Project description
and objectives:
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The proposed project is within the framework of the Multi-Project Facility
Agreement signed with the client in 2002. It is a follow-on investment in an
existing client, OOO Setnovo, located in the village of Nebolchi in the region
of Novgorod about 250 km south of St Petersburg. Nebolchi sawmill started
operations in 2004. The financing will be used for the modernisation and
upgrading of the existing sawmill, which will allow it to manufacture more
value-added products.
At Nebolchi sawmill the investment will allow all the output to be kiln dried
and to add 100 000 m3 per year new on-line planing capacity. The total
production capacity of the sawing line will be almost doubled to 220 000 m3
per year. The number of employees is expected to increase by 57.
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Transition impact:
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The project is one of the few foreign direct investments in the sawmill sector
in the region and is expected to play a positive role in promoting
technological, environmental, forest management and corporate governance
standards for the industry. This effect will be further enhanced by sending a
signal to the market that a leading international player has a strategy to
outsource processing to Russia.
Stora Enso promotes interactions with suppliers by transferring the necessary
skills and technologies to the logging companies operating in the region
through extending its wood procurement standards to the local suppliers,
creating a long-term sustainable demand for their products and upgrading the
regional transport infrastructure. The saw mill project sends a signal to the
market that a leading international player is changing its strategy from only
importing raw logs to outsourcing processing facilities to Russia. Moreover
the expansion of the existing saw mill is part of a longer-term plan to build
up a critical mass of wood procurement needed to support a pulp mill operation
in Russia.
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The client:
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Stora Enso is an integrated paper, packaging and forest products company
producing print and fine papers, packaging boards and wood products - areas in
which the Group is a global market leader. Stora Enso sales totalled EUR 13.2
billion in 2005. The Group has some 45,000 employees in more than 40 countries
in five continents and an annual production capacity of 15.7 million tonnes of
paper and board and 7.4 million cubic metres of sawn wood products, including
2.8 million cubic metres of value-added products. Stora Enso is listed on the
Helsinki, Stockholm and New York stock exchanges.
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EBRD finance:
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The EBRD would provide financing up to EUR 29 million in the form of A/B loans
syndicated to commercial banks.
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Total project cost:
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Total investments EUR 50 million, including EUR 31.5 million capital
investments.
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Environmental impact:
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The Project has been screened MPF. In accordance with the Environmental
Procedures agreed for the existing multi-project facility, Stora Enso has
submitted to the Bank a Final Environmental Report (FER). The FER summarises
the environmental, health and safety (EHS) issues associated with the Project
and measures for their mitigation. Stora Enso’s specialists assisted by
independent consultants will carry out an environmental impact study in
accordance with the Russian permitting requirements in the course of next
months. The Bank’s environmental specialists have reviewed the FER and found
the submitted information satisfactory, providing evidence that the MPF
sub-project has been structured to meet Russian EHS requirements and EU
environmental standards and that it will meet the Bank’s environmental
requirements.
The FER showed that the key additional environmental impact associated with
the expansion project is the air emission of dust from the new 14 MW bark
boiler, which due to selection of European based technology will meet local
and EU environmental standards. The incremental wood raw material will be
sourced from Stora Enso’s current wood procurement operations by redirecting
to the mill some of the wood that is currently exported. The introduction of
wood pelleting line will enable the sawmill to continue utilising 100% of the
wood raw material either as products, woodchips sold to pulp mills or as fuel
in energy production. The transportation to and from the mill by trucks will
increase by up to 50 trucks per day. The Sawmill will investigate ways in
which the potential disturbance to the surrounding population as a result of
noise and dust caused by the trucks could be mitigated.
The Sawmill will continue adhering to Stora Enso's corporate policies and
standards for the environment, occupational health and safety and social
responsibility, including wood procurement procedures ensuring the wood for
its operations will meet internationally recognised standards of sustainable
forest management. This provides that the environmental, health and safety
impacts of the Sawmill will continue to be negligible and efficiently
mitigated. The Sawmill is implementing Stora Enso's corporate EHS policies and
standards, including ISO 14001 environmental management system and aiming at
integration in the Stora Enso's corporate wide EMAS (EU Environmental
Management and Auditing System) certification of sawmills. It is
systematically monitoring and reporting its environmental footprint in line
with Stora Enso's corporate standards for internal and external reporting to
ensure its compliance with Russian and EU environmental standards. Stora
Enso’s environmental reporting to date has shown sound management of
environmental and social issues. The Sawmill is committed to continue working
in a close relationship with the local community.
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Technical
cooperation:
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None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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Juha Kukkola, Vice-President,
Russian
production Group,
Stora Enso Timber
Email: Juha.kukkola@storaenso.com
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EBRD contact:
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Svetlana Sikan, Operation Leader: sikans@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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