NORD+ 2017 INTENSIVE COURSE RURAL DEVELOPMENT IN THE ERA OF GREEN AND SILVER ECONOMIES

HOW TO INCREASE WOOD PRODUCTION IN IN A SUSTAINABLE WAY

Authors:

An Quang

Kalle Vaimala

Titas Muterlevičius

Kārlis Bernāns

RĪGA, 2017

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Contents Contents ...... 2 1. Introduction ...... 3 2. Description of Balvi county ...... 3 Forest industry in ...... 6 3. Theoretical framework ...... 7 Eco-economic strategies in the New Rural Paradigm’ in Europe ...... 7 Smart specialization ...... 8 4. Advantages of using wood products ...... 8 Functional ...... 9 Environmental Advantages ...... 9 5. Research aims and questions ...... 10 Methodology ...... 10 Data sources and sampling ...... 10 Interviews ...... 10 Role of the research group in the interviews ...... 10 Analysis ...... 11 6. Result ...... 11 ...... 11 Head of development and finance department Olga Siņica ...... 11 Director of North business and tourism center Inta Kaļva ...... 12 Balvi Forestry ...... 12 Balvi professional secondary school ...... 13 Companies ...... 13 7. Discussion ...... 16 8. Conclusion ...... 17 References ...... 18 Appendices ...... 19

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1. Introduction

Balvi is one of Latvia’s counties. It is located in north east part of Latvia, next to the border of Russia. Balvi county has around 12 900 inhabitants, and half of them live in counties biggest Balvi, which is also the centre of municipality. As we look around the municipality, it is easily to see that a lot of territory can be considered as rural territories. So there is no surprise, that the main industries in this municipality are agriculture and forestry. There are many different size wood companies in this area. Some of them are small, only 1,2, or 3 people are working there, but there are also big companies, which have more than 50 employees. Most of the companies specialised in wooden object making, such as tables, stairs and wooden cabins. Municipality also tries to increase forestry role in the economic life. According to Balvi county sustainable energy action plan for 2014-2020, wood industry takes an important role in county future. As wood industry plays an important role to municipality life, it is important to investigate what kind of effects it makes to local people and economy. The main research question was how to increase wood production in Balvi county in sustainable way. It is planned to visit some municipality officers, to hear them point of view on forestry, also, it is planned to visit local wood producers, to hear that kind of problems or suggestions do they have. Also, we should consider sustainable economy – are there no harm effects on forests, if this municipality has so many wood producers? Are they keep forests undamaged? We spent 3 days in Balvi town, to get closer look at this issues. In that time we collected all the possible data. Also, we will do our own observation, to check what the real situation in forests is, are they hardly damaged? Or maybe there are no effects? Our research identifies three main obstacles of the wood production in Balvi county which need to be solved. (1) Lacking of co-operation among small companies which leads to the wasting of wooden leftovers (2) Lacking of high quality workers for local businesses (3) old equipment, factory facilities and bad infrastructure need to be upgraded.

2. Description of Balvi county

Balvi county was created in 2009 consisting of ten parishes - Vīksnas, Kubulu, Balvu, Bērzkalnes, Lazdulejas, Vectilžas, Briežuciema, Tilžas, Krišjāņu, Bērzpils and one town – Balvi (Figure 1.). Balvi county is located in NE part of Latvia and bordered by Alūksnes, Viļakas, Baltinavas, Kārsavas, Rēzeknes, Madonas, Lubānas, Rugāju and Gulbenes counties. County is located 220 km away from Rīga, 80 km from Rēzekne, 150 km from Pskov (Russia) and 200 km from Tartu (Estonia). Centre of county is Balvi town which is regional level center. Total area of the county is 1044.5 km2. 41% of county territory is forests and 38% is used for agriculture (Balvi County Council, 2011).

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Figure 1. Balvi county (Made by authors using Envirotech data base, GIS Latvia 10.2)

Balvi town is the largest town of the County and more than a half of the county inhabitants live there. The largest parishes are Kubuli and Tilža (Figure 2.). The average population density in the Balvi county is 14.9 (inhabitant per km2) The Balvi town is part with the biggest density of county. The population structure of the county is mostly based on the settlements, with their centers spread evenly across the county. In these centers the population density can reach about 101 - 1000 people per 1sq/km. In the remote areas the density is much lower only 1-10 people per 1 sq/km. The areas with largest forests and swamps don't have any inhabitants.

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607 Balvi town 386 949 Balvi parish Bērzkalne parish 262 Bērzpils parish

1314 6470 Briežuciems parish Krišjāņi parish 355 Kubuli parish 517 Lazduleja parish 723 Tilža parish Vectilža parish 442 663 Vīksna parish

Figure 2. Population in parishes of Balvi county (Made by authors using CSB data 2017)

In the last six years total population of Balvi county is reduced by 28 % from 17788 in the year 2000 to the 12688 in year 2016 (Figure 3.). 80% of population are Latvians, 16,8% Russians and other largest minorities are Belarusians and Ukrainians (CSB, 2017) Unemployment in Balvi county is 13,5% and it is higher than average unemployment in Latvia but it is close to average unemployment of Latgale statistical region. 20 % of unemployed persons are without job for more than year (State Employment Agency of Latvia, 2017). The average Salary of Balvi county are by 30% lower than average salary in Latvia (CSB, 2017).

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13000

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Figure 3. Population changes in Balvi county during 2000-2016 (Made by authors using CSB data 2017)

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Forest industry in Latvia

The forest industry in Latvia consist of two parts forestry and woodworking. Woodworking industry largely depends on foresty. Latvia have the potential for sustainble development and incrase of rural employment, developing the forest industry and moving it to nature value protection and higher added value products. This will provide a contribution to employment, incomes and preservation of natural values in rural areas (state education development agency, 2012). According to the Central Statistical Bureau (CSP) and Latvian State Forests data forest areas are incrasing reaching 50.3% of the Latvian territory. Latvia is ranked fourth in forest cover ranking in European Union, making almost two per cent of EU forests. Based on the Ministry of the Agriculture rural development strategic plan the current forest lands trend gives expectations for the successful development of the industry both local and export markets (Latvian forest agency, 2015). The number of employed persons in forestry since 2005 have decrased by half. From 35 000 to 17100 due to modernizing of quipment. 90% of workers in industry are mens (state education development agency, 2012). About 50 % of forests are owned by the state and managed by state stock company Latvijas Valsts Meži (Latvian State Forests). The relatively good health of Latvian forests compared with world averages gives them a substantial advantage. Furthermore, the area of regenerated forest is increasing. In 2014, a total area of 37,986 ha of forest was regenerated, of which 49.8 % was in state forests and 50.2 % in privately owned (Investment and Development Agency of Latvia, 2015) The most widespread tree species of Latvia is pine, with total area more than 35 % from all forests. Second and third widespread species are birch (30%) and spruce (18%). Followed by gray alder (7 %) and aspen (4 %). According to Latvian forest policy main targets are:

 Using land tranformation restriction avoid forest cover decline;  Incrase forest land productivity;  Increase forest areas by the abandoned agricultural lands (Ministry of the Agriculture, 1998). Sustainable development of forests are important part forest industry. According to state laws after cutting forest landowners must ensure recovery of forest in five years.

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3. Theoretical framework

Eco-economic strategies in the New Rural Paradigm’ in Europe

In the globalized world, the influence of urbanisation and the intensification and up- scaling of natural productivity make it more difficult for regions to remain distinctive and increase sustainability. Many regions are facing severe ecological, social and economic vulnerabilities. According to Horlings and Mardsen (2014) “The overarching objective for regional development policy-makers and practitioners seems to be the creation of economic advantage through superior productivity performance, innovation systems and the development of a creative class.” There are three motors can be identified as main driving forces involved in rural development.

 Firstly, Cost-price squeeze, where rural economies are being caught in the process of a squeeze between prices and costs of land-based production and the growing market and consumer expectations.  Secondly, crises in agriculture which includes, for example swine flu or food scandals.  Thirdly, growing urban demand for rural goods and services, where new functions, inhabitants and practices are taking root in rural areas. (Horlings & Marsden 2014: 6-7) For sustainable rural development, there can be identified different trajectories, the bio- economy and the eco-economy, which both have different views on ‘green investments’. The ‘place-based’ eco-economy can provide cumulative net benefits that add value to rural and regional spaces in both ecological and economic ways. This is the reason why eco-economic regional development path is seen as a political choice for regional development. (Horlings & Marsden 2014: 6-7) In European rural regions, Horling and Mardsen’s research provided three different pathways which “deepen the insight in the interplay between the ‘governance of markets’ and the other domains of the rural web. They also reflect the ongoing diversification of agriculture as well as a shift to a broader, more integrative regional approach, including an increased role of nonagricultural actors.”

 Firstly, (niche-) innovation, which specifies the different ways in which the relation between ‘governance of markets’, ‘novelty’ and ‘sustainability’ take shape. These innovations can be linked to a sustainability domain, for example using renewable rural sources.  Second pathway is called new interfaces, and it contains an idea that new interfaces are established between (public and private) actors, between producers and consumers, within the production chain, between sectors, functions, city and countryside or between domains of regional development.  The third pathway, re-orientation on territorial capital, can potentially strengthen the relation between governance of markets, endogeneity and sustainability, which can lead to more integrative regional development. (Horlings & Mardsen 2014: 9-15)

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Smart specialization

The concepts of smart, sustainable, and inclusive growth are the main aim of the growth strategy Europe 2020 and are highlighted as key objectives and mutually reinforcing priorities to reach the stated growth targets. The objective of “smart green” Europe is to build a smart inclusive society and a world-leading economy based on knowledge, innovation and future technologies which integrates sustainable urban and rural development. It is designed as a Strategic Investment of European Significance in Urban and Natural Environment, Energy, Transport, Broadband, Education, Research and Innovation, Economy and Business. The Project is combining all the key investment areas such as mobility, SME (small and medium-sized businesses)-support, green energy, resource and energy efficiency, digital infrastructure and Information and Communication Technology in a systematic, sustainable and inclusive way. The “Smart Green Europe” implies the highest economic and societal and environmental return, promising stable economic recovery, long-term growth, quality jobs and sustainable competitiveness. The smart green or sustainable growth ideas are connected with green growth, green innovations, and climate change mitigation. Strategy for achieving sustainable development should be focused on intervening in the economy in a way that creates synergies between economic growth and environmental protection. In this way, countries can build a green economy in which investments in resource savings as well as sustainable management of natural capital are drivers of growth, the central idea being that economies that rely more on sustainable development objectives provide opportunities for using financial resources to better meet development needs and reducing the vulnerability of socioeconomic systems to environmental change and resource constraints. According to Lucia Naldi (2014), the smart development policies of the 2020 Europe growth strategy are not the one-size-fits-all regional policy models and should be reformulated into policies that are both place-based and knowledge-based which fit specific rural regions. Therefore, the future policy targets at the EU level should be reached by policy models that act on local competences, established regional advantages, knowledge, and innovation. Additionally, identifying the sectors, the technological areas, or their main competitive advantage, and then focus on regional policies to promote innovation in these fields. In the case of Balvi, after reviewing its competitive advantages, we realize that wood production is the best sector which policy-maker of the region could focus to promote using Horling and Mardsen ‘s pathway above (new interfaces and re-orientation on territorial capital).

4. Advantages of using wood products

Nowadays, it is necessary to change the direction of the building sector and industry towards a sustainable development, trying to satisfy the actual needs without compromise the next generations’ needs. To carry out this goal, the wood and its derivative products are one of the most suitable materials, due to the technical and environmental qualities. Moreover, the wood brings other excellent qualities as a high

8 resistance, durability, adaptability, versatility. Therefore, some reason to choose woods products are: Functional  Durable material. Due to the new technical treatment in the wood products, the good qualities and properties of the products stay longer and just with a simply maintenance, is possible to recover the initial properties.

 Reusable, recycle and recoverable material. Timber is a renewable material that comes directly from trees in sustainable forest management.

 Due to the cellular structure, timber is and excellent thermal insulator, avoiding sudden change of temperature, reducing the need of heating and cooling.

 Keep the hygroscopic balance with the environment, due to its porous structure.

 Excellent acoustic insulator, due to the chemical composition in lignin and cellulose that absorb an important energy of acoustic waves, with the reduction of acoustic pollution and other phenomenon as reverberation.

 Timber is bound with efficiency energetic. Timber products are really competitive because the energy loss, mainly calorific, is very little compared with other materials, due to its porous structure full of air that becomes timber in the best thermal and acoustic insulator.

 Beneficial for health due to timber product give a subjective comfort.

 Adaptability.

 Short time to staging.

 Structural stability.

 Better resistance against fire than other materials due to the low thermal conductivity. Environmental Advantages  Wood is the only material that reduces the CO2 emission, as play an important role to slow down Climatic Change.

 Timber needs less energy in its manufacturing process, so has an environmental impact lower than other materials in their life service cycle.

 Wood is an important drain of CO2 meanwhile the products keep their life service cycle.

 Wood is a natural resource, renewable, whose consume help the local sustainable management of forests and environmental protection.

 Sustainable forestry management, timber industry could continue it activity in the future, also strengthen the sense of social and environmental responsibility.

 Timber products make easier to carry out the commitments of the Kyoto protocol.

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5. Research aims and questions

Methodology

In the case of Balvi region, we mainly use a qualitative approach. Some quantitative data such as descriptive statistics have been used as a background data, but the main focus have been in qualitative methods. In qualitative research, the essential thing is in the meanings, which are manifested in the most varied ways (Varto 1992: 24). Research can never achieve the phenomenon in its entirety and in all depth. However, by through research, well designed and implemented research set-ups, repeat studies and the approach of studying phenomenon from multiple perspectives, can reach a wide range of knowledge and thus increase understanding of phenomena-related causation and the nature of the phenomenon. (Töttö 2004) Data sources and sampling

Our main research questions require a deep insight which could only be answered by interviews, especially people who are participating in development planning and sustainable wood production of the region. In light of their answers, the research group can build a comprehensive overwiew of the situation. Additionally, observation was not only an alternative choice for our group to verify our knowledge but also gave us more data and helped us in identifying the solution for Balvi’s wood production problem. The interviews were arranged by our contacts persons in Balvi, Mrs. Olga Siņica development department of Balvi and Mrs Inta Kaļva director of North Latgale business and tourism center. We managed to interview people from five small local companies that use wood as their material for the products, one bigger saw company, one wood cutting company and Balvi vocational and secondary school. Interviews

Interviews were held in each company’s own premises all around Balvi. Except for two interviews, the spoken language was Latvian, which was translated in the fly to English by Karlis. We used a semi-structured thematic interview method and in addition to that we observed the companies’ premise and equipment’s. In every interview, our whole four-person group were present. The length of the interviews varied between 20-60 minutes. Role of the research group in the interviews

The interviews with six companies, one professional school, development department and business center were conducted with full members of our group. According to the bilingual characteristic of our interviews (some interviewees speak Latvian, some speak English, some speak both), we had the careful and clearly job assignment beforehand. Therefore, we were not surprised and conducted our interviews smoothly from the beginning.

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As aforementioned, we assign our work into a good balance and division of tasks with one local student (Karlis) who responsible for interviewing and translating into English when there were some remarkable information. Another student always took note in the whole interview process (Kalle), one recorded everything (An) and the last one responsible for asking in English and assisting the local student with language problems or sub-questions in semi structured interviews (Titas). Analysis

We try to analyze our interview data base on the structure of theoretical framework. After interviews and observations, we have concluded and identified the issue of the wood production industry in Balvi. The analysis of data and results would be used to prove our hypothesis within the theoretical framework.

6. Result

Based on our interviews plan, the result would be analyzed and acknowledged from two perspectives, one from the municipality and the other from companies. This division helps us to have a balanced overview about the reality of wood production in Balvi. Therefore, we can identify the problems from different angles and develop some potential solutions.

Municipality

Head of development and finance department Olga Siņica

According to our interview with head of development and finance department Olga Siņica, the main problem in municipality is depopulation and aging, also unemployment. Due to depopulation and the end of soviet, era, there is a lot of abandoned buildings in Balvi’s territory. The municipality has a plan for reconstruction some of these buildings with EU funds to attract investments and some of the local companies could use these building to increase their business. consequently, this plan could help reducing unemployment in Balvi. Another significant problem is infrastructure. There is a large amount of roads need to be reconstructed. One of the reasons for bad infrastructure is wood industry. In soviet times, railway connected Balvi with the port of Rīga, nowadays railway is removed so all wood productions are transported by roads and these heavy trucks caused heavy damages to the roads.

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Director of North Latgale business and tourism center Inta Kaļva

Wood industry plays an important role in Balvi municipality, it is the second most important sector after farming. There are all kind of wood industry companies in Balvi municipality - from forest cutting companies, sawing companies and wood production companies. Most of the companies are small with only 3-10 employees. At the beginning of the nineties, there were so many small sawmill companies which produced planks. After two large companies (one in Rēzekne another near ) started to produce cheaper planks, these small companies needed to find they own specialization. Instead of helping these companies directly, the municipality improve infrastructures which can help them in business. Additionally, there is employment problems. Indeed, unemployees usually don't want to work hard while a lot of companies need more workers but they can't find them.

Balvi Forestry

The state forests own 50% of all forests, private persons and companies own around 22 % each and municipality own around 5%. Each person or company which want to cut forest must make the forest management plan. After cutting forest they have to regrowth forest in 5 years. Most widespread species in state forest are pine. State forest also have very good infrastructure and usually are replanting the forests. But private companies don't have so much money so they don’t have so good infrastructure and only 5% of them replants the forest. Some of them use EU funds for replanting. Each tree species needs to reach certain year of age before being cut, also there are a lot of nature protection areas in municipality where you can't cut the forests.

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Balvi professional secondary school

For students after 9th grade, the Balvi professional secondary school offers special education in woodworking. These students who choose special education can also take ordinary subjects and after 4 years they can get diploma. In specialization, there are only 5-6 students educate per year and most of them are men. The problem for school is that there are many similar schools in Latvia and they need to attract more students. They will got the newest technology by using EU funds and hope this will attract more people. Also, municipality provides some small scholarships for students who have good grades. Best students don’t have any problems in finding job suited with their profession, but usually best students start working in Rīga, some large companies or even abroad. Only a few of students stay in Balvi.

Companies

Our interviews and observation show various issues from the wood production of the region. Accordingly, most of the wood production companies in Balvi are small and medium size, specialized in various types of production process. Typically, small companies specialise in 2-5 kind of different products and medium large companies have one or two main products they make. The products that are made in the companies we visited were small decorative wood products, garden furniture, stairs, pieces of firewood, wooden panels, tables, chairs and basically anything that can be made from wood in a small workplace. Also, the machines used for work were usually old and simple, for instance, some machines are 40 or even 50-year-old from the Soviet time. Typically, one company has only one or two machines to work with.

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When it comes to market, most of the companies export their products and the main market mentioned for exporting were European countries, Nordics countries especially Norway. Some companies for example, one small motorcycle company, sells to locals and also exchanges firewood to old motorbikes if there is a chance. However, the owner is thinking about exporting somewhere else, if he is offered a good price or good motorbikes. Most of our research companies are small and medium size with only 1-5 or 10 workers except the biggest one has generally 55 people who work for two separate proxy companies (one for selling and the other for logistics). About the resource of workforce, mostly come from the region or local people except one Polish worker. However, the quality of local workforce is not so highly appreciated. For example, one owner complains he could not recruit enough high quality workers from local professional school. Moreover, the good ones went to or bigger cities for higher salaries and better opportunities for their careers. The wood materials for companies mostly come from local forest which are either state or private owned. Since some companies look for the cheapest materials and specific wood which is difficult to get a certification from Balvi forestry department, therefore the wood materials are bought from Riga, Ukraine or Estonia constitute a remarkable proportion (40%) of wood secondary market in Balvi. Reproducing leftovers is one of the main problems of keeping the sustainability in Balvi. Accordingly, our report notes that most of the wood production companies don’t have a proper or effective plan to reproduce leftovers from their production process. Consequently, they simply burn them for their own heating, except the biggest company who have enough leftovers to sell for local people. However, there is one company has a promising plan for using its small piece leftovers to make toys in the end of this year.

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Basically, all the companies can approach EU funds. The small and medium companies receive EU money for repairing factories, buying, updating, improving new machine, expanding business etc. Nevertheless, not all the companies need EU money for expanding, for instance, the owner of the biggest company we interviewed reveals that he doesn’t need any supports due to his stable economic condition. As aforementioned, the municipality only support by improving infrastructure, roads, etc. Thus, they don’t have any financial support for the entrepreneurs. Fundamentally, their factory buildings are built from Soviet time, garages in front of their houses or they build small workshop buildings. As our observation, the buildings from Soviet time are mostly old and in bad condition without any efficient heating systems. This leads to the fact that all the small companies have a plan to use their leftovers for heating their workplaces except one who plans to establish a new wooden toy production from wooden leftovers. Another interesting plan is making heating pellets from leftovers.

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To sum up, some issues we found through our observations and interviews process is lacking co-operation among small wood production companies. Difficult in lending money from banks and the EU for bigger projects can be considered as another limitation. Additionally, the demand for good workers in Balvi is huge while the supply from the only professional school is limited as mentioned above.

7. Discussion

The research identifies three main obstacles of the wood production in Balvi county which need to be solved. (1) Lacking of co-operation among small companies which leads to the wasting of wooden leftovers (2) Lacking of high quality workers for local businesses (3) old equipment, factory facilities and bad infrastructure need to be upgraded. For the first problem, we realize that the communication among these companies is weak. For instance, one owner from a wood exporting company was asked about selling his wooden leftovers for the company which has a plan to make toys, then he answers “I don’t even think about it at the moment, maybe in the future, it could be an interesting idea”. Therefore, to resolve this problem, we suggest more co-operation among these entrepreneurs. Of course, to avoid misunderstanding, unfair competition and mistrusting among each others as well, a proper mechanism for co-operation need to be established. A cooperative organization can be a promising solution. In this case, we recommend the organization of Latraps, a successful cooperative company which is working under the cooperative mechanism among small farmers. A potential cooperative organization of wood production in Balvi could resolve the question for using wooden leftovers. For example, a cooperating company that collects all the leftover wood, that would other ways be just burned away, for selling as a material for making wooden pellets. The second problem is easy to understand but hard to find an efficient solution due to the general socio-economic condition of the Balvi county. As aforementioned, the professional school provides only 5-6 workers per year but they rather move to another bigger cities, Riga or even working abroad than staying in Balvi to find a job due to the urbanisation process. It’s impossible to find a solution for a global phenomenon within the scope of our research. Lots of the equipment and factory facilities, infrastructure are very old and need to be upgraded to make Balvi’s companies more competitive in larger markets. However, the municipality has a proper plan to reconstruct unused Soviet buildings in the near future as mentioned above. EU’s funding also helps companies to survive, but it is not enough for them to expand their business. As discussed above, it’s difficult to get money for bigger projects from EU and banks due to the strict economic bureaucracy. One owner in our interviews reveal that it is hard to start a company but once you have one, it’s easier to get small funding from the EU. Therefore, we suggest that municipality should have a policy to help young companies to utilize their preparation for applying for support from the EU when they want to expand their business. For example, supporting for people who want to start a company.

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8. Conclusion

Generally, wood production is playing a major role in Balvi’s economy. Typical companies that are working with wood are small or medium size and specialized for making high quality wood products for exporting to European market, especially Nordics countries. However, machinery and infrastructure are old and they need to be upgraded for expanding business. Another serious problem is the limitation of high quality workers. Also, lack of co-operation between small companies leads to unnecessary wasting of wooden left over. After analysing, we figured out that solution for lacking of high quality workers cannot be solved in our scope of research. Municipality’s support for establishing new companies would help improve business. EU’s funding will help upgrade machinery and better factory buildings. Cooperation among companies could help increase sustainability and effectiveness usage of leftovers. However, in this research we don’t have a proper solution for increase the number of high quality workers. Some sort of cooperation between small companies could deal with the wooden leftover.

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References

Balvi Municipality. 2010. Balvu novada attīstības programma 2011.-2017.gadam (Balvi county development program for 2011 to 2017). Available online http://www.balvi.lv/files/Lemumi/pielikumi/Protokols_17_2011/attistibas%20progra mma.pdf Accessed May 15, 2017. Central Statistical Bureau of Latvia. 2017. Statistikas datubāzes (Statistics databases). Available online: http://www.csb.gov.lv/dati/statistikas-datubazes-28270.html Accessed May 15, 2017 Horlings, L & Marsden, T (2014). Exploring the ‘New Rural Paradigm’ in Europe: Eco- economic strategies as a counterforce to the global competitiveness agenda. European Urban and Regional Studies, Vol 21(I) 4-20

Investment and Development Agency of Latvia, 2015. Forest Industry Available online: http://www.liaa.gov.lv/en/trade/industry-profiles/forest-industry Accessed May 17, 2017 Latvian forest agency, 2015. Par Latvijas mežiem (About Latvian forests) Available online: http://www.lmd.lv/par-latvijas-meziem Accessed May 17, 2017 Ministry of the Agriculture, 1998. Latvijas meža politika (Latvian forest policy) Available online: https://www.zm.gov.lv/mezi/statiskas-lapas/nozares-strategijas- politikas-dokumenti/latvijas-meza-politika?nid=328#jump Accessed May 16, 2017 Naldi, L. 2014. What is Smart Rural Development. Journal of Rural Studies 40 (2015) State education development agency, 2012. Kokrūpniecības nozares apraksts (description of timber industry) Available online: http://www.lbas.lv/upload/stuff/201206/kokrupnieciba_2012_pet.pdf Accessed May 15, 2017 State Employment Agency of Latvia, 2017. APKOPOTĀ STATISTIKA (compilation of statistics) Available online: http://www.nva.gov.lv/index.php?cid=6 Accessed May 15, 2017 Töttö, Pertti 2004. Syvällistä ja pinnallista. Teoria, empiria ja kausaalisuus sosiaalitutkimuksessa. Tampere: Vastapaino Varto, Juha 1992. Laadullisen tutkimuksen metodologia. Helsinki: Kirjayhtymä

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Appendices

Framework of interviews for companies: 1. Shortly describe what kind of products do you make. 2. How many employees do you have, and are they local? 3. Where do you get your wood materials? 4. What do you do with the leftover wood? 5. Do you have any co-operation with another companies? 6. Do you use any green resources? 7. Do you replant forest after cutting them? 8. Are you planning to expand your company? 9. Do you get any support from the EU or from municipality? 10. What is your main market? 11. What is your plan for the future?

Because we conducted semi-structured interviews structure of interviews varied and additional questions would be added if needed.

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