Displaying items by tag: Whatwood News

Karelia governor Aleksandr Hudilainen announced that Bank Sankt-Peterburg was chosen as investor for troubled Kondopoga pulpmill.

"We will be crediting the pulpmill, but we are not going to enter this business", bank's press service told WhatWood.

"Quite a good way out of the deadlock is appearing. An investor came who is willing to undertake mill's liabilities to other banks. Within two weeks, the whole financial model will be developed. Next time we'll meet with the representatives of the largest banks that credited Kondopoga pulpmill to discuss the matter of debt transition to Bank Sankt-Peterburg", Hudilainen said.

The mill closure is out of question, governor added. Instead, the bank suggests full upgrade of the mill and gradual conversion to other forest products, probably pulp, within three or four years, as newsprint demand is gradually falling.

Today, only one papermaking machine out of seven operates at the enterprise. In early February, the management is going to launch two more machines.

The bank was presented among five possible investors at the board meeting on January 24. Karelian government suggested attracting business structures belonging to Albert Laritskiy, while the Board supported the option to merge with Volga newsprint mill, another giant of the industry. This option was also supported by the leaders of Karelian trade unions. Volga’s head of PR department Andrey Solovyov in an interview to WhatWood said then that the company "is not yet commenting" on the possible merger.

In December 2012, the mill’s management signed a regulation to lay off

2,400 workers (40% of total headcount) on indefinite leave. They are paid two thirds of regular wages.

WhatWood made a detailed report on the mill’s position last October.

Back then, Gubernia Daily newspaper published two photos of a letter allegedly shared among mill workers and signed by Chief Executive Vladimir Bibilov. The letter told the mill is facing hard times.

Kondopoga mill produces newsprint and paperboard. Company’s share on the newsprint market in Russia is estimated at 39%. The mill’s sales declined 4.25% down to 10.07 billion Rubles (€249.7 million) in Q3 2012. Kondopoga managed, however, to curtail net loss threefold to

361.4 million Rubles (€9 million).

Selenga pulp and board mill (located in Buryatia Republic, belongs to Continental Management holding) expects a 16% growth in containerboard sales in 2013. In value terms, growth would amount to 29%. This will be possible due to growing market capacity, replacement of closed mills and price growth, as the company said in a press release received by WhatWood.

According to predictions of Ministry for Industry and Trade, from 2013 to 2017 Russian containerboard market will grow by 4% annually.

Therefore, in 2013 its capacity will increase by 35,000 tons to 1.198 million tons. Demand growth will be driven by increase in consumption of food and non-grocery goods in Russia this year by 3% and 7.6% respectively.

Last year, Russian market experienced lack of containerboard due to ceased deliveries from Bratsk LPK mill and long technical shutdowns of several leading mills. In 2013, the market will also feel lack of board. Ceased deliveries from Bratsk LPK as well upgrades at Mariyskiy and Arkhangelsk pulpmills will lead to decline in containerboard and corrugated paper production by 1.6%. As Marketing Director of Continental Management holding company Nadezhda Ryazantseva said, growth of board output announced by major players will not cover growing demand in full.

All these factors will allow the company to increase its market share from 5% to 6.5%.

Undersupply of board on the market will lead to further growth in prices. Last year, prices grew by 17%, this year the growth will reach 11% at least, as Nadezhda Ryazantseva predicts. First price hikes (3%) are expected on February 01.

Recently WhatWood reported that several market players in North America announced price hikes for February deliveries.

‘’The situation will change in 2014, when we expect a 190,000-200,000 tons growth in Russian production of containerboard. This will offset demand rise. However, in 2014 the market will face another problem, which is undersupply of wastepaper. This will retain production growth and result in wastepaper price hikes. All these factors as well as coming of another large market player, SFT Group, will lead to falling market shares of small companies. Therefore, producers of non-recycled board, including Selenga mill, will have a chance to boost sales’’, Ms. Ryazantseva said.

Last year, the company invested over 240 million Rubles into upgrades

(€5.9 million). Coal boilers #5 and #7 were replaced which decreased environmental pressure and boosted energy generation. Boardmaking machine #1 was upgraded as well in order to improve board quality.

4th International Adam Smith Conference Russian Wood & Timber 2013 will be held on March 19-21, 2013, in Baltschug Kempinski Hotel in Moscow.

The list of speakers from global and Russian leading companies of the industry who confirmed their attendance at the event includes:

Kenneth Munson, Forest Director, EMEA, International Paper
Igor Sapunkov, Director, Forest Strategy, Ilim Group
Andrey Schick, General Director, MM-Holz Efimovskij
Ivan Savinsky, Country Manager – Russia, UPM Timber
Semen Goglev, Commercial Director, Laminates and House-Building, Investlesprom
Ardasher Kurbansho, General Director, Kronospan
Vladimir Kotenev, General Director, Pfleiderer
Klaus Peller, General Director, Mondi Syktyvkar

This year the programme of the forum underwent considerable changes. The first day will be a Wood & Timber Market Intelligence Focus-Day that will be dedicated to domestic and global outlook for wood products. On March 20, the conference itself will start in entirely interactive format with debates on forestry management in regions, important trends, WTO and driving up profits, while the third day will be entirely dedicated to case studies, including greenfield, brownfield and innovative forestry projects.

Other features and hot topics of the forum in 2013:

-Global and domestic timber sales – what sells, where and what will sell in the future;
-Forestry policy in Russia: latest developments and key issues for forest companies;
-Question time with regional governments: your opportunity for interactive discussion with government decision-makers;
-Head-to-head debate: WTO – friend or foe? How to live in the WTO?
-Analysis of end-user sectors: construction industry, wooden housing and furniture production
-Interactive task-force: How to drive up profits in the Russian forestry sector today?
-Interactive live polling: see the most realistic map of risks and business opportunities in the Russian forestry sector.

Austria’s capital hosted 17th Adam Smith Conference “Pulp & Paper in Russia and CIS”. Following the results of it, a workgroup will prepare a Resolution of the conference and send it to Russian officials. The document will contain detailed actions that should be included in the draft Forest Policy, according to the business community, as well as protective tariff measures that should foster competitiveness of Russian companies in the course of country’s accession to WTO.

Forest Policy draft elaborated by Federal Forest Service hardly gives any attention to business interests, as it does not contain state measures to ameliorate business environment and establish up-to-date further processing capacities in Russia, Arkhangelsk pulpmill GR director Natalya Pinyagina said at the conference.

Pinyagina noticed that the forest industry which is a single system does not have centralized management, as it is diffused among various services. The draft policy does not set clear rules.

Natalya Pinyagina illustrated her words with the state of forest roads construction. In Russia, 1,000 ha of forest are served with 1.2 km of roads, which is 40 times less than in Europe. Despite numerous government regulations, the matter of road classification is not resolved. Pinyagina mentioned that two years ago the government allocated funds for forest roads construction for the first time in 15 years, but even this was complicated with numerous conditions, mainly co-financing from the regional budget.

Instruments of state control are needed along with state financing of forest roads and interest rate concessions for crediting upgrades and new facility projects, Pinyagina added.

Following the results of the conference, a workgroup will prepare a Resolution that will be sent to Russian officials, namely Ministry for Natural Resources, Federal Forest Service, Ministry for Industry and Trade and some others.

Metorg GmbH company (exclusive representative of German equipment producer Bielomatik on the Russian market) has concluded a contract with Arkhangelsk pulpmill on delivery of automatic line BIELOMATIK P15-90 to produce copybooks, as mill's press service reported.

According to schedule, installation of new equipment will be finalized in April 2013. The contract also entails personnel training by Metorg specialists once the line is installed in the stationery department.

Upgrade of equipment will enable the company to increase paper processing. The new machine will also enable producing not only standard copybooks (12, 18, 24 и 48 sheets), but also that of 96-sheet format. New equipment would be able to print and collect sheets to make other stationery grades like albums, notebooks, and multi-section copybooks. This will meet growing demand, as said in the message of press service.

Volga and Turinskiy pulpmills increased sales, but lowered net profit in January-September 2012

Large Russian forest industry companies continue to publish quarterly reports. Turinskiy pulpmill (Sverdlovsk region) reported growth of sales by 2.7% year-on-year to 863.6 million Rubles (€21.6 million).

Net profit, however, declined by 41.2% down to 20.65 million Rubles (€0.51 million).

Sales of Volga newsprint mill (Nizhniy Novgorod region) amounted to 7.88 billion Rubles (€197 million), which is 10.8% higher year-on-year. Mill’s net profit, however, also fell (2.6 times down to 21.19 million Rubles – €0.53 million).

Log export from Russia declined by 21% to 12.5 million cu m in 9 months of 2012 – WhatWood Analytics

Moscow, November 29. Physical volume of roundwood export from Russia declined by 21% in January-September 2012 year-on-year down to 12.5 million cu m, as said in the report published by WhatWood analytic service. Export cost declined by 27.3% on-year down to $1.1 billion.

Negative growth of log export from Russia was due to falling deliveries to three key markets, namely China (-26%), Finland (-9.6%) and Japan (-28.4%). Share of these three countries in total export amounts to 90%.

"Falling demand was also affected by decrease in harvesting volume (-2.3% in January-September 2012 year-on-year) and new export delivery terms after Russia’s WTO accession. Many Russian exporters came across difficulties in getting their licenses", as said in WhatWood Analytics report.

To read full 40-page version of WhatWood’s analytic report please contact our analysts at This email address is being protected from spambots. You need JavaScript enabled to view it..

Last week, several pulp and paper mills in Russia published quarterly financial reports announcing falling sales in January-September 2012 year-on-year.

Kondopoga mill (Karelia) sales declined 4.25% down to 10.07 billion Rubles (€249.7 million). This large newsprint mill managed, however, to curtail net loss threefold to 361.4 million Rubles (€9 million).

Sales of another newsprint mill, Solikamskbumprom (Perm region), decreased by 1% down to 6.53 billion Rubles (€161.9 million). Net loss of the mill boosted five times year-on-year to reach 79.1 million Rubles (€2 million).

Selenga pulp and board mill declined its sales by 7.5% down to 1.6 billion Rubles (€39.7 million); net profit also decreased 3.23 times down to 44.32 million Rubles (€1.1 million).

Kondopoga mill produces newsprint and paperboard. Company’s share on the newsprint market in Russia is estimated at 39%. Solikamskbumprom is located in Perm region and produces newsprint. Selenga pulp and board mill deals in production of market pulp and a variety of cardboard and grocery bag paper brands.