Economy
AI
Estonia's Forestry Sector Reels from Price Drop and State Outsourcing
A 20% revenue collapse at Saaremaa-based wood processor Reta Puit, driven by falling energy wood prices, signals a wider crisis in Estonia's forestry sector as the state-owned manager RMK simultaneously moves to outsource all forest cultivation work.
- —Saaremaa-based wood processing company Reta Puit reported a 20% decrease in revenue for the past year, attributing the decline primarily to falling energy wood prices.
- —The state-owned forestry company RMK is transitioning its forest cultivation work entirely to a service-based model, outsourcing young forest establishment and maintenance to the private sector and phasing out its own forestry workers.
- —A Tõrva-based elixir producer, Shroomwell OÜ, experienced an electricity bill more than double its usual amount in January, raising concerns about the viability of rural businesses amidst energy price fluctuations.
- —Reta Puit's export markets saw Denmark become its largest partner, with exports exceeding 5 million euros, followed by Germany, Sweden, and Latvia.
Recap
The concurrent financial distress in the private wood sector and the state's strategic withdrawal from direct forest management signal a significant restructuring of Estonia's forestry industry. This shift transfers operational risk to private contractors while exposing the entire sector's vulnerability to volatile global energy and commodity prices, with rural enterprises bearing the immediate costs.