Northern Sea Route, as well as container delivery to the final destinations in China and Southeast Asia. It is necessary to have competitive sea freight rates and then this transportation could be economically efficient," the Arkhangelsk Pulp and Paper Mill's CEO added.

Subsidies for maritime transportation, once the lumber industry now focuses on the east, could ease railway lines that are currently overloaded, the governor said. He suggested discussing the issue at the Arctic - Territory of Dialogue forum due in Arkhangelsk in March.

Another product of lumber companies is fuel pellets and briquettes. Russian companies, working in the northwest, have been a major supplier to the EU. Once supplies to the EU stopped, the producers are facing the problem to sell fuel pellets. The solution could be to open for them the Chinese market. Presently these products are banned for import to China.

The State Council's commission suggested recommending the Ministry of Economic Development to raise the issue of pellet fuel supplies to the People's Republic of China at the intergovernmental level during consultations and negotiations with the Chinese side.