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EBRD loan to help Russia export processed wood rather than raw logs
Finnish group takes first step towards building Russian pulp mill
A long-term loan from the European Bank for Reconstruction and Development is
helping one of the leading players in the international wood market switch its
strategy from only importing raw Russian timber to outsourcing processing
facilities to Russia in a landmark deal for the country’s forestry industry.
The €22.5 million nine-year loan is financing the building of a greenfield
sawmill near the small town of Podporozhye 300 kms northeast of St. Petersburg
by Europe’s second-biggest pulp producer, Finnish Oy Metsä-Botnia Ab. The mill
will, once completed, employ some 120 workers.
A network of sawmills initiated with this €55 million investment is the first
step towards Botnia’s stated long-term goal of building its own pulp mill in
northwest Russia.
The sawmill will have a capacity of 200,000 cubic metres of wood a year and
most of its output will be exported to the Japanese and European markets. It
will handle spruce logs, the bark of which will be stripped off to feed the
mill’s own thermal power plant and thus produce the heat needed to dry the
processed wood.
Most of the wood needed by the mill will be bought from external suppliers.
Botnia’s local subsidiary, LLC Svir Timber, will, in keeping with the group’s
wood procurement procedures, control the origin of timber and only buy raw
material from approved wood suppliers.
Botnia specialises in the production of pulp for the manufacture of top
quality printing and writing papers, packaging boards and tissue. Its
shareholders include three of the world’s leading forest companies, UPM,
M-real and Metsäliitto, which are also based in Finland.
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