Contracted but not collected: 100,000 m³ of roundwood awaits shipment at SFE “Forests of Ukraine” storage sites

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.