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The corporatization of SE “Forests of Ukraine” was one of the key topics discussed during a meeting between FSC Ukraine and certificate holders held as part of the International Forestry Forum in Lviv.
Within the framework of the 27th International Exhibition Woodworking 2026, FSC® Ukraine organized an open discussion titled “Supporting Dialogue for the Sustainable Development of Ukraine’s Forest Sector.” One of the central issues on the agenda was the transformation of SE “Forests of Ukraine” into a joint-stock company and the implications of this process for the forestry sector.
Particular attention was given to the preservation of FSC certification throughout the corporatization process.
Today, SE “Forests of Ukraine” manages 6.9 million hectares of forest land, of which 4.6 million hectares are FSC-certified.
FSC certification remains one of the key prerequisites enabling wood-processing companies to export their products to European markets, where traceability and responsible sourcing of timber are mandatory requirements.
Ihor Zubovych, Head of the Transformation Commission of SE “Forests of Ukraine,” who attended the FSC event, emphasized that corporatization involves a change in the enterprise’s legal status—from a state-owned enterprise to a joint-stock company with 100% state ownership.
At the same time, the essence of the company’s activities, its functions, responsibilities, and approaches to forest management will remain unchanged.
The corporatization process does not envisage any changes to the management system of certified forests. The superintendencies (nadlisnytstvas) will continue to serve as FSC certificate holders, ensuring uninterrupted compliance with all requirements of the international standard.
The company is maintaining transparency throughout the transformation process and is proactively informing the FSC Ukraine office and other bodies within the voluntary forest certification system about each stage of the transition.
Cooperation between SE “Forests of Ukraine” and FSC Ukraine remains constructive and focused on strengthening and expanding the forest certification system.
“SE ‘Forests of Ukraine’ has demonstrated openness in discussing corporatization, showing its readiness to address the challenges associated with this transformation while building transparent partnerships with the market and thereby strengthening supply chains. For our part, we will contribute to this process by fostering constructive dialogue and ensuring predictability in the development of FSC certification,” said Pavlo Kravets, Director of FSC Ukraine.
In accordance with Ukraine’s State Forest Management Strategy, the company plans to increase the area of certified forests by the end of 2027.
Microsoft Ukraine to Support the Digital Transformation of the State Enterprise “Forests of Ukraine”
A Memorandum of Strategic Cooperation was signed by Ihor Zubovych, Head of the Transformation Commission of the State Enterprise “Forests of Ukraine”, and Yevhen Kahanovskyi, Country Manager of Microsoft Ukraine.
The key areas of cooperation include the implementation of advanced corporate artificial intelligence (AI) tools, cybersecurity, data protection, and staff training. According to Yevhen Kahanovskyi, Microsoft will provide advisory support to the State Enterprise “Forests of Ukraine”, drawing on successful digital transformation experience from similar organizations in other countries.
“You can be confident that the enterprise’s data will remain fully under your control, while all information will be integrated into a single structured system. This will create opportunities to implement modern corporate services based on AI technologies in the future,” said Yevhen Kahanovskyi.
Ihor Zubovych emphasized that the development of the State Enterprise “Forests of Ukraine” is inseparably linked to the digital transformation process. New technologies offer businesses remarkable opportunities: artificial intelligence can automate management processes, increase efficiency and transparency, free up human resources, and optimize costs.
“Our enterprise needs to move significantly faster. It is important to relaunch this area of work and eliminate existing gaps by relying on the advisory support of leading technology companies and on solutions that have already proven successful in developed countries. I would like to thank Microsoft Ukraine for its willingness to support the digital transformation of ‘Forests of Ukraine’, particularly by providing global expertise in data protection and the implementation of AI tools,” said Ihor Zubovych.
A year ago, in late May 2025, the Supervisory Board of Forests of Ukraine SE initiated independent audits of the company’s annual financial statements and approved the auditor selection criteria.
The Board explained its decision by stating that “society must be confident that the company’s performance results correspond to the reported figures.” In addition, conducting an independent audit is an integral part of the corporatization process of Forests of Ukraine SE.
The audits have now been completed, and the reports have been published on the company’s website.
The financial statements for 2022–2024, prepared in accordance with the National Accounting Standards of Ukraine (NAS), were audited by Grant Thornton Legis, a member of Grant Thornton, one of the world’s leading networks in audit, tax, and business advisory services.
The auditor confirmed that the financial statements were prepared, in all material respects, in accordance with the requirements of the Law of Ukraine “On Accounting and Financial Reporting in Ukraine.”
The independent audit of the 2025 financial statements was conducted by Crowe Erfolg Ukraine, a member of Crowe Global, the world’s eighth-largest accounting, audit, and consulting network. Since Forests of Ukraine SE adopted International Financial Reporting Standards (IFRS) as of January 1, 2025, the audit for that period was performed in accordance with IFRS requirements.
According to the audit report, “the financial statements of Forests of Ukraine SE present fairly, in all material respects, the financial position of the company, its financial performance, and its cash flows.”
The auditors also noted several observations, including limitations related to information on the historical cost of certain assets. Part of the property transferred to the company from former state forestry enterprises was originally established during the Soviet era, and in some cases the primary documentation has been lost.
Nevertheless, Forests of Ukraine SE successfully passed independent audits of its financial statements for all four years of operation.
In particular, the independent audits confirmed revenue growth from UAH 22.7 billion in 2023 and UAH 23.0 billion in 2024 (under NAS) to a record UAH 29.9 billion in 2025 (under IFRS).
The audits also confirmed an increase in net profit from UAH 3.0 billion in 2023 and UAH 2.8 billion in 2024 to UAH 6.9 billion in 2025.
By decision of the Supervisory Board members, effective July 1, 2026, the duties of CEO of Forests of Ukraine have been assigned to Ihor Zubovych, Head of the Enterprise Transformation Commission.
Supervisory Board member Roberts Strīpnieks stated that the personnel changes would significantly strengthen the company’s management team.
“Forests of Ukraine must continue on the same course, but with new energy. Serious challenges lie ahead for the new leader, but we are ready to fully support his work. He enjoys the complete confidence of the Supervisory Board,” Roberts Strīpnieks emphasized.
According to Supervisory Board member Janne Harjunpää, the results achieved by the company’s management over the past years have been substantial, but the transformation process of Forests of Ukraine will bring new strength, new energy, and new expertise.
Ihor Zubovych noted that his goal is to introduce new approaches to managing the enterprise — more modern, transparent, and efficient.
“I thank the members of the Supervisory Board for their trust and support. The company’s priorities are, first and foremost, strengthening management transparency, modernization and the implementation of modern technologies, achieving a balance between economic and environmental interests, contributing to the state budget, and, most importantly, increasing public trust in the work of foresters,” Ihor Zubovych stated.
Following the meeting, the Supervisory Board also initiated preparations for a competitive selection process for the position of CEO of Forests of Ukraine.
To conduct the competition, the company is required to engage a professional executive recruitment consultant, as well as develop and submit to the Supervisory Board the competition procedures and candidate evaluation criteria for approval.
In addition to personnel matters, the Supervisory Board approved the report on the implementation of the financial plan of the State Specialized Enterprise “Forests of Ukraine” for the first quarter of 2026, as well as an interim report on achieving the objectives defined in the Owner’s Expectation Letter for 2026.
The Supervisory Board also took note of the following: the CEO’s report on the efficiency of state property and profit management for Q1 2026, the results of the analysis of the organizational structure of Forests of Ukraine, and the independent auditor’s report on the company’s financial statements for 2022–2024.
The Supervisory Board instructed the company to conduct an independent audit of its 2026 financial statements and approved the procedure for selecting audit service providers through a competitive process.
The Supervisory Board also recognized the necessity of implementing a unified ERP (Enterprise Resource Planning) system within the company — software designed for comprehensive automation and management of all company resources.
The unified ERP system is expected to serve as a key tool for transforming business processes, improving management quality, increasing accounting transparency, accelerating management and financial reporting, and reducing the risks associated with outdated and sanctioned software.
According to Supervisory Board member Markiian Vytvytskyi, extensive preparatory work has already been carried out to ensure maximum detail in the ERP implementation process, and the company is now ready to launch the first phase.
Detailed information on the forest products that Forests of Ukraine will offer to wood processors, households, social institutions, and the Armed Forces of Ukraine in the second half of the year is now publicly available on the company’s website.
As known, at the beginning of each year, Forests of Ukraine publishes its assortment plan and the assortment structure of forest products scheduled for sale.
From now on, the information will become even more detailed. We are additionally publishing harvesting and sales plans broken down by quarterly and forward auctions, as well as by volumes and quality classes of forest products.
Our goal is to increase predictability and balance in the timber market, stabilize prices, and improve contract fulfillment rates among wood-processing companies.
Overall, in the second half of the year, Forests of Ukraine plans to offer consumers nearly 6.3 million m³ of forest products.
More than 1.7 million m³ have been reserved for households, the social sector, and defense needs. These products will be supplied either at social prices or free of charge for the Armed Forces of Ukraine.
Nearly 4.6 million m³ of forest products are planned to be offered through quarterly and semi-annual auctions. This volume will be distributed almost equally between the Q3 and Q4 auctions and forward semi-annual auctions.
Forward contracts for the second half of the year will begin on Monday, May 18, while the auction session for Q3 resources will start on Tuesday, May 19.
The auction schedule is available here.
The production infrastructure is already in place; however, harmonization of Ukrainian legislation with European standards and the introduction of an appropriate certification system are still required.
Legislative amendments were discussed during a meeting attended by Chairman of the Verkhovna Rada Committee on Environmental Policy Oleh Bondarenko, Members of Parliament, Deputy Minister of Economy Taras Vysotskyi, Head of the State Forest Resources Agency Viktor Smal, and Head of the Transformation Commission of State Enterprise “Forests of Ukraine” Ihor Zubovych.
Two years ago, in April 2024, the Ukrainian Parliament adopted as a basis Draft Law No. 9116 “On Forest Reproductive Resources,” which regulates the production and use of seeds, seedlings, and saplings of forest trees. The document introduces a legal framework for registration, monitoring, and quality control of forest reproductive materials in line with European legislation and standards.
As noted by Ihor Zubovych, Draft Law No. 9116 serves as a foundation for the further development of forest seed production in Ukraine, particularly the expansion of a network of modern seed and breeding centers. The enterprise already operates nine such centers, with total production capacity expected to reach 25–30 million seedlings annually in the near future. Investments in expanding the network in 2026 alone will amount to UAH 270 million.
Naturally, the priority remains the domestic market — producing high-quality planting material with a high survival rate for reforestation in de-occupied and war-affected territories. At the same time, Ukrainian products have every opportunity to compete successfully on the European market.
The meeting was deliberately held in Kipti, Chernihiv region, where the first phase of Ukraine’s largest seed center for growing container-grown seedlings with a closed root system began operations this spring. Construction of the second phase — outdoor growing fields — is currently underway, while the third phase, consisting of greenhouses, is scheduled for next year. Once completed, the facility will provide 8 million planting slots. Expanding the center’s capacity will enable plans for entering the EU market.
The participants also discussed legislative changes related to the corporatization process of State Enterprise “Forests of Ukraine”.
Since the beginning of the year, nearly 80,000 m³ of timber worth more than UAH 335 million has already been delivered to meet the needs of Ukraine’s Defense Forces. The average supply volume amounts to around 750 m³ per day — approximately 19 railway wagons of forest products daily.
Compared to last year, supply volumes have increased significantly. In the first quarter of 2026 alone, more than 50,000 m³ of timber was delivered to the Armed Forces of Ukraine — eight times more than during the same period in 2025.
The supply process is carried out through an organized cooperation system between the military and State Enterprise “Forests of Ukraine”.
First, military units identify their needs and submit requests. The enterprise then processes all applications and distributes them among its regional branches.
The largest volumes of forest products are shipped from the resource-rich Polissia, Capital, Carpathian, and Northern branches. Most of the supplies consist of coniferous species, with the highest demand for small-diameter timber.
The timber is delivered to frontline regions — Sumy, Kharkiv, Donetsk, and Zaporizhzhia — where it is critically needed for the construction of defense lines and other protective structures.
All timber is provided free of charge. State Enterprise “Forests of Ukraine” covers the costs of harvesting, transportation to railway stations, wagon loading, and also pays all taxes and fees to the state budget.
Another important area of work is supplying the military with firewood for heating.
Despite the end of the heating season, the housing and maintenance departments of the Ministry of Defense have already started preparations for the next winter and are conducting procurement through the Prozorro system. Once funding is allocated, tenders are announced, and the branches of State Enterprise “Forests of Ukraine” participate in them. The enterprise provides all necessary information regarding available volumes, delivery terms, and shipment capacities.
Since the beginning of 2026, the company’s branches have signed contracts with the Ministry of Defense’s housing and maintenance authorities to supply around 70,000 m³ of firewood. To date, more than 34,000 m³ of products have already been delivered.
This year, SFE “Forests of Ukraine” has planned record investments in firefighting equipment and gear — approximately UAH 400 million. This is three times more than last year.
Why does “Forests of Ukraine” invest in developing its own fire protection system instead of outsourcing this function to the State Emergency Service (SES)?
For example, in countries such as France, Italy, Greece, or Poland, the primary responsibility for extinguishing forest fires lies with fire and rescue services or civil protection authorities, while foresters mainly provide local knowledge — maps, access routes, and water sources.
In countries where there is no single operator and forest management is carried out by various types of forest users — private, municipal, and state-owned — it is logical for fire response systems to be centralized at the state level.
In Ukraine and several post-Soviet countries, a different model has historically developed. Full responsibility for organizing fire suppression lies with the forest user. The SES is involved only when a fire reaches the level of an emergency situation, as defined in Article 2 of the Code of Civil Protection of Ukraine.
According to the criteria established by the Ministry of Internal Affairs of Ukraine, the SES may be involved in extinguishing forest fires only when the fire area reaches the threshold of an emergency situation (over 50 hectares).
Responsibility of the forest user: regulatory framework
In 2004, the State Forestry Committee of Ukraine issued Order No. 278 “On Approval of the Fire Safety Rules in Forests of Ukraine.” The document clearly states that “the direct implementation of measures for forest fire protection, suppression, and accounting is assigned to permanent forest users.”
Currently, the largest forest user in Ukraine is SFE “Forests of Ukraine,” managing nearly 7 million hectares of forest area.
This means that SFE “Forests of Ukraine” is responsible for firefighting, while other structures may be involved, but the final responsibility for results lies with foresters.
These rules also require the enterprise to maintain a state fire protection system — essentially its own units based at forest fire stations or designated points equipped with the necessary firefighting equipment.
Forest users are also required to implement preventive measures, including establishing mineralized strips, maintaining forest roads in passable condition, and creating fire water reservoirs.
The required number of firefighting equipment and resources is defined by the Resolution of the Cabinet of Ministers of Ukraine No. 612 of 20 May 2022 “On Approval of the Procedure for Forest Protection and Safeguarding.”
Based on these requirements, SFE “Forests of Ukraine” forms its plans for upgrading the material and technical base of forest fire stations and equipping relevant units.
Cooperation with the SES: why outsourcing is ineffective?
Resolution No. 612 also clarifies that the SES may be involved in firefighting only when a forest fire exceeds a “controlled situation” or there is a risk of it doing so. This may include large fire areas (over 5 hectares), rapid fire spread, difficult conditions (strong winds, heat, inaccessible terrain), lack of personnel or equipment, or threats to settlements, infrastructure, or human life.
Thus, the regulatory framework allows forest users to involve the SES in certain cases. However, this is only a right! The SES may not arrive even in large-scale forest fires, including those classified as emergencies. There are several reasons for this.
1.Long distance to the fire location
In 2017, the Cabinet of Ministers of Ukraine issued the Order “On Approval of the Strategy for Reforming the System of the State Emergency Service of Ukraine.”
As a result, the main task of the SES became responding to large-scale emergencies.
Resolution of the Cabinet of Ministers of Ukraine No. 1269 of 16 December 2020 “On the Territorial Bodies of the State Emergency Service” changed the structure of the SES in accordance with the new division of districts introduced as a result of the administrative-territorial reform.
As a result, instead of approximately 500 district units, 136 remained within the SES. The distance from some remote forest areas to the nearest district department of the SES is many dozens of kilometers. Moving firefighting equipment over such a distance takes considerable time and involves significant costs.
2.Most SES fire engines need to be renewed
Ukrainian rescuers receive new equipment from international donors, but they often still use outdated vehicles, such as GAZ-66, ZIL-131 and Ural trucks.
These vehicles are known for their durability and ability to pass through areas where modern equipment sometimes cannot cope, especially off-road or in forests. At the same time, they are morally and technically outdated: they consume a lot of fuel, break down more often and do not develop high speed.
In real conditions, this means that fire engines move much more slowly than ordinary vehicles — on average about 35 km/h on highways, and even slower on forest roads. As a result, rescuers take longer to reach the site of a forest fire, and the area affected by the fire may increase significantly.
3.During the war, the priority of the SES is to eliminate the consequences of enemy shelling
During martial law, the priorities of the SES are regulated by the Code of Civil Protection of Ukraine, which defines the procedure for the actions of rescuers.
First of all, the SES focuses on clearing rubble after shelling, rescuing people, demining, and responding to the destruction of critical infrastructure. The SES becomes involved in extinguishing a forest fire, even if it has already reached the level of an emergency situation where the affected area exceeds 50 hectares, only when this does not interfere with the performance of its main tasks in areas exposed to combat-related risks.
In May last year, following a hit by an enemy guided aerial bomb in the frontline Borivske Forestry Management Subunit (lisnytstvo), a forest fire broke out. Due to dry, hot weather and strong winds, it reached an area of 110 hectares within a few hours. Foresters extinguished it using their own resources in almost a day.
“If we had waited for the rescuers, according to our estimates, the forest fire would have covered more than 1000 hectares of forest,” recalls Oleksii Shapovalov, Assistant Head of the Iziumske Forestry Management Unit (nadlisnytstvo) of the branch “Slobozhanskyi Forest Office”.
4.SES outsourcing services are not designed for large forest fires and are too expensive
Resolution of the Cabinet of Ministers of Ukraine No. 1102 of 26 October 2011 “Certain Issues of the Provision of Paid Services by Units of the State Emergency Service” allows rescue units to be engaged on a paid basis.
This concerns functions that are not related to emergency response. These may include both precautionary or preventive measures, as well as the use of equipment for extinguishing or preventing fires at specific sites, for example during works in forests or at logging sites.
Theoretically, rescuers could also be engaged, for a separate fee, to extinguish a small forest fire. SFE “Forests of Ukraine” has already considered this option. However, the key question is whether it would be cheaper than making its own investments.
Example of calculating the cost of an SES response to a forest fire covering 0.03 hectares.
Responding to such a fire would require one fire engine with five rescuers, who would have to travel about 100 km in total, both ways.
The average speed of GAZ-66, ZIL-131 and Ural trucks on highways is 35 km/h. Therefore, the journey alone takes almost three hours, with another two hours needed for the actual firefighting. In total, this means almost five hours of work, 83 liters of fuel consumed, and a full tank of water. Altogether, the cost exceeds UAH 20000.
“The area affected by last year’s fires was approximately 6,000 hectares, most of which occurred in frontline areas. SES services would have cost us more than UAH 3 billion,” says Mykola Hontaruk, Deputy Director of the Department of Forestry of SFE “Forests of Ukraine.”
Local community fire units: misplaced expectations
According to the Order of the Cabinet of Ministers of Ukraine “On Approval of the Strategy for Reforming the System of the State Emergency Service of Ukraine,” firefighting functions in territorial communities should be transferred to local fire protection units and volunteer fire brigades.
However, a significant number of communities do not have the financial resources to fully maintain fire units and equipment.
During the war, financial resources are directed toward defence. Many men have been called up for service in the Armed Forces of Ukraine, and there is currently simply no one to fill positions in local fire protection units.
Formally, the requirement exists; in practice, in many communities it has not been implemented.
Investments of SFE “Forests of Ukraine” in fire safety: what is planned for this year
This year, the enterprise plans to purchase:
16 modern large-capacity fire engines of Ukrainian production;
2,000 fire hoses and more than 100 nozzles;
approximately 700 backpack sprayers;
dozens of forest firefighting modules.
Over the past two years, as a result of reorganization and structural simplification, the company’s workforce has decreased by nearly 10% and currently stands at 21.5 thousand employees. The reductions primarily affected administrative positions, including a large number of managerial roles in forestry enterprises.
In 2024, 28% of the payroll fund in the forestry sector was spent on maintaining administrative personnel. Today, this figure has been reduced to just 17%. Last year alone, nearly half a billion hryvnias were saved on management salaries.
The additional funds have been redirected to increase wages for production staff working directly in the forest. Employee motivation has improved, the outflow of specialists has stopped, and young professionals have started joining the company.
Particular attention was given to low-resource regions in the south and east, where forestry workers previously received very low wages. Currently, pay levels across the company have been equalized and now depend on the volume of work performed rather than the value of local resources.
As of Q1 2026, the average salaries in the branches of SE “Forests of Ukraine” are as follows:
• Forester — UAH 46,500
• Assistant Forester — UAH 38,300
• Forest Ranger — UAH 33,500
• Logging Operations Supervisor — UAH 35,800
• Timber Transport Driver — UAH 41,000
• Tractor Operator — UAH 36,500
• Feller — UAH 39,700
• Logger — UAH 31,600
The increase in the payroll fund for production staff has led to a rise in the company’s average salary from UAH 24,000 in 2024 to UAH 38,000 in 2026.
Over the past week, Telegram channels and media outlets have been spreading publications about the alleged critical condition of SFE “Forests of Ukraine” due to multi-billion debt. This narrative has been fabricated by individuals who fail to understand that at the end of each quarter the enterprise accrues significant tax liabilities — VAT, corporate income tax, and a share of net profit — which are paid in the following reporting period.
In particular, in the first quarter of 2026, SFE “Forests of Ukraine” transferred UAH 4 billion to the state budget.
The enterprise also has current obligations to contractors for work completed over the past month, including logging, transportation, and related services. These obligations are fulfilled on time: SFE “Forests of Ukraine” has no overdue payables to its counterparties.
As of January 1, 2026, the company’s financial stability ratio (equity / long-term and current liabilities) stood at 1.72. This is an exceptionally strong indicator, demonstrating the enterprise’s independence from external financial support.
The company fulfilled 98% of its contractual obligations for timber supply in the first quarter, excluding cancellations initiated by buyers themselves.
Today, SFE “Forests of Ukraine” is an example of highly stable operations and a responsible approach to fulfilling its obligations to clients and partners.
All other claims in the mentioned publications are equally false and absurd. These materials show clear signs of being commissioned, are distributed solely for money, and are part of a coordinated PR campaign