Yuriy Bolokhovets, Head of State Enterprise "Forests of Ukraine"
The forest reform is one year old. On September 7, 2022, the Cabinet of Ministers adopted a resolution on Some issues of reforming the management of the forest industry. Finally, the long-awaited equalization of the financial and resource capabilities of the state forestry industry took place. And also the separation of management and control functions, which Ukraine's international partners have been talking about for many years. As a result of the reform, the SE "Forests of Ukraine" and interregional offices of the State Forestry Agency were formed.
I remember what happened the day before. How much noise in the information space. Open MP appeals to the Cabinet of Ministers, publications in the style of "this is treason and everything is lost: forest farms are killed, people are fired, forests are privatized - we will not give it, it will not be allowed."
A year has passed. State forestry works, and not just works, but with a record profit, which already exceeds UAH 2 billion, which is an order of magnitude more than under the forestry system. According to the results of 8 months of 2023, we increased deductions to the state budget of Ukraine by 35% compared to the same period last year. This is a plus of UAH 1.1 billion.
Our record economic performance is not a coincidence or bad market conditions. Demand for wood remains weak, prices are lower than in previous years, because the export of lumber through Ukrainian seaports is blocked, and the European market is oversaturated with its own raw materials.
However, centralization and separation of functions made it possible to qualitatively improve management efficiency.
Transparent purchases, transparent implementation, transparent relations with counterparties. Reduction of non-targeted expenses, detinization. Recruitment, which is significantly less influenced by the outside.
As a result, profitability increased from a few percent to 15 percent.
Forest farms were transformed into branches of state enterprises, losing the status of legal entities. But this in no way led to a managerial collapse, as we were prophesied. Management in the region has a sufficient level of authority to organize the production process. But you have to work within the framework of single corporate standards, a single strategy. Clear KPIs are set for local managers.
Provision of branches did not decrease. It's just that from now on, the most important things - fuel, equipment and many other things - are purchased in bulk (with significant savings) at the central level.
Of course, not everyone is happy. Previously, the local director of the farm could, for example, buy a personal company car with forestry money. After the reform, instead of a car for the director, the branch will receive a fire module and a truck for transporting products, which are more necessary in the work.
By the way, since the beginning of its activity, the State Enterprise "Forests of Ukraine" has not bought a single car for the management and the central office. Only trucks, pickups (fire engines) and other specialized equipment for forest protection were purchased. Most of the equipment was then transferred to the ZSU. In total, more than 800 vehicles have been donated by military foresters since last year, and the assistance continues.
Regarding the state forest protection: it continues to perform its work, because "Forests of Ukraine" is subordinate to the State Forestry Agency. Moreover, a second level of control has actually been created - the internal security of the state-owned enterprise, which works independently and is subordinate to the central apparatus. It became possible to quickly identify schemes and abuses among forestry employees on the ground, to transfer these materials to the National Police and the SBI.
The fire infrastructure is also being strengthened. We add new equipment, raise salaries, introduce new technologies. The legal direction is also progress. The loss of the status of a legal entity by branches did not deprive them of the opportunity to defend the interests of the economy in court. Significantly accelerated work on registration of property rights, where it was not actually carried out.
Environmental aspect. We harvest less than in pre-war times. We do not choose even the limits approved by the Ministry of Environment. Stocks of wood in state-owned enterprises are not decreasing, but growing. The quality of the forest fund is also improving, because more investments are being made in care, creation of modern forest seed centers. Huge work is being done with local communities to preserve self-seeded forests, tens of thousands of hectares of which have already been transferred to us.
The President's "Green Country" program is being implemented - planting is taking place in all regions, even where farms previously did not have the opportunity to finance the afforestation program. This year, for the first time, the state forestry industry is working without subsidies and support from the state budget. However, we ourselves found opportunities to support the farms of non-resource regions, to significantly increase the wages of workers in some regions of the south of the country, where they were scarce during the times of forest farms.
Let's not hide it - there are still enough problems. Many projects are in the process of implementation. We are planning to launch a digital office of the forester. Electronic control of the movement of all machinery working in the forest, and much more. But in a global sense, the success of the reform is an undeniable fact.
