Month: May 2025
Next week, SFE “Forests of Ukraine” plans its largest military aid delivery since the start of the year. The 43rd Separate Artillery Brigade will receive five low-loader trailers for transporting armored vehicles.
The need for low-loader trailers, according to the military, is simply enormous. Equipment often has to be moved or evacuated to the rear for repairs.
Relocation of Western-model self-propelled howitzers and “Pions” for the artillery units can take up to two weeks. An application is submitted to the agency responsible for organizing logistics. Low-loader trailers are hired from private companies.
Long, expensive, and not always reliable.
Now, relocation—for example, from Zaporizhzhia to Sumy—can be completed within a single day. Equipment can be sent for repairs just as quickly.
The low-loader trailers procured by SFE “Forests of Ukraine” are designed to accommodate the full range of artillery systems.
The purchase was conducted via a tender with four bidders, resulting in savings of over UAH 3 million.
“We plan to deliver the trailers to the military as early as next week,” said Director General Yurii Bolokhovets.
Since the start of the full-scale invasion, SFE “Forests of Ukraine” has provided aid to the Armed Forces of Ukraine totaling over UAH 1.5 billion—more than 1,000 vehicles, including pickups, trucks, trailers, tractors, and fuel tankers. The enterprise also regularly supports sponsored brigades and mobilized personnel with drones (over 500 units), electronic warfare systems, and generators.
Today on Prozorro, an auction was held for the procurement of services to implement an ERP-type business process automation system at SFE “Forests of Ukraine.”
As we warned, the auction price could differ significantly from the expected amount. Two participants registered: one offered a price close to the anticipated figure, the other — UAH 88 million, which is almost three times lower.
Both participants are well-known Ukrainian software developers.
The lower-priced proposal was submitted by the company Intelekt-Service (creators of ISpro, M.E.Doc, and other products). It is currently under review, and final decisions will be made based on its outcome.
Why is ERP important?
SFE “Forests of Ukraine” comprises over 1,500 forestries, nine regional branches, and 22,000 employees. The company manages nearly 7 million hectares of land and 250,000 fixed assets (vehicles, machinery, etc.).
Over 15 million documents are generated annually at the enterprise!
Meanwhile, the forestry enterprises incorporated into “Forests of Ukraine” have never had a unified system for data accounting, exchange, and organization.
The largest Ukrainian state‐owned companies (Ukrposhta, Ukrnafta, Ukrzaliznytsia) are already operating with ERP. In the forestry sector, such a system is being implemented for the first time!
Experience shows that, in its first year of operation, an ERP system optimizes company costs by 2–5% of turnover. For SFE “Forests of Ukraine,” this translates to at least UAH 500 million!
The funds invested in development and implementation will be recouped within the first year of operation. Thereafter, the company will only realize savings.
The implementation of ERP is a recommendation of the Accounting Chamber. The automated system, among other things, will facilitate the enterprise’s transition to International Financial Reporting Standards (IFRS).
ERP is the key to implementing investment projects—such as mechanized harvesting and the production of seedlings with a closed root system, among others.
All internal processes within the company will become more transparent. It will be far easier for regulatory bodies to conduct inspections and uncover legal violations. Concealing anything will be virtually impossible.
Through a personal electronic account, market participants will be able to monitor the execution of timber supply contracts and access any other information. Data collected by the system on the origin of timber will ensure compliance with the EU Deforestation Regulation (EUDR).
The project is planned for three years. The contractor must develop a system concept that meets all the requirements of SFE “Forests of Ukraine,” model the business processes, deploy and implement the system, and provide support and updates throughout the contract term. In addition, the contractor will conduct personnel training and test the solution in several branches. Finally, the system should be scaled to the company’s other units.
The Economic Security Bureau of Ukraine stated that its analysts had allegedly identified potential risks of inflating the expected cost of procuring services to implement an ERP-type business process automation system, as well as indications of discriminatory requirements being imposed.
In fact:
1.The feasibility study and calculation of the expected procurement cost were prepared by the Ukrainian Institute for Design and Development of Information and Telecommunication Infrastructure “Diprozvyazok” of the Administration of the State Service of Special Communications and Information Protection of Ukraine.
“Diprozvyazok” provides a comprehensive range of services covering all stages of creating information‐communication and engineering infrastructure, from design and survey work and expert review all the way to commissioning of the facility.
The cost calculation was carried out by the Institute in accordance with the methodology approved by the Ministry of Economy of Ukraine.
2.The compliance of the developed feasibility study with the requirements of SFE “Forests of Ukraine” and legal regulations was confirmed by the expert opinion of the Institute of Telecommunications and Global Information Space of the National Academy of Sciences of Ukraine.
3.As of now, the Antimonopoly Committee of Ukraine has not received any complaints from procurement participants indicating the presence of discriminatory conditions.
4.The expected cost may decrease significantly during the bidding process, so it is premature to draw conclusions about the final procurement price.
A delegation from SFE “Forests of Ukraine,” together with representatives of the State Forest Resources Agency of Ukraine, Ukrainian Research Institute of Forestry and Forest Melioration named after G. M. Vysotsky, and Ukrainian state forest protection enterprises, visited one of the regional directorates of „Lasy Państwowe” (State Forests) at the invitation of their Polish colleagues. During the meeting, the foresters exchanged experiences and discussed current challenges in the field of forest conservation and protection.
Points to Note:
1.Foresters detect forest fires, and the fire service handles extinguishing them.
Representatives of the Ukrainian delegation visited the forest protection workshop in the city of Radom. As at SFE “Forests of Ukraine,” the Polish colleagues have television surveillance systems, with cameras installed on fire observation towers. For extinguishing minor ignitions, there are forest firefighting modules mounted on pickups and handheld tools. If a fire spreads, it is extinguished by units of the State Fire Service of Poland. Polish foresters do not hire seasonal workers for the high fire‐danger period.
2.Within the regional directorate (analogous to our current branches) there is a dedicated agricultural aviation unit.
In each such unit, there are several small aircraft. Flights are organized to extinguish large forest fires and to treat stands and vegetation against pests. Treatment is carried out as needed, and the local population is notified in advance.
If a stand is already dying, a sanitary felling is carried out immediately. The EIA procedure is not required in this case.
3.All work in the forest, including firefighting, is performed by contracted organizations.
The establishment of mineralized strips and firebreaks is carried out by contracted organizations using their own equipment. The same applies to the planting and tending of forest cultures, mechanized harvesting, and even waste removal at recreational sites. The regional directorate only coordinates and supervises the execution of these works.
4.Anyone can become a forester: in Poland, Forest Training Centers have been established where one can complete courses in basic forestry professions.
One such facility is the Andrzej Zalewski Forest Education Center. Here, they offer training in specialties such as forest ranger, logging machinery operator, woodworking, and more. Upon completing the program, students receive a certificate and are able to seek employment.
SFE “Forests of Ukraine” continues to modernize its fleet of specialized machinery. In particular, the enterprise’s investment plan for 2025 provides for the procurement of 59 tractors. Twenty-one tractors of various types from global manufacturers have already been procured and delivered to the branches. A tender has been announced via the Prozorro platform for an additional 35 identical tractors for seven branches. Each tractor will be fitted with a rotating beacon light and a toolbox containing a set of tools.
What are the tractors used for?
tending forest plantations;
skidding timber;
transporting timber to intermediate storage sites;
loading and unloading operations;
construction and maintenance of forest roads (this year alone we plan to equip 200 km).
Another key task is fire prevention activities. For example, last year, using tractors, we established 37.6 thousand km of mineralized firebreaks. We also maintained existing firebreaks—172.4 thousand km in 2024. Such operations are carried out twice a year. Tractors are also used to create firebreaks (530 kilometers last year). They transport water tankers and firefighting equipment.
Some of the work is carried out by contractors, but a significant share of the operational tasks is performed by the forestry management unit staff using their own machinery.
What is the condition of the tractor fleet?
Currently, the enterprise’s forestry management units operate almost 2,900 tractors. Of these, 1,900 units are over 10 years old, and 16 % of those are entirely unfit for operation. The majority of the existing tractors are belarusian-made MTZ models, russian T-40s, and UMZ tractors formerly produced in Ukraine. Repairing them is challenging due to the severe shortage of spare parts for such machinery. Some remnants are available in warehouses, but their quality leaves much to be desired. Hence, the need for new tractors is high.
What are the advantages of the new equipment?
Since 2023, the enterprise has launched a programme to gradually modernize its vehicle fleet, including its tractors. During this period, 103 new units from global manufacturers have already been procured to replace those that are no longer operational. In their use, foresters have noted the following:
new tractors require minimal investment in maintenance, as they perform excellently;
their greater power capacity enables the transport of heavier loads;
these tractors are multifunctional, compatible with cultivators, ploughs, mills and trailers.
Olena Duma, Chair of the Asset Recovery and Management Agency (ARMA), reported that the agency is preparing a competitive tender procedure for the sale of the equipment from the illegal mining farm discovered in one of the branches of SFE “Forests of Ukraine.”
The media did not provide any explanations when they spread the news. But the story is resonant, and we have a story to tell:
1.The clandestine cryptocurrency mining data center in the office premises of the Rava-Ruska branch (Lviv region) was discovered as early as June 2023. The data center appeared in the forestry enterprise a year before the establishment of SFE “Forests of Ukraine”—in March 2022. Since then, the enterprise’s electricity payments have risen significantly (to 23,000 kWh per month).
2.The Security Department of SFE “Forests of Ukraine” uncovered a number of other abuses: vehicle leasing schemes (the enterprise paid for equipment, but the SUVs ended up registered to relatives of the leadership); large-scale fuel theft that was issued to non-working machinery; and covert land privatization (on one of the plots transferred for a long-term lease for a nominal fee, a head’s relative built a tourist facility), etc.
3.In the autumn of 2023, individuals associated with the former leadership of the forestry enterprise attempted to set fire to the premises of the forestry where the crypto farm was located.
4.Numerous proceedings have been investigated by the State Bureau of Investigation: to date, none of the former heads of the forestry enterprise has been held accountable.
5.The former heads of the forestry enterprise have twice been reinstated to their positions by the local court and are now seeking a third reinstatement.
6.All attempts by SFE “Forests of Ukraine” to return the “privatized” land are blocked by the courts.
7.The group that had been running the forestry enterprise launched a smear campaign against the leadership of SFE “Forests of Ukraine.”
8.Pocket judges, law enforcement officers, and “activists” are being deployed against SFE “Forests of Ukraine.” But there will be no return to the old ways.
Roberts Strīpnieks personally delivered the vehicle from Latvia, driving over a thousand kilometers himself, and handed the SUV over to forestry warrior Volodymyr Holovaniuk, a representative of the 18th Separate Marine Infantry Battalion.
Along with the vehicle, the battalion also received over 300 cans of homemade canned game meat.
According to Volodymyr Holovaniuk, the 18th Battalion is currently holding back the enemy’s advance in the Pokrovsk direction. The enemy’s number of drones is constantly increasing, and the russians are trying to destroy all means of transportation — vehicles are critically needed.
The handover took place at a symbolic location — near the Prymiske forestry. In March 2022, the building was shelled by russian forces advancing on Kyiv. Today, the ruins of the forestry serve as a reminder of the devastation brought by the so-called “russian world” to Ukrainian land and of the immense damage the enemy has inflicted on our country’s forestry sector. It was at Prymiske forestry that SFE “Forests of Ukraine” began, in 2023, transferring large batches of vehicles (including pickups, buses, and trucks) to the Armed Forces of Ukraine. All of the equipment was purchased using the company’s own funds.
Recently, in addition to vehicles, SFE “Forests of Ukraine” has also been supplying the military with equipment for repairing and assembling drones, electronic warfare systems, and more. A workshop for the production of ground-based drones is currently being prepared for transfer!
Representatives of the Union of Forestry Warriors of Ukraine showed Roberts Strīpnieks one of the facilities already in operation. It requires considerable funding, but Ukrainians have no other way to support their troops and stop the enemy.
In 2025, SFE “Forests of Ukraine” plans to build and reconstruct over 200 kilometers of forest roads. Construction work on the first scheduled sections has already been completed. Tender procedures for some of the designed road sections are also ongoing via Prozorro.
It is worth noting that the implementation of forestry activities, as well as forest protection and preservation measures, critically depends on access to forest areas and the development of forest road infrastructure. Accordingly, the routes of future forest roads are determined based on the scope of planned forestry activities, as well as ecological, economic, and social considerations.
Recently, the National Agency on Corruption Prevention (NACP) announced its intention to initiate the development of a regulatory act that would “regulate the mechanism for selecting sites for forest road construction”. However, even at present, the process of forest road construction goes through a complicated procedure.
According to Resolution No. 724 of the Cabinet of Ministers of Ukraine (as amended on October 25, 2024), the location of forest road sections is determined based on forest management materials, which themselves undergo a lengthy process of design, approval, and confirmation by the Ministry of Environmental Protection and Natural Resources of Ukraine. If necessary, changes and clarifications to the forest management materials are made through their updating process.
Each year, the regional offices of SFE “Forests of Ukraine” submit proposals to the enterprise’s investment plan, justifying the need to include specific road sections in the construction schedule.
Key criteria for deciding on the construction of a forest road:
Ability to respond quickly to forest fires: fire-fighting equipment will be able to reach remote forest areas much faster.
Improved logistics to logging sites: the skidding distance to hard-surfaced roads is minimized, reducing the cost of timber harvesting and transportation.
Reduced load on local roads: minimizing the movement of heavy machinery on public roads.
Easier access to timber for consumers: by establishing intermediate storage sites for harvested timber.
The next stage after the approval of the investment plan is the design phase, which is carried out in accordance with current construction regulations.
Depending on the planned load, predominantly two types of forest roads are designed – of the first type, arterial, with a carriageway width of 4.5 meters, and of the second type, with a carriageway width of 3.5 meters. The pavement structure is determined during the design phase, with maximum use of local materials taken into account to reduce construction costs. Sometimes it is appropriate to use a soil subgrade stabilization technique by adding mineral binders—cement or lime.
So the whole process is standardized and clearly regulated. The location, technology, materials – everything is determined by the relevant documentation and expert opinions, not by the foresters’ wishes.
We cannot fail to comment on the NACP’s statement that officials of one of the enterprise’s branches “unjustifiably planned, in 2023, the construction of a forest motor road, even though part of that road had already been built in previous years.” This concerns Dovzhanske Forestry in the Zakarpattia region. The road here was first started in 2015, but under the former forestry enterprise only partial cutting of the roadbed was completed. The forest road’s route had not even been fully cut out and cleared. When the project was adjusted in 2023, the expenses incurred for the work performed were not included in the estimate documentation. A tender was held, and a contractor was selected. Therefore, the essence of the controlling authority’s claims remains unclear.
The density of forest roads in Ukraine is many times lower than in European countries. That is why the development of forest infrastructure is one of SFE “Forests of Ukraine” key investment priorities and is one of the essential prerequisites for the sustainable development of the forestry sector. This is, in particular, provided for by the Law of Ukraine “On the Prohibition of Clear-Cutting in Mountain Fir-Beech Forests of the Carpathian Region” and by the State Forest Management Strategy of Ukraine until 2035, approved by Order No. 1777-r of the Cabinet of Ministers of Ukraine dated 29 December 2021.
Thirty percent of the planned harvest volume was offered at the forward semi-annual auctions. Following proposals from the business community, the algorithm for setting starting prices was revised, resulting in a significant reduction.
However, dialogue with the market remains ongoing. During a meeting with representatives of the European Business Association, key concerns currently facing major producers were discussed.
1.Amending the Law on Environmental Impact Assessment (EIA)
Due to restrictions that do not exist in the EU, Ukraine’s industry loses millions of cubic meters of fuelwood annually. The export of board-based products is artificially limited. One of the main reasons is the lengthy and overly bureaucratic procedure for forest restoration after natural disasters, fires, and other emergencies. Representatives of the European Business Association expressed interest in exploring the EIA issue in greater depth and taking part in the legislative amendment process.
2.Strengthening accountability of market participants
There are cases where winning bidders fail to take up the contracted volume, while other businesses suffer from a lack of available resources. Representatives of the Association pointed out such instances, noting that the current amount of the guarantee deposit is not a sufficient safeguard against bad-faith behavior by certain auction participants.
We are open to consider the Association’s proposals. Strengthening safeguards is appropriate, provided it does not lead to reduced competition, restricted access to resources, or a deterioration in business conditions.
3.Reducing deliveries from upper storage sites
In 2024, upper storage sites at SFE “Forests of Ukraine” accounted for 16% of timber shipments. In Q1 2025, this share dropped to only 4%. Our position fully aligns with that of EBA representatives — deliveries from upper storage sites should be phased out.
The only issue is the capacity of the existing infrastructure. All new forest roads built by SFE “Forests of Ukraine” are designed to include intermediate storage sites.
4.Reducing the density of the auction schedule
In recent months, timber auctions have become highly competitive. Participants competing for resources in multiple regions have suggested making the auction schedule less dense, so they can physically keep track of all the relevant lots.
We are ready to discuss this proposal together with representatives of the exchanges. SFE “Forests of Ukraine” will support any initiatives that enhance competition and market transparency and contribute to creating more convenient conditions for businesses.
5.Improving the effectiveness of claims handling
Timber is a perishable commodity. SFE “Forests of Ukraine” signs contracts for the supply of products that are still planned for harvesting. Therefore, questions related to the quality of timber may arise in one way or another. EBA representatives understand this, but note that during periods of rising prices, the issue becomes more sensitive.
To respond more promptly to buyer inquiries and resolve disputes, SFE “Forests of Ukraine” will introduce a dedicated position for a claims handling specialist.
The auctions for timber with six-month forward contracts for the second half of 2025 have been completed.
Compared to last year’s “pilot” six-month auctions, a significantly larger volume of timber resources was offered this time, including nearly all types of roundwood.
Out of the proposed 1.56 million m³ of timber (compared to 416 thousand m³ offered for the first half of 2025), a total of 1.45 million m³ was sold. Bidders contracted 93% of the available volume: 96% of roundwood and 91% of industrial fuelwood.
As a result of meetings with the business community, SFE “Forests of Ukraine” introduced a new algorithm for setting starting prices (both for semi-annual and quarterly auctions).
Therefore, starting prices at the semi-annual auctions were, in most cases, significantly below market level. However, as previously noted, this did not affect the auction outcomes. The final price, as always, was determined solely by the balance of supply and demand.
In the alder and birch segment, starting prices were twice as low as the current market level, but during the auctions they increased by 107–133%, reaching nearly UAH 8,000 per m³.
For round pine, with the current May market price at UAH 4,100 per m³, auctions started at UAH 3,600 per m³. In the course of bidding, prices returned to the market level — UAH 4,100 per m³.
Coniferous industrial fuelwood (pine) — with the current market price at UAH 1,370 per m³, bidding started at UAH 1,170 per m³ and ultimately rose to UAH 1,540 per m³.
In parallel with the semi-annual auctions, quarterly timber auctions (for Q3 2025) were also launched. These are still ongoing, and results will be reported separately.
Summary:
1.Strong business interest in six-month contracts confirms that SFE “Forests of Ukraine” is moving in the right direction. Starting next year, we will introduce annual contracts for the first time, enabling market participants to secure the necessary volumes of timber and plan their production processes with greater certainty.
2.Regardless of how much you experiment with starting prices, the situation in each individual segment is defined by current market conditions. When there is demand, prices during the auctions can double or even triple.
3.Artificially lowering the starting price leads to the opposite effect — it creates a rush of demand that drives prices up.
4.Demand for timber remains high, which makes SFE “Forests of Ukraine” proposals to amend the legal and regulatory framework that restricts timber harvesting even more relevant.