Stora Enso MPF - Lukhovitsy

Location:

Russia

Project number:

37273

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

C

Target board date:

12 Dec 2006

Status:

Completed

PSD disclosed:

05 Oct 2006

Project Description

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 packaging plant with an annual capacity of 150 million m2 of corrugated board. The facility will be located in the town of Lukhovitsy, 130 km south-east of Moscow. This new facility will be consolidated legally and financially with Stora Enso’s existing Balabanovo Packaging Plant, which is located in south-west of Moscow. Lukhovistsy plant will be StoraEnso’s third packaging plant in Russia and will employ some 175 people.

Transition Impact

The Lukhovitsy plant will 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 Lukhovitsy packaging plant and sawmills comply 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.

 

The Client

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 €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.

EBRD Finance

The EBRD would provide financing up to EUR 45 million, part of which would be syndicated to commercial banks.

Project Cost

Immediate capital investments in the amount of EUR 53 million with a potential increase of EUR 20 million.

Environmental Impact

In accordance with the Environmental Procedures agreed for the existing multi-project facility, based on the principle of delegated responsibility, Stora-Enso as 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 by Stora Enso 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 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 construction of a new corrugated packaging plant is associated with limited environmental impacts, as corrugated board manufacturing doesn’t typically consume significant amounts of chemicals, water or energy. The Plant will use water based inks and glues and introduce state-of-the-art technology enabling highest standards of energy and resource efficiency. The Plant will implement Stora Enso’s 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. This provides that the environmental, health and safety impacts of the plant will be negligible and efficiently mitigated.

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’s environmental reporting to the Bank on an existing packaging operation in Russia has shown sound management of environmental and social issues. 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.

 

Technical Cooperation

None.

Company Contact

Jorma Vuorenmaa, Vice President, Finance,
Stora Enso Packaging

Email: jorma.vuorenmaa@storaenso.com

 

Business opportunities

For business opportunities or procurement, contact the client company.

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