Displaying items by tag: Whatwood News

Kronospan holding has launched Russia’s fourth OSB mill in in Egorievsk, Moscow region (after Hillman, Novovyatsky LK and DOK Kalevala) with a capacity of 350,000 m3, this is stated in the updated study by WhatWood agency “OSB market in Russia in 2013 – 1H2014”. Information about the launch of the mill and start of the product sales was confirmed to WhatWood in late September by the resin manufacturers and distributors of wood-based panels.

Meanwhile, the Austrian holding intends to expand production at this mill up to 700,000 m3 and currently solves the issue with the site for the construction of the second line.

Kronospan’s mill in Mogilev also started test production at the end of August, the rated capacity of this plant will be 300,000 m3. Its products will be sold on the markets of Western Europe and Russia. The company has recently published an advertisement about the search of exclusive regional distributors in Russia.

OSB imports into Russia in the first half of 2014, meanwhile, decreased just slightly – by 3.3% to 283,600 m3.

Prices for Romanian and Latvian OSB panels began to decline in the autumn of 2013 and stabilized only in May 2014, which is likely due to increased competition. According to market players, the suppliers “are fighting literally for 5 roubles per sheet”, which is less than 1.5% of the value.

The construction terms and conditions of many projects of OSB mills were revised this year. Projects with a high probability of implementation are listed in the infographics at the end of this article.

The second edition of the study “OSB market in Russia in 2013 – 1H2014” was published in October 2014 and is available for order at the WhatWood website:

• detailed list of investment projects of OSB capacities in Russia, split on the current status of the project;
• base import prices, distributors prices and detailed trade statistics;
• list of global manufacturers and review of the world industry;
• review of Russian economy, OSB market and competing panel sectors;
• outlook on consumption, imports and production.

Kondopoga pulpmill announced the launch of the third papermaking machine which produces newsprint, BM7, in late March. More than 60% of mill’s products are exported. In addition, BM3 is also operating which produces packaging paper.

The company plans to work with three newsprint machines up to about May 20 and prepare another one for operation. If the mill manages to create adequate supply of wood before the spring muddy season, fourth machine could be started earlier.

Meanwhile, general director Vladimir Bibilov applied for early release from his post, he was later appointed chairman of the Board of Directors. Upon recommendation of the regional government, the Board of Directors has decided to appoint Dmitry Turkevich as new CEO for five years. Earlier, Mr. Turkevich headed one of the subsidiaries of ChTPZ metallurgical holding that manages its non-core assets.

Shortly after the appointment, Turkevich was interviewed by Respublika Karelia agency, where he stated that the situation at the enterprise is “complicated but not critical". He added that full capacity is achievable by the end of summer of 2013.

The muddy season will soon force to transport timber by rail, which will immediately increase production costs, Turkevich said. Meanwhile, the high cost of newsprint production remains the major problem of the company.

"For the full-course production working capital is needed, but the company, which is under external management, is certainly not able to get the credit, the Central Bank will not allow this", he said.

Dmitry Turkevich sees the creation of affiliates that can obtain loans, including those for purchase of raw materials, as one way to solve the problem. Recently the company established trading house Kondopoga, whose major tasks will be to procure raw materials and electricity for the mill.

Commenting on the managers’ denial to establish own logging, Mr.

Turkevich noted that the company uses only spruce pulpwood, so other products in this case will be sold, which creates another non-core, separate business.

"We don’t have fundamental problems with demand at the moment, portfolio of orders is established, and its geography is very wide, from Europe to South-East Asia and India. I think that for about seven years, demand for newsprint will be sufficient for stable operations of the mill. During this time, it is necessary to conduct serious modernization in order to convert it to pulp production", Turkevich concluded.

Bumprom (Russian association of pulp & paper companies) has created a new NGO, League of Wastepaper Processors. An article by its president Andrey Guryanov posted at the website (liga-pm.ru) explains the mission and goals of the League.

Presently, State Duma considers amendments to the federal law "On Production and Consumption Wastes". For the forest industry, the main outcome of these amendments will be abolition of licensing for collection and recycling. It is assumed that from 01 July 2014 all businesses of the industry will have to start working within the self-regulatory organization or cease operations.

League of Wastepaper Processors is going to become a self-regulating organization in this field, especially in the sector of wastepaper.

Several large pulp and paper companies have already joined in:

Kommunar mill, GOTEK, Perm Pulpmill Group, Kartontara, Naberezhnye Chelny board mill, SFT Group.

"The Western world has resolved this question. The state defined rules of the market, and the business exists organically and works within these rules. Returning to the question of draft law, we can say that it will create this set of rules for the whole industry of secondary processing in Russia”, Guryanov said.

About 45% of packaging cardboard for corrugated products is made from recycled paper today. Meanwhile, paper collection in Russia is still traditionally low. Potentially, it can be increased threefold, to the level of Western Europe. Most of the waste is collected in retail stores, while households are in fact the major source of wastepaper.

Price of wastepaper of MC-5B grade increased by 30% to 5,235 rubles per ton within one year. In addition, the industry is waiting for the launch of several major paper machines. The total market volume will soon reach 500,000 tons of containerboard, which will require 600,000 tons of wastepaper. Presently, paper collection throughout the country is hardly over 2 million tons.

According to Guryanov, collaboration is needed between the housing cooperatives, collectors of raw materials, waste processors and board makers.

Recently, UPM together with YUVI St. Petersburg (part of SFT Group engaged in collection and recycling of wastepaper) announced the launch of Paper Boom campaign for schools in St. Petersburg: for each ton of wastepaper collected by schools they will receive 2,000 rubles.

Last year, similar campaign raised more than 600 tons of wastepaper.

Prizes for school students included trip to Finnish UPM mill on the winter holidays, trips to YUVI Petersburg production base and souvenirs.

The Board of Eurasian Economic Commission decided to reduce temporarily import duties on certain types of paper and board from 15% to 5% of the customs value.

Since late April, import duties for most grades of coated paper and paperboard used in printing will be reduced until 19 January 2014, for multi-layer paper and paperboard with bleached layers - until 31 December 2015.

In March, Ilim Group launched production of coated paper at its site in Koryazhma which can produce 150 thousand tons of paper per year.

Similar production was planned by Investlesprom holding at its Kama pulpmill, but financial and technological problems forced the company to stop production, and in February 2013 the mill was sold.

Import duties for coated paper in the countries of the Customs Union (Belarus, Russia and Kazakhstan) were increased to 15% in January 2013.

According to the participants of the publishing market who oppose the growth of import duties on paper, domestic producers of these products are still unable to supply the market.

Representatives of the pulp and paper, in contrast, argue that the reduction of duties will complicate the establishment of production and sales.

Management of Solombala pulpmill has decided to suspend production due to difficult financial situation of the mill. Unfavorable situation on sales markets and high degree of capacity wear have already made the company to stop production in late 2012.

Back then, Chairman Alexander Plastinin noted that demand is "below usual" and prices of the company's products on the global market remain weak, but there is a feeling that the bottom is reached and the situation “is not as dramatic as it was at the beginning of 2009, when demand was completely absent".

After a major overhaul of equipment in all manufacturing departments the company resumed production, but was not able to take it to normal production mode. "Given the shortage of working capital and difficulty of access to credit resources further financing of reparation and operations was not possible, so we decided to suspend production," the company says in a statement. According to the signed regulation, CHP plant #1, communications, department of biological treatment of industrial waste water, and fire service will continue to operate.

Currently 504 people are idled, while 712 remain at work.

The decision on the prospects of Solombala pulpmill will be taken later, after the management studies market prospects and financial situation and analyses conditions of the production equipment in detail.

Russian forest industry earned 733.6 billion Rubles (€18.46 billion) in 2012, which is 6.5% higher than in 2011, as said in the annual report published by WhatWood analytic department. Sales profit amounted to 52.88 billion Rubles, which is 16.3% lower year-on-year.

In 2012, Russian economy grew twice as slower as in 2000-2008.
Economic growth slowed down due to declining demand on Russian export goods, which was in turn caused by global economy downturn, cut of company inventories by the end of the year and crop failure after dry season. Russian GDP amounted to 62.36 trillion Rubles (€1.57 trillion) in 2012.

Federal Forestry Agency (Rosleskhoz) gave much attention to forest renewal matters. Volume of reforestation in the last five years stabilized on the level of 810-860 thousand hectares. Share of artifical reforestation amounted to 22%.

On August 22, 2012, Protocol on Russia’s accession to WTO came into power. According to the protocol, new quotas on roundwood export from Russia were imposed. Under 4.13 million cu m, duties for spruce, fir and pine logs now make up 13% of the customs value. For exporting roundwood over this volume duty increases up to 80%, but not less than
€55.2 per cubic meter. Quotas are not imposed for birch and aspen logs, export duties for these grades will stay at 7% and 5% respectively.

Following the results of 2012, Top priority project investment list incudes 121 projects with total volume of investments at 403.7 billion Rubles. These projects are being implemented in 35 Russian regions.

Logging volume in 2012 amounted to 192.1 million cubic meters, which is 2.5% lower on-year.

China remained the largest exporter of Russian logs, but since 2007 export is constantly falling. Last year, export fell by 22.8% down to
11.5 million cu m.

Lumber production in Russia made up 30.8 million cu m, 2.7% lower on 2011. Export of lumber also declined by 2.6% down to 19.1 million cu m.

Pulp output stayed at 2011 levels. Production dynamics through the year, however, was varied: in Q2 there was decline by 2.9% to Q1, in
Q3 – growth by 5.1% to Q2, in Q4 – decline by 4% to Q3.

Paper production declined by 1.5% down to 4.7 million tons, with newsprint production falling by 5.8% to 1.81 million tons. Board production, however, grew by 5.2% to 2.95 million tons.

Detailed statistics on volumes and prices, analysis of WTO accession, comments of market players, major legislation changes and key events of the year are available in the annual study of WhatWood analysts.

Arbitrage court of Karelia regarded Kondopoga mill’s request on bankruptcy on March 06 and approved to introduce bankruptcy administration at the mill, with Andrei Yenkov appointed external mill manager.

Liabilities of the mill exceed 13 billion Rubles (€326.3 million).

Introduction of external management will save company’s facilities and equity in order to convert production lines for new products.

Presently, Kondopoga mill is loaded at 75-80%, most of the workers are laid off.

On February 26, acting Chief Executive of the company Viktor Tolstov met Karelia governor Aleksandr Hudilainen and later had talks with mill managers and engineers on further cost-cutting measures and ways to get rid of non-core costs.

The mill accumulated enough wood to work with two papermaking machines. Presently, PM8 is working. This machine has recently executed large order from Indian wholesalers. Mill managers are planning to launch PM9 in mid-March.

In cooperation with its recent investor, Bank Sankt-Peterburg, the company agreed to establish a trade house and appoint Aleksandr Mozgovoy its director. He earlier managed EnergoSberezhenie LLC, a company that helped Kondopoga mill to enter wholesale energy market.

The trade house will procure raw materials and energy for the mill and sell ready-made goods.

Ilim Group’s new papermaking machine at Koryazhma mill in Arkhangelsk region, built as a part of Big Koryazhma investment project, produced its first paper on March 03.

During the coming weeks, Ilim Group’s specialists, supported by experts from International Paper and representatives of equipment suppliers, will be working together to bring the machine up to full production, and help it meet all of the product quality parameters.

New high-quality office and offset paper will soon enter Russian market.

Big Koryazhma is a $270-million investment project involving construction of a new paper machine, installation of an off-machine coater, cut-size and folio sheeters, construction of precipitated calcium carbonate (PCC) plant as well as implementation of some infrastructure projects. Construction of a new paper machine in Koryazhma started in summer of 2011. As a result of the project, Russia’s most advanced state-of-the-art paper machine has started operations which will produce more than 150,000 tons of office paper per year.

In summer of 2013, the company will also start producing 70,000 tons of coated paper per year to make Ilim Group Russia’s only manufacturer of this product. The project was approved by Ilim Group’s Board of Directors on June 30, 2010. The Ministry of Industry and Trade of the Russian Federation has given this project a top priority status.

source: whatwood

The Bank of Moscow finalized sale of 100% of Kama pulpmill which was owned via Investlesprom holding, as Perm edition of Kommersant newspaper reports. Quoting kartoteka.ru website, the paper states that Kama pulpmill was sold on February 18 to Energoaktiv LLC. This company was established in 2010, 99% of shares belongs to Cyprus SEPERIAN Trading LTD offshore, 1% to its director Irina Barysheva.

Earlier Kommersant paper wrote that new owners of the mill chose not to disclose themselves. According to the data available at Kommersant, the mill was acquired by former managers of Alfa Eko consortium (now A1 holding) which controlled the mill until 2005.

Federal version of Kommersant says that Bank ofMoscow confirms the deal. The mill is now owned by "a group of investors headed by mill manager Sergei Starodubtsev", the bank reports. The value of the contract is not disclosed. Earleir analysts evaluated the enterprise at around 0.9-1.1 billion Rubles (€22.4-27.4 million). New mill owners will concentrate on reaching full capacity and further development of the mill.

Sergei Starodubtsev was Kama mill manager in 2004-2008 and was reappointed in this position in early 2013. Kommersant sources said then this appointment may be linked with the mill sale. Investlesprom will use the proceedings from the sale to settle its debts to the Bank of Moscow.

In December 2012, Krasnokamsk mayor Yuri Chechetkin announced that the mill sale is almost closed, while equipment is being prepared to resume production. The launch was delayed several times. On February 7, production finally resumed, as the mill made first 130 tons of paper at PM1.

Arkhangelsk, February 21. The board of Arkhangelsk pulpmill appointed Mikhail Zylyov as new Chief Executive of the company. Since 2004, Mr. Zylyov has held the position of Director, Economy and Finance.

In his new position Mr. Zylyov will be responsible for further development of the company compliant with its strategy, which is implementation of investment projects aimed at increasing production, strengthening market positions and boosting company’s capitalization.

Mikhail Papylyov who has held the leading post in the company since 2011 left the company on his own will. The shareholders appreciated highly his contribution into this business and wished further success.

Dmitry Zylyov was born in 1970. He graduated from foreign languages faculty at the Pomor State University in Arkhangelsk and local department of Finance Institute under the Russian Government as specialist in banking.