The proposed project comes within the framework of the Multi-Project facility agreement signed with the client in 2002, and is part of the expansion of Stora Enso’s packaging operations in Russia. The project envisages construction of a greenfield offset printed micro-flute packaging plant with an annual capacity of 30 million m2 of offset printed corrugated board. The facility will be located in the town of Balabanovo in the region of Kaluga, 80 km south-west of Moscow. This new facility will be consolidated legally and financially with Stora Enso’s existing Balabanovo Packaging Plant as well as with the Lukhovitsy Packaging Plant which will be located in south-east of Moscow and is currently under construction. Balabanovo offset corrugated packaging plant will be the first Stora Enso’s investment in modern offset corrugated packaging production in Russia and will employ some 120 people.
The Balabanovo plant will improve the quality and sophistication of packaging products in Russia and increase competitive pressure by offering better product features to the consumers of corrugated packaging materials. The project will contribute to the transition among local suppliers to higher quality production and will increase the pressure on the local large paper pulp and paper suppliers to improve paper quality and efficiency of customer services.
Given Stora Enso’s strengths, commitment and experience as well as the high profile role of the new plant, the project is expected to make significant contribution to setting technological, managerial and general business standards. Stora Enso will also ensure that the Balabanovo packaging plant complies not only with the national and local environment, health and safety regulations but also with the applicable European Union environment, health and safety requirements, thus serving as good examples for environmental management in the local forestry and packaging sectors.
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 €14.6 billion in 2006. The Group has some 44,000 employees in more than 40 countries in five continents and an annual production capacity of 16.5 million tonnes of paper and board and 7.4 million cubic metres of sawn wood products, including 3.2 million cubic metres of value-added products. Stora Enso is listed on the Helsinki, Stockholm and New York stock exchanges.
The EBRD would provide financing up to EUR 23.1 million, part of which would be syndicated to commercial banks.
EUR 23.1 million.
Screened MPF. In accordance with the Environmental Procedures agreed for the existing multi-project facility, based on the principle of delegated responsibility, Stora-Enso has undertaken environmental due diligence that mirror the EBRD’s own environmental appraisal and monitoring process. Stora Enso has undertaken a study of the project’s impacts on the environment and a public consultation procedure in accordance with Russian permitting requirements. Stora Enso has submitted to the Bank the Final Environmental Report (“FER”) summarising the environmental studies and environmental due diligence undertaken as well as the environmental, health and safety (EHS) issues associated with the Project and measures for their mitigation. The Bank’s environmental specialists have reviewed the information and found it 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 construction and operation of a new offset printing and packaging manufacturing plant is associated with a limited number of environmental issues. The plant will not consume significant amounts of chemicals, water or energy. Potential impacts may arise from the construction works, the use and disposal of inks, glues, solvents, oils, coolants and lubricants, as well as occupational health and safety. In a new plant like this the adverse impacts can be readily identified and assessed as well as efficiently mitigated through the introduction of the use of water based inks and glues as well as the application of modern technology, project design, construction planning and work practices.
The Plant will implement Stora Enso’s corporate standards, policies and procedures for environmental performance, occupational health and safety, monitoring, reporting and corporate social responsibility. It will also require suppliers and sub-contractors to adhere to the principles of Stora Enso’s environmental policy and will monitor the environmental impacts caused by sub-contractors. The plant will be systematically monitoring and reporting its environmental footprint in line with Stora Enso's corporate reporting standards to maintain its compliance with Russian and EU environmental standards. Stora Enso is committed to work in a close co-operation with the local government and authorities and maintaining open dialogue and interaction with the local population.
Jorma Vuorenmaa, Vice President, Finance, Stora Enso Packaging
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