The Ukrainian economy is on course to shrink by 45 per cent due to the Russian invasion and humanitarian crisis this year, according to World Bank predictions. Blocked sea ports on the Black Sea have already suffered a fall in traffic of more than 75 per cent, shifting transport to roads.
Despite the conflict in parts of the country, the disruption in logistics, and collapse of a significant part of the internal market, there are businesses in the woodworking sector that are making their best efforts to carry out their daily work as before. Among the havoc in markets, women leading woodworking companies in Ukraine are offering a way for actors in Europe to still be able to import high quality FSC-certified material now that the traditional sources from Russia and Belarus are not available.
Several managers and directors from the wood industry from territories where certification remains operational have shared their perspectives on how FSC helps them survive as companies and how actors on the EU market can transform the hardship into new opportunities.
Natalia Pokinska (pictured above), Managing Director Kronospan UA LLC, one of the largest wood-based panels producing companies in the country said: “Today FSC certification remains not just relevant, but vital to support the economy of Ukraine, to give jobs to those, who did not migrate and those who are relocated. Woodworking and furniture plants have almost lost local sales markets. Thus, there is an urgent need to find new customers abroad. It is obvious that European consumers are ready to buy wood / furniture only with FSC certification."
Woodworking companies lost timber suppliers from areas affected by armed conflict and are faced with an unstable wood market showing reduced price and demand for some products. This means that they need to find new clients abroad to keep similar production levels and staff. The value of export contracts and furniture clients oriented to EU market increased dramatically.
Iryna Matsepura (pictured left), Director “VGSM” LLC commented: “The FSC certificate is extremely important for all chain of supply and export of products. It shows that we work in a disciplined manner, meet all the requirements, and can be reliable partners even in such a difficult time."
While on one hand, martial law reduced human resources due to military mobilization, on the other hand, it increased discipline and responsibility of all employees and organizations. The numerous check points on roads significantly reduced risk of Illegal logging as the already difficult transportation wood or wood products lead to cancelling without relevant documents.
Victoria Kuchmuk (pictured right), Manager of Zunami LLC, a wood working company producing oak floors, confirmed that: “In the face of martial law, maintaining the certified status of forestry enterprises is critically important, so that even with the decrease of internal demand, we can still sell our products abroad. We are located on territory outside of the military conflict and manage to maintain high standards despite what is going on elsewhere.”
FSC certification plays an extremely important – and in some cases vital --role, for those businesses in the Ukrainian forest sector that are considering reorientation towards the EU market, which demands that wood and wood products are FSC-certified.
Establishing trade partnerships with these companies can not only help the Ukrainian economy, but can also partly replace FSC-certified material from the major sourcing countries - Russia and Belarus whose trading certificates are no longer valid due to FSC’s decision to suspend them.
Given the remaining risks to supply system integrity in Ukraine, the bodies performing controls set the highest standards, going beyond the international ones to address these risks. They are currently testing a risk- adjusted auditing of FSC-certified companies.
Read more on the risk-adjusted auditing here
For questions and interviews, please contact Ewa Hermanowicz, Communications Manager for Europe and CIS at e.hermanowicz@fsc.org
Location of companies whose managers were interviewed to collect documentation for this story.
