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Wood processing companies - the main force of the Latvian economy in 2021-2022 

In November 2022, Prudentia, in cooperation with the Nasdaq offices in the Baltic countries, has offered lists of the most valuable companies in Estonia, Latvia and the Baltics for public discussion. The basis of this initiative is the desire of the project creators to stimulate discussions and strengthen the understanding of the value of companies as an important reference point for future development.

The year 2021, which for most of society is the time of the second lockdown due to Covid-19, was not a depressive period for everyone. For those entrepreneurs who noticed the specific market situation and were able to use it to their advantage, the year 2021 resulted in excellent profit figures, and also in a significant increase of value.

Latvia's most valuable company TOP101, presented to the public for the seventeenth time this year by Prudentia in cooperation with Nasdaq Riga (https://top101.lv/), the timber industry companies, both softwood sawn timber producers and vertically integrated groups of forest management, timber production, logistics and trade , should be highlighted. In Latvia's TOP101 list, as many as 15 such companies were ranked this year, in contrast to Estonia's list of the most valuable companies (https://top101.ee/), in which there are 10 forest industry companies at similar market conditions.

TOP101 forest industry producing companies of the most valuable companies in Latvia

Source: www.top101.lv

If for hardwood plywood producers, such as AS "LATVIJAS FINIERIS" (14th place), approximately half of 2021 was not a period of advantages, then softwood sawn timber producers took advantage of the special market situation when roundwood prices rose, but not so rapidly, as prices in export markets, labor and electricity costs are still at reasonable levels. It is a pleasure that it was used by many companies in the industry, including those who are not included in the TOP101 list. Of course, the biggest increases were made by the most experienced and largest companies in the industry. We would like to especially highlight the jump of KRONOSPAN RIGA from the eighth place to the fifth place, ranking right behind the high-tech company SIA "MIKROTĪKLS". On the other hand, such representatives of the wood industry as SIA "AKZ", SIA "PATA", SIA "GAUJAS KOKS", SIA "KUREKSS" experienced a value jump of more than 100% on an annual basis, which allowed them to move up several dozen places in the TOP101 list. It should be noted that within the TOP101 list of the most valuable companies in Estonia, only the TOFTAN group was able to show a comparable level of value growth (95%), which indicates that Latvian companies have massively used the market conditions in 2021 more effectively than their Estonian counterparts.


Estonia's most valuable companies TOP101 in forest industry


As particularly commendable, I would like to highlight the ability of Latvian forest industry businessmen to respond and cooperate in order to jointly fill several deep-water ships with a cargo capacity of several tens of thousands of cubic meters directly to US ports, as well as to skim the cream from the boom in the US DIY and construction market caused by "helicopter money".

It should be noted that the development of the industry continues, and two of the sixteen new entrants in the TOP101 list represent the wood industry. This year - SIA "STIGA RM" (72nd place) and SIA "KRONUS" (89th place), which has appeared again in the TOP101 after a 13-year break . Both companies in the industry have obvious ambitions and publicly announced investment programs, so we expect an increase in the value of both companies together with other representatives of the industry in next year's TOP101 list as well.


Thanks to the TOP30 list of the most valuable companies in the Baltics (https://top101.lv/baltic-top), we have the unique opportunity to see leading Baltic companies whose ambitions extend beyond national borders. The achievements of the forest industry are also obvious in the Baltic context. We could highlight the profitability and efficiency of Latvian and Estonian forest industry companies against Lithuanian industry representatives - even such a giant as the Lithuanian-based VMG Group failed to overcome the entrance threshold of the Baltic TOP30 .


TOP30 forest industry producing companies of the most valuable companies in the Baltics


The industry's companies still face the challenges of the European green course, the increase in production costs caused by the war in Ukraine in 2022, changes in roundwood, lumber, woodchip import flows, but let's not hide, as well as the opportunities opened up for some companies after the sanctions imposed on Russia and Belarus. Despite the mentioned circumstances, I am convinced that Latvian forest industry companies are one of the best examples of how to use our resources and our potential in the most efficient way, and we, such a small country, are also able to compete in globally.



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