In society, discussions occasionally raise whether current level of wood cutting in Latvia is not too high to maintain sustainable forest industry and biodiversity. Cutting volumes for the state owned forests are calculated based on the model whose aim is to even the timber stock of each tree species in a long term period. The wood resource extraction in the private forests takes place according to free market conditions and depending on market prices. Therefore amount of round wood delivered from private forests can shift in a large range. The research had two main tasks. First task was to survey primary wood processing companies in Latvia and gather information about their round wood processing volumes, how their processing volumes divides between softwoods and hardwoods, dimensions of round wood companies demand for production and assortment of produced materials. Second task was to evaluate round wood utilization balance in the territory of Latvia and estimate if current use of timber resources in Latvia corresponds to amounts that are sustainable. Research results showed that consumption of softwood timber in Latvia is close to maximum to perform sustainable forestry, but consumption of hardwoods is possible to increase at least by 20–25%. Survey of primary wood processing companies showed that round wood processing volumes in Latvia vary from 6 to 7 million m3 annually and that large enterprises, which count only for 4% from total number of primary wood processing entities, process two thirds from annual round wood volume in country.

To forecast how different indices describing Latvian forest industry will develop in the future, the decision support program which is based on the research of supply chains and production processes as well as on systematic analysis of the whole industry should be developed. One of the most common types of analysis is modelling of processes. In this paper processes of forestry and wood processing in Latvia are modelled by using general approach for system modelling, and each process is described as an abstract system where only its input and output values were identified. Correlations of input and output value time series with a simple and multiple regression analysis method were analyzed. Regression analysis was created for 77 pairs of indices which theoretically could have significant correlations. Input and output factor linear regression analysis for set of processes Forestry and Wood processing shows that not always there is significant correlation between time series of chosen model factors. Some of correlations between time series of input and output data in the model of forest sector even showed controversial results. The amount of information about processes and their quantitative indicators in Latvian wood processing industry is not sufficient for development of precise simulation models. There is need to develop a list of criteria for missing information and carry out its collection process.

The furniture industry is an innovative industry that produces high added value products and its turnover is several billions of Euros in Europe, and there mainly work small and medium-sized enterprises (abbreviation – SMEs). Nowadays competitiveness is an essential factor for both a country and its enterprises in the process of dealing with changing market conditions. The global market is changing and for enterprises it is too hard to position themselves and find the way how to differ from other competitors. From 2006 until 2010 a Latvian furniture market value, numbers of employees and enterprises in the sector and its share in GDP has decreased. As a result, there are the serious challenges to be met and increase their competitiveness in domestic and export markets. The author has made an in-depth research into influencing competitiveness factors of SME micro level in the furniture manufacturing industry. The study objective was to identify the key internal factors which influence the SME of Latvian furniture manufacturers. The aim was to obtain an internal factor of competitiveness assessment of the 30 respondents by random sampling method and expert method of factor assessment. The enterprises need to constantly increase their competitiveness. The internal factors influencing the competitiveness of SMEs are connected with the products, manufacturing of products, financial situation, management and marketing activities. The competitiveness level of Latvia`s SMEs in the furniture manufacturing has been evaluated as average in 70% of cases. Only 27% of the enterprises show a good level of competitiveness.

Forest industry consists of two related industries forestry and wood processing. Wood processing industry, which is a direct consumer of timber resources generated by forestry sector is eager to search for an answer about kind and amount of round wood they can count on in long term period. In Latvia for every five years State Forest Service calculates cutting volumes for the state owned forests based on models which do not guarantee safe long term income maximization. Long term cutting volumes and assortments in privately owned forests have not been analyzed very deeply. The aim of the research was to estimate the hypothetic amount of different timber resources available in the territory of Latvia for wood processing industry within next hundred years and look at geographic location of timber resources and woodworking companies. Research results showed that forests in Latvia are not being depleted and current annual cutting volumes could be increased. Geographic observation of primary wood processing companies showed that most of them are located close to large cities or near main roads of Latvia. This location makes easier round wood deliveries to factory and facilitates transportation of produced goods to an end customer. To clarify where and what profile (softwood or hardwood) production volumes should be increased, model of timber resource demand indicator was implemented.

The energy-intensive timber industry enterprises have a significant role in Latvia’s manufacturing sector, contributing to the country’s sustainable economic development. They maintain the economic well-being of residents of Latvia’s rural regions and represent a substantial proportion of output value and export volume in the manufacturing sector and the state economy. Due to surging energy prices that negatively impact production costs, it is more difficult for enterprises to compete in foreign markets. The study aims to analyse energy consumption trends in timber industry enterprises in Latvia to propose activities for reducing energy costs, thus promoting the international competitiveness of timber industry enterprises. The analysis is based on data from Europe’s power market Nord Pool and databases of the Official Statistics Portal of Latvia. Methods used: statistical data analysis using time series analysis and expert interviews. The research results show that a significant threat to the competitiveness of enterprises is the increasing price of electricity, which is the second most consumed energy resource, accounting for nearly 15% of the total annual energy consumption of timber industry enterprises. To address high electricity costs, enterprises have the opportunity to install solar panels. Calculations show that, at an electricity price of 0.198 EUR per kWh, investments could lead to a five-year payback period with an ROI of 7.52%. At a lower electricity price of 0.13 EUR per kWh, the payback period would extend to ten years but still provide a reasonable ROI of 5.2%.