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Since March, SFE “Forests of Ukraine” has had a renewed procurement team. It is led by Mykhailo Stayetskyi, who joined the enterprise from “Ukrposhta”, where one of the most successful procurement functions among large state-owned companies was built.
The goal of the new team is to enhance the efficiency and transparency of procurement at SFE “Forests of Ukraine”, optimize company expenditures, and ensure the implementation of the investment program and key initiatives.
We will discuss the results at the end of the year. However, several important changes have already been initiated in the work of the Procurement Department.
1.Implementation of Category Management
Prozorro does not automatically guarantee the best offer in announced tenders. High-quality tender preparation is required, based on in-depth analysis of each product or service category. Category managers within the Procurement Department analyze and align the enterprise’s internal needs with the external market conditions under which those needs can be met. To this end, they conduct pre-tender market consultations with manufacturers, importers, official dealers, and major players in goods and services markets. They develop procurement terms that make it possible to attract a wider range of bidders, ensuring timely and high-quality fulfillment of the enterprise’s needs at an optimal price and without additional risks. To ensure open and transparent communication with suppliers, work is being carried out on the website of SFE “Forests of Ukraine”.
The updated procurement page contains essential and practical information that suppliers need to participate in tenders. It will also feature announcements of open meetings and consultations with potential participants in the most complex and non-standard procurements, where their external supplier expertise will help define the final tender conditions.
2.Analysis of Performance Indicators
The data structure within the electronic procurement system has been modified at the enterprise level, creating analytical capabilities to assess procurement performance, both centrally and at the level of each Regional Office individually. The Department focuses on cost savings, the level of competition in bidding, their success rate, and the absence of complaints or violations. A dedicated role has been introduced for internal monitoring of Regional Office procurements, providing them with practical and methodological support to improve efficiency. This will enable faster identification of weak points, the implementation of unified approaches to tender documentation development, and the application of best practices for preventing violations of public procurement legislation.
3.Internal Ranking
A framework and criteria are being developed for the internal ranking of procurement specialists in Regional Offices. This will help motivate the strongest performers and support the growth and development of those striving to catch up with the leaders. This approach proved highly effective at “Ukrposhta”, leading to the centralization of the procurement team, which consistently demonstrated excellent results year after year (ranking 2nd in the 2024 Procurer Index).
Mykhailo Stayetskyi is confident that the procurement team at SFE “Forests of Ukraine” is on track for equally strong results.
Most formerly certified branches, now restructured as forestry management units, have successfully renewed their FSC certificates. In both the Poliskyi and Podilskyi Forest Offices, 100% of the certificates have been updated.
In some regions, there is not only renewal, but also an expansion of certified forest management areas.
In forestry management units that now include previously non-certified forest plots, the certification audit process is ongoing. Successful completion of these audits will, in the near future, enable an increase in the total area of FSC-certified forests in Ukraine.
As a result of active hostilities, large areas of forest in Ukraine have been contaminated with explosive ordnance (EO), creating a serious obstacle to forest management activities and the FSC certification process. This issue is especially relevant for the Branch “Pivnichnyi Forest Office”, where work is underway in the Chernihiv and Sumy regions to identify the boundaries of forest areas contaminated with EO. The presence of such areas is one of the key factors considered when making certification decisions for forestry enterprises.
Despite these challenges, SFE “Forests of Ukraine” continues to ensure the uninterrupted supply of certified timber products. Wood-processing enterprises, particularly those focused on export, have the opportunity to purchase certified timber in most resource-rich regions of the country. This supports the export potential of the wood-processing industry and reaffirms SFE “Forests of Ukraine” commitment to the principles of sustainable forest management, even under wartime conditions.
“We are completing the spring reforestation campaign. Priority is being given to restoring areas affected by hostilities. Today, in Kyiv region, near Ivankiv, at the Fenevytske forestry unit, memorial forests were planted.
The event was held in cooperation with Svitlana Hrynchuk, Minister of Environmental Protection and Natural Resources of Ukraine, Natalka Cmoc, Ambassador of Canada to Ukraine, Olha Vasylevska-Smahliuk, Member of Parliament, and Anna Krysiuk, founder of the Greening of the Planet initiative.
The Ivankivske forestry management unit is one of those that endured occupation during the spring of 2022. All forestry units in the area were occupied; most forest compartments came under shelling, and part of the forest was burned due to missile and artillery strikes. A large number of forestry workers remained on site, supporting the Defense Forces of Ukraine, participating in demining efforts, and helping to restore infrastructure. For more than two years, work has been ongoing to clear, prepare, and return to full operational capacity.
Previously, this area was a pure pine stand, heavily contaminated with remnants of Russian munitions, it burned by 60% as a result. Today, we have planted a mixed forest of pine and oak. All seedlings have a closed root system and a survival rate of over 95%. Foresters will also enrich the site by planting viburnum.
Resilient mixed forests will help reduce the risk of large-scale wildfires in the future, as such fires often begin in dry coniferous stands.
SFE “Forests of Ukraine” continues to plant memorial forests — in honor of Ukrainian heroes who fought for our freedom and independence. Of the 45 Forests of Memory created since the beginning of our initiative, a quarter were planted this spring. As a result, this year’s spring reforestation campaign set a record for the number of memorial forests planted,” said Yurii Bolokhovets.
At the beginning of May, the next round of exchange auctions will begin for the conclusion of forward contracts for the second half of 2025.
As a reminder, SFE “Forests of Ukraine” first introduced the practice of six-month fixed-price contracts at the end of last year. At that time, for deliveries in the first half of 2025, the enterprise’s branches offered 416,000 m³ of timber, of which 351,000 m³ were sold (including 168,000 m³ of roundwood and 156,000 m³ of industrial fuelwood).
The experiment proved successful. As of the end of April, 64% of the roundwood volume and 73% of the industrial fuelwood volume had been delivered to buyers, which is fully in line with the delivery schedule.
Long-term contracts contribute to effective planning and the development of production activities, both for processing enterprises and for SFE “Forests of Ukraine.” Thus, positive result is our shared achievement and opens the door to scaling up this new practice.
As previously announced by SFE “Forests of Ukraine,” the volume of timber allocated for forward contracts with delivery in the second half of 2025 has been increased to 30% of the enterprise’s planned harvest.
In total, 1.56 million m³ of timber have been offered at the semi-annual auctions (including 624.4 thousand m³ of roundwood and 928.4 thousand m³ of fuelwood). This is nearly four times more than was offered last year.
Another important update. Based on suggestions from market participants, the method for determining starting prices for timber products has been improved.
Firstly, starting prices are now calculated based on actual transaction prices (excluding speculative purchases that did not result in actual deliveries).
Secondly, the reference period used to calculate starting prices has been extended, which helps to smooth out temporary price spikes.
Therefore, for the Q3 2025 auctions and forward contracts for the second half of 2025, starting prices are based on three indicators: actual transaction prices from Q4 2024 and Q1 2025, as well as the starting prices from Q2 2025 auctions (for identical assortments with the corresponding delivery basis).
Thus, the enterprise has created the conditions for price stabilization in the timber market; however, auction results will ultimately depend on demand. As always, prices will be determined solely by buyers.
SFE “Forests of Ukraine” remains open to dialogue with market participants regarding further improvement of the timber sales system.
Due to the full-scale war, the vehicle fleet of SFE “Forests of Ukraine” has sustained significant losses. Since the beginning of hostilities, forestry workers have transferred more than 1,000 units of equipment to support the front, including hundreds of passenger vehicles. This has further exacerbated the shortage of transport in the forestry sector.
Just a year ago, due to the transfer by SFE “Forests of Ukraine” of equipment to the front lines and the aging of the fleet (over 50% of the vehicles were outdated), there was, on average, less than one vehicle per forestry unit. Some forestry units were left without a single operational vehicle.
In 2024, SFE “Forests of Ukraine” launched a large-scale vehicle renewal program. So far this year, 250 vehicles have already been purchased, reducing the number of forestry units without transport by half. Today, on average, one vehicle covers 2,500 hectares of forest.
However, the need for vehicles remains high, especially in frontline regions, including the forestry enterprises of Kharkiv region, which recently became part of SFE “Forests of Ukraine”. To support their operations, 6 off-road vehicles equipped with firefighting equipment have already been transferred from branches of the company in other regions.
Soon, Slovianskе, Lymanske, Velykoanadolske, Oleshkivske, and Velykokopanivske forestry enterprises will also join SFE “Forests of Ukraine”. They too require modern equipment for forest protection and maintenance.
As part of its investment plan, the company intends to purchase another 179 vehicles in 2025, including:
49 all-wheel-drive pickup trucks, half of which will be equipped with firefighting modules with a 0.5 m³ capacity;
130 high-clearance utility vehicles for patrolling, combating illegal logging, responding to fires, and performing operational tasks.
Procurement is conducted via the Prozorro electronic platform. The vehicle packages will include:
a winter set of tires,
special trunk-mounted equipment,
metal engine protection,
standard road safety kits and accessories.
Last year, recreational areas managed by “Forests of Ukraine” were visited by over 3 million Ukrainians. Thousands of hectares of forest were preserved from potential wildfires thanks to the creation of comfortable, safe, and free places for public recreation.
This year, the recreational development program continues. Since 2023, the enterprise has established more than 100 modern “Lisovychok” sites. In 2025, an additional 50 will be created.
The new recreational sites are fully equipped leisure complexes with developed infrastructure (including children’s and sports playgrounds, water supply, electricity, restrooms, barbecue areas, and more). In most cases, eco-trails are also created nearby, passing through scenic natural locations.
Most of the new sites will be established in the Polissia region and the northern areas, where coniferous stands especially vulnerable to wildfires are predominant.
How do we choose locations for “Lisovychok” sites?
1.Intercepting tourist flows
Recreational sites are placed in areas with the highest concentration of visitors, most often near highways and populated areas. For example, this year a new site was opened along the H-31 highway (Dnipro–Reshetylivka), near the village of Obukhivka. During the Easter holidays, it was completely full.
2.Preventing illegal dumping
Litter left behind after picnics posed a risk of forming an illegal dumping site in the forest along the banks of the Psel River in Sumy. To stop this, a new recreational site is being built there.
3.Ensuring visitor safety from landmine hazards
In Kyiv, Chernihiv, Sumy, Kharkiv regions and others, thousands of hectares of forest are contaminated with explosive ordnance. Dangerous areas are often located near populated places and pose a serious threat to people. One of our new recreational sites is being established near Irpin, where intense fighting took place in 2022.
4.Educational and cultural activities in partnership with communities
The development of the recreational network is part of the enterprise’s cooperation with local communities. One of the districts of the city of Kamianske borders the forest areas of the Pankivske forestry management unit. The local community approached us with a proposal to establish a recreational site here, including sports grounds for football, basketball, and other activities.
During recent meetings with the business community, one of the key demands was to increase harvesting volumes due to a severe shortage of available timber resources.
However, the facts tell a different story. Since the beginning of April, the SFE “Forests of Ukraine” hotline has not received a single complaint regarding failure to fulfill timber supply contracts due to the fault of forestry enterprises (the only case involves a conflict between private businesses in the Carpathian region, where our employees became hostages to the situation). Nevertheless, the volume of uncollected timber at storage sites has increased noticeably.
Outstanding payments from businesses for already delivered products have also increased — now totaling up to UAH 500 million.
Among those failing to meet their obligations are companies ranked in the industry’s top 10.
Currently, business liability for breaching contracts is minimal. Buyers face virtually no risks. When there are significant price fluctuations on the market, it is sometimes easier for buyers to leave a contract unfulfilled and re-enter the auction instead.
SFE “Forests of Ukraine” harvests timber specifically under signed contracts. Therefore, delays caused by repeated auctions carry the risk of timber quality deterioration especially during the warmer months. The accumulation of timber products and overloading of storage facilities lead to increased warehousing costs. Delayed payments negatively affect settlements with service providers (primarily logging contractors). A forced halt disrupts the work of harvesting crews, resulting in the loss of scarce personnel who are difficult to replace.
Our company is actively working to address the issue. We are increasing the share of long-term contracts. The situation will undoubtedly stabilize. However, the issue of business responsibility must be taken into account in future discussions on increasing harvesting volumes. If we demand — we must also be accountable.
In the past week, 31 forest fires occurred across the territory of SFE “Forests of Ukraine”, affecting a total area of 78.4 hectares.
The main cause is human activity. The weather has been exceptionally warm and dry. Many people are spending time in the forests. Despite the ban, some continue to light campfires. There have also been cases of arson involving dry grass and waste.
A military factor also played a role: in the Kyiv region, despite Putin’s so-called “ceasefire,” a fire was caused by a drone crash.
All outbreaks were promptly extinguished. A total of 163 forest protection personnel were involved in the firefighting efforts, along with 23 fire trucks and 15 tractors used either to transport water tanks or to create firebreaks.
A particularly difficult situation occurred in the Balakliia forestry unit in the Kharkiv region, where a forest fire spread across more than 340 hectares. The scale of the fire is explained by the presence of landmines in the forested area. The fire spread into the mined forest from nearby meadows that had been set on fire by local residents. The fire has now been contained through joint efforts of the forest protection service and the State Emergency Service of Ukraine. Full extinguishment is still underway. Unfortunately, during the fire suppression efforts, one of the fire trucks hit an explosive device, with two of our employees on board.
We are announcing a tender for the implementation of an Enterprise Resource Planning (ERP) system.
Procurement and sales, production, HR, investments, legal and land management, planning and budgeting, accounting and taxation, document flow — absolutely all enterprise processes will be unified, digitized, and integrated into a single management system.
Why is this important?
SFE “Forests of Ukraine” includes more than 1,500 forestry units, 9 regional branches, and 22,000 employees. The company manages nearly 7 million hectares of forest fund lands and operates 250,000 fixed assets, including machinery, equipment, and other production tools.
Over 15 million documents are generated annually across the enterprise!
At the same time, the forest enterprises that became part of “Forests of Ukraine” have never had a unified system for data accounting, exchange, and standardization.
The largest Ukrainian state-owned companies (“Ukrposhta”, “Ukrnafta”, and “Ukrzaliznytsia”) are already using ERP systems. In the forestry sector, such a system is being developed for the first time.
Expected economic effect
The system is extremely large-scale (over 5,000 users and dozens of business processes) and requires significant investment in its development.
However, experience shows that in the very first year of operation, an ERP system optimizes company expenses by 2–5% of turnover. In the case of SFE “Forests of Ukraine”, this amounts to at least UAH 500 million!
The funds invested in development and implementation will pay off within the first year of operation. In the future, the company will only continue to save.
ERP and company development
The implementation of an ERP system is recommended by the Accounting Chamber. Among other benefits, the automated system will support the company’s transition to International Financial Reporting Standards (IFRS).
ERP is also key to implementing investment projects — such as mechanized harvesting, the production of seedlings with a closed root system, and more.
Benefits for the state and society
All internal processes within the company will become more transparent. It will be significantly easier for oversight bodies to conduct audits and identify violations of the law. Hiding any misconduct will be virtually impossible.
Benefits for consumers
Through a personal online account, market participants will be able to track the execution of timber supply contracts and access any other relevant information. Data collected by the system regarding the origin of timber will ensure compliance with the requirements of the EU Deforestation Regulation (EUDR).
Implementation Timeline
The project is planned for a three-year period. The contractor will be required to develop a system concept that meets all the requirements of SFE “Forests of Ukraine,” model business processes, deliver and implement the system, and provide its support and updates throughout the duration of the contract. In addition, the contractor must conduct staff training and pilot testing in several branches, followed by scaling the system across the company’s other units.
“The so-called Peasants’ forest’ in the Rivne region — 10,000 hectares of former state forestry lands that had long remained ownerless.
What was once a real forest now resembles a scorched wasteland. Nearly 500,000 stumps were recorded during the inventory process.”
The estimated damage from illegal logging amounts to UAH 3.4 billion — nearly equivalent to the annual budget of the city of Rivne. This reckless logging continued for years and, unlike in state-run forestry enterprises, somehow remained unnoticed by biodiversity advocates.
Thanks to the firm position of Oleksandr Koval, Head of the Rivne Regional Military Administration, the territory was transferred to the Rafalivka forestry management unit of SFE “Forests of Ukraine.” This spring, we are launching a restoration program for the Peasants’ forest.
Investments in forest restoration, protection, safeguarding, and maintenance over the next five years will total nearly UAH 20 million.
These investments are funded entirely by SFE “Forests of Ukraine.” Thanks to the centralization of forest sector management, we now have the capacity to make such contributions. Financial support from the enterprise is provided not only to subsidized regions in the South and East, but also to resource-rich areas such as the Rivne region.
The restoration of the Peasants’ forest will begin using modern technologies and container-grown seedlings. Instead of fire-prone, pest-sensitive, and climate-vulnerable pure conifer stands, mixed and more resilient forests will be established in the Rivne region, combining both coniferous and deciduous tree species.
We are also continuing the forest restoration program in the Polissia region following the “amber fever” of 2015–2017. A total of 4,200 hectares of forest were damaged as a result of illegal amber mining.
Currently, part of these areas has been allocated for legal mining. These lands belong to local communities. SFE “Forests of Ukraine” is engaged as a contractor responsible for reforestation on the reclaimed sites. But we are interested in ensuring that the newly planted forests are properly maintained and protected. That is why we are appealing to local communities to voluntarily transfer these areas to the State Forest Fund, which would guarantee their long-term preservation,” said Yurii Bolokhovets.