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JSC “Latvia’s State Forests” to Pay 90.5 Million Euros to the State Budget

The shareholders' meeting of JSC “Latvia’s State Forests” (LVM) has approved the annual report for 2020, which shows that last year's profit before corporate income tax is 76.1 million euros. The company's shareholders' meeting decided to pay 90.5 million euros to the State budget, of which 72.4 million euros in dividends for the use of State capital and 18.1 million euros as corporate income tax.

In 2020, 7.52 million cubic metres of wood, including 7.23 million cubic metres of roundwood, were sold to Latvian wood processing companies, exceeding the planned sales volume by 2%. Thanks to investments in the forest road logistics network, LVM was able to provide its customers with a continuous flow of raw materials also at the beginning of 2020, when the first months of the year were warm and there was no frost. The warm winter had a negative impact on the sales volumes of energy chips. Weather in the early months of 2020 reduced the demand for woodchips for heat consumption. Moreover, large quantities of cheap products were imported from Belarus.

Last year, LVM cultivated young stands in an area of 31.4 thousand hectares, which is slightly more than a year before. In 2020, the forest was restored and afforested in an area of 10.7 thousand hectares, while the natural regeneration or afforestation took place in an area of 5.6 thousand hectares.

In 2020, 1.2 million euros were invested in the purchase of land with the aim to increase the managed forest area. Of the 595 offers received, in 59 cases purchase agreements were concluded for the purchase of 500.4 hectares of forest land.

In 2020, LVM sold the largest amount of forest tree seedlings to date - 56.4 million. Of these, 49% or 27.8 million seedlings were sold to external buyers, including 13.1 million exported - mostly to Sweden, in small quantities to Estonia and Lithuania. Last year, a great deal of attention was paid to reducing the use of chemical plant protection products in nurseries by developing and expanding the treatment of seedlings against damage caused by the large pine weevil using wax and sand-glue mixture. In 2020, 14.9 million seedlings were treated in this way, of which 7.7 million seedlings were exported.

Last year, LVM sold 520 thousand cubic metres of mineral materials and their mixtures, of them 95% were certified. This confirms that during the control of the production process of mineral materials and their mixtures at the mining sites, the highest quality assessment principles are observed and the requirements specified in the standards are met.

In 2020, the company underwent 18 PEFC ™ and FSC® certification audits, including two wood supply chain audits. In addition, the auditors examined issues related to social responsibility, environmental management, compliance with labour protection requirements and other relevant aspects included in the standards. None of the audits identified any significant, systematic non-compliances.