The robust economy in new European Union member Latvia is wood-fired, with timber representing nearly one-third of exports and bringing in almost one billion euros last year, when output grew by 8.5 percent.

"Today European experts acknowledge that the timber industry in Latvia is among the healthiest in Europe, comparable with Sweden and Austria," Tomass Kotovics, head of communication at Latvijas Valsts Mezi (Latvian State Forests which manages state forests, told AFP.

Since Latvia shook off Soviet occupation in the early 1990s, the forestry industry has put on value every year, he said, but in the past few years, growth has been value-based owing largely to reforms undertaken in 1999-2000.

"In the early 1990s, growth was volume-based as the industry expanded, but now to maintain sustainability of our forests, we focus on value-added products such as kiln-dried timber, which is ready for making furniture," Kotovics said.

"In the past five years, our policy has been one of maximum added value."

In line with that policy, Latvian companies have invested in modern technology to produce more labour- and knowledge-intensive joinery and carpentry products, such as window frames and doors.

In production terms, the value of those products has increased ten-fold since 1993, according to the ministry of agriculture.

Latvia's main trading partner for timber and finished wood products is Britain, Kotovics said.

Some 80 percent of timber exports go to other EU member states, with Germany, the Netherlands and Denmark "also important partners," according to Kotovics.

"Even in Soviet times, most of our exports went to the UK, but not under a Latvian trade name," he said.

"They were sold by a big Soviet conglomerate, without Latvian involvement. Goods first went eastward to Moscow, so it looked as if we were selling to the Soviet Union. But in fact ultimately the products were sold to the UK," he said.

Latvia was occupied for five decades by the Soviet Union, regaining independence in August 1991.

Under Soviet occupation, "Latvia also made lots of cheap chipboard furniture for the eastern market. After regaining independence, that sector had to restart from zero," Kotovics said.

Today, furniture manufacturing represents 36 percent of the timber industry, according to the agriculture ministry.

The value of furniture manufactured in Latvia in 2003 was 90.5 million lats (168 million dollars,130 million euros), up 11.0 percent compared with the previous year.

Eighty percent of furniture produced in 2003 was exported, mainly to Britain, Denmark and Germany.

Domestic timber sales have also helped fuel growth, driven by a construction boom in Latvia, which joined the EU in May last year.

SVM, a small timber company based in the Riga suburb of Pinki which takes prime lumber and machines it into tongue and groove panelling for sale almost exclusively to the domestic market, saw turnover double last year to 200,000 lats from 2003.

A powerful storm that lashed northern Europe -- including the Baltic states -- in January slowed, but did not stall, Latvian timber's power-surge.

"The hardest-hit sector was pulp, raw material for paper-making. We're selling pulp at prices which are between 30 and 40 percent cheaper than before the storm," said Kotovics, adding that Sweden was also badly hit by the storm.

The storm brought down 1.6 million cubic meters of timber in Latvia, or 40 percent of the annual logging amount.

"It's around 50 percent more costly to pick up wind-blown timber than to fell it. So where we might have paid 10 euros to fell timber, we now have to pay 15 euros to pick it up," Kotovics explained.

"This obviously increases costs and impacts negatively on productivity."

LVM has set a June 1 deadline to pick up all the wood blown down in the storm, and a report issued at the end of March said 51 percent of the wind-blown trees had been picked up and sold.

Despite the storm, timber and wood represented 28.5 percent of total export value to Latvia in January, when exports soared by nearly 35 percent.

Last year, wood and timber products constituted 30.5 percent of total export value.