The head of the State Forest Resources Agency of Ukraine, Viktor Smal, signed an order to transform the state-owned enterprise ‘Forests of Ukraine’ into a joint-stock company and to establish a commission for transformation and inventory. This is the final stage of the forestry sector reform that began three years ago.
‘The corporatisation of the State Enterprise ’Forests of Ukraine” is provided for in the Government’s Action Plan for 2025, and it is also part of our commitments to our European partners under the Ukraine Facility. This harmonises with EU corporate rules and provides a management model that is understandable to international investors, which is a prerequisite for attracting investment,” said Minister of Economy, Environment and Agriculture Oleksiy Sobolev.
‘The transformation into a joint-stock company will allow the company to take a more flexible approach to the implementation of investment projects. A joint-stock company also has the right to allocate funds from the sale of illiquid assets to the development of the company, which strengthens its capabilities and operational efficiency,’ explained Deputy Minister of Economy, Environment and Agriculture of Ukraine Yegor Perelygin.
‘Corporatisation is an opportunity to continue economic growth through large-scale investments in infrastructure development (construction of forest roads), the purchase of new equipment (mechanised harvesting) and the introduction of automated production process management systems,’ emphasised Viktor Smal, Head of the State Forest Resources Agency.
The main conditions for transforming the State Enterprise ‘Forests of Ukraine’ into a joint-stock company are as follows:
– the state will remain the owner of forestry land that is in permanent use by the State Enterprise ‘Forests of Ukraine’ (the joint-stock company will only be a forest user);
– privatisation of forest resources will continue to be prohibited by the Law ‘On Privatisation of State and Municipal Property’;
– the authorised capital of JSC ‘Forests of Ukraine’ will be formed at the expense of the enterprise’s property (real estate, means of production, etc.);
– 100% of the shares of ‘Forests of Ukraine’ will belong to the state.
Corporatisation will enable Forests of Ukraine to upgrade its material and technical base, introduce modern technologies, and improve production efficiency and financial performance.
For reference: the corporatisation process is provided for by Resolution of the Cabinet of Ministers of Ukraine No. 1003 of 7 September 2022, ‘Certain Issues of Reforming Forest Sector Management’.
In addition, in early 2025, parliament passed a law requiring state-owned enterprises to be converted into joint-stock companies or limited liability companies.
The State Enterprise ‘Forests of Ukraine’ is the largest forest user in the country and one of the largest state forest companies in Europe. The enterprise employs over 22,000 people and manages 6.6 million hectares of forest land.
