Long-term contracts

We sell the majority of timber on the basis of long-term contracts and conclude contracts only with companies that enhance the value of timber in Estonia.

All of RMK’s long-term timber sales contracts are publicly available. This means anyone can view which companies purchase timber from RMK, including details about timber types, prices, and volumes.

We sell up to 85 per cent of sawlogs and nearly 60 per cent of firewood and pulpwood through long-term contracts.

Local valorisation of wood is not a problem in the case of logs, as Estonia’s sawmill and plywood industry is world-class and Estonian logs are processed into long-lived products on-site in Estonia. The valorisation of pulpwood is in a worse state. Since we want to support the domestic processing of pulpwood, we stopped selling firewood and pulpwood to companies that export it in an unprocessed form from Estonia as of 2024.

As a rule, we conclude long-term contracts for five years, but we agree on the exact volumes and price of the timber to be purchased each year for each delivery period separately. There are three delivery periods per year for the sale of logs and four delivery periods for the sale of stockpiled wood.

Before each period, entrepreneurs submit their purchase wishes and offers to RMK in competition with each other. Based on the price offers we receive, we will determine the best prices to regulate the market price for timber. Prices vary for customers mainly due to the distance between the location of timber stocks and the location of the buyer’s warehouse. When evaluating offers, we also use price points that are given depending on how efficiently the company operates, processes the timber, and creates added value.

We treat both large and small companies in the same way, which is why the wood volumes sold range from a few hundred cubic metres to more than 100,000 cubic metres. RMK has long-term contracts with about a hundred companies, which produce nearly 90 per cent of the Estonian timber industry’s total production.

Long-term agreements help to keep the Estonian timber market stable and provide companies with raw material security. They also allow for greater flexibility in the operational amendment of supply volumes and conditions and ensure that RMK has the necessary capacity and stability to perform all the tasks arising from the law.