2021

LVM Supervisory Board has Approved the Budget for 2021

The Supervisory Board of JSC “Latvia’s State Forests” has approved the company's budget for the year 2021. It is expected that company's revenue this year will reach 324.5 million euros, and profit – 38.7 million euros. The total amount of investments in 2021 is planned to be 55.1 million euros, of which 39.2 million euros or 71% are to be invested in the maintenance and development of forest infrastructure: construction, design and construction supervision of forest roads, forest drainage systems and bridges.

The largest portion of the company's revenue will come from the sale of round timber assortments to Latvian wood processing companies.

“Just like last year, also this year the demand for wood products is forecast to be uneven: in the group of valuable assortments it will remain stable, in turn for other wood assortments – low. There is large volume of wood damaged by insects both in Central and Northern Europe and there is still an overproduction of raw materials for pulp, board and pellets. Due to weak export demand, there is a low demand for technological wood in Latvia,” Jurģis Jansons, Chairman of LVM Supervisory Board, predicts the expected market situation for wood products.

As compared to 2020, lower sales volumes of technological wood are planned this year; we also expect to have lower sales prices. The financial calculations are based on cautious projections, assuming that the Covid-19 pandemic can be overcome without further shocks, but risks still remain. “There has been a lot of unknown in the development of company's budget forecasts for 2021; therefore, decisions will have to be made during the year to adjust them to the actual market situation,” adds the Chairman of LVM Supervisory Board.

Restoration and maintenance of forest stands is planned in larger volumes this year: maintenance of young stands will be carried out in an area of 33.2 thousand hectares, while reforestation, including natural regeneration, is planned in an area of 17.4 thousand hectares.

In order to increase the production volume of forest tree seedlings, an investment project for the establishment of a new tree nursery “Mežvidi” in Jaunkalsnava will be continued this year. Investments in the construction of a seedling sorting and storage complex are to take place in Valmiera tree nursery; in Pope tree nursery, investments will be directed towards the development of a technical project for the construction of a plant sorting and storage complex. It is planned to grow 54.4 million forest tree seedlings in nurseries this year.

One of the environmental goals set in LVM's strategy is to provide nature diversity and recreation services from the forest ecosystem. In 2021, it is planned to maintain 295 tourist sites, of which nine tourist sites will be adapted for visitors with special needs.

The strategic goal of the company is to manage one fifth of the forest lands owned by LVM with the aim of nature protection. LVM will continue to provide quality monitoring measures for black storks, lesser spotted eagles, white–tailed eagles, ospreys, capercaillies, as well as habitats, and will take care of forest meadows and floodplain meadows. In order to minimize the impact of economic activities in those forests where access by logging equipment is difficult, the company uses wooden shield carriageways to increase soil bearing capacity.

The main goal of LVM is to implement sustainable forestry in the state forest properties handed over to its management, ensuring the development of the necessary services, infrastructure and knowledge. On 14 October 2020, LVM Supervisory Board approved the company's medium–term operating strategy for the period until 2025. This year, LVM plans to achieve the economic, environmental and social goals set in the medium–term operating strategy, despite the unstable economic situation in Latvia and in the world as a whole.