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Forestry and Woodworking
The forest sector has convincingly demonstrated its strategic importance to Latvia’s national economy. Of all the companies registered in Latvia, 8% are linked to the forest sector, which employs around 5% of the labour force. The forest sector’s share of Latvia’s gross domestic product is about 5%; in 2009, the value of products turned out by the sector reached LVL 518 million (EUR 737 million).
With forests covering more than 50% of its territory (1.6 times the world average), Latvia is one of the most forested EU member states. Over the last 70 years, the forested area has nearly doubled while standing volume has increased 3.6 times, reaching 631 million cubic metres. About 50% of forests are owned by the state. Management of state forests is undertaken by state stock company Latvijas valsts meži (Latvian State Forests).
The relatively good health of Latvian forests compared with world averages gives them a substantial advantage. Furthermore, the area of regenerated forest is increasing. In 2008, a total area of 40 600 ha of forest was regenerated of which 28% was in state forests and 72% in privately owned forests. In 2008, forest areas were restocked by 4 400 ha more than in the previous year. For privately owned forests the 2008 figures for forest regeneration were the best since 2001.
Final Felling and Forest Regeneration
Source: Central Statistical Bureau of Latvia, 2009
The volume of timber harvested annually from Latvia’s forests had been fairly stable – between 10 and 11 million m3 of timber. In 2008, the total volume of felling was 9 million m3 (5.6 million m3 (62%) from state-owned forests, 3.4 million m3 (38%) from other forests). The proportion of timber sourced from state-owned forests has varied over time, but it is believed that they will be the major source of timber in the future. Harvest volumes in privately owned forests have fallen as a result of less favourable conditions in the timber market.
Volume of felling by ownership
Source: Central Statistical Bureau of Latvia, 2009
Sector Export
The forest sector is Latvia’s most important export industry, historically having contributed as much as one third of national export revenues. About 70% of forest sector output is exported.
The foreign trade balance of the Latvian woodworking industry is positive, having reached LVL 497 million (EUR 707 million) in 2008 despite wood product exports decreasing by 19% compared to 2007. In 2008, the value of wood product imports was LVL 331 million (EUR 471 million), 31% less than in 2007.
In 2008, sawn wood and roundwood, as traditionally, were the main woodworking industry export products. Compared to 2007, the most significant increases in exports were for wood-fuel products and particle boards. Fuel and plywood have significant shares of the sector’s exports, accounting for 11% and 10% respectively.
Woodworking product exports by type of product in 2008
The main export destinations in 2008 were Sweden, the United Kingdom and Germany. Compared to 2007, exports to Poland increased by 20% and to Lithuania by 12%. However, exports to the UK decreased by 52%, to Sweden by 19% and to Germany by 12%.
Proportion of woodworking product exports by country in 2008
Sector Advantages
The industry’s success is based on Latvia’s favourable combination of vast forest resources, strategic location and cost-efficient labour force. Additionally, government policies aimed at achieving sustainable forestry development have supported the industry's success.
Key sector advantages:
- availability of vast domestic and imported wood resources
- skilled labour force in a historically traditional industry
- established timber-processing sector including proven R&D capability
- www.latvianwood.lv – Latvian wood industry portal
- www.latviantimber.lv – Latvian Timber Producers’ & Traders’ association
- www.lvm.lv –Latvijas Valsts Meži (Agency managing state-owned forests)
- www.vmd.gov.lv – Latvia State Forest Service
