Segezha Group to build plywood mill in Omsk region

Investments in the project will amount to about 20 billion rubles.

Omsk Region Governor Alexander Burkov and Segezha Group President Mikhail Shamolin signed an agreement at the St. Petersburg International Economic Forum on readiness to build a modern plywood mill in the region.

Thus, a new high-tech production facility will appear in the region, which will create about 650 new jobs, provide new multimillion-dollar revenues to the budget, and increase the industry's contribution to the regional gross product.

For an investor, measures of state support for business expansion in the Omsk region are of fundamental importance. It is planned to include the project in the list of priority investment projects in the field of forest development, as well as provide Segezha Group with an estimated cutting area of at least 1.7 million cubic meters.

With guaranteed provision of the Group with raw materials, the volume of investments in the construction of the plant will amount to about 20 billion rubles. The capacity is about 200 thousand cubic meters of plywood per year. At least 650 new jobs will be created for local residents. It will be an advanced industrial complex for the most complete wood processing, built on the principle of a closed production cycle, with a minimum level of environmental stress. The best available energy-saving and environmentally friendly technologies will be used in its design and construction. According to the agreement, the facility will be put into commercial operation by the end of 2024. After reaching its design capacity, the company will provide an annual income of about 500-700 million rubles to the consolidated budget of the Omsk region.

It should be noted that the investment project is being supported by the Omsk Region Development and Investment Agency. The Agency's specialists have selected sites for the implementation of the Project and plan to assist in the preparation of documentation for the inclusion of the Project in the list of priority investment projects in the field of forest development, the provision of land, as well as in obtaining initial permits necessary for construction and installation work within the framework of the Project.

"There are 7 similar enterprises in Russia. There are no such plants in the Siberian Federal District. The Omsk region has been chosen as the site for the project, as we have the necessary raw materials for the production of this type of plywood. The investor declares good economic indicators of the project. In addition, the products are focused on import substitution, as well as on export, which corresponds to our guidelines for the development of the economy and industry. On June 24, together with the investor, we will hold negotiations in the Republic of Kazakhstan on the supply of products from the new plant," Alexander Burkov shared.

Currently, Segezha Group holds the position of one of the world leaders in plywood production thanks to its asset in the Kirov region – Vyatka Plywood Mill (VFK). So far, this is the only company in the holding that produces birch plywood. The plant's capacity is 192 thousand cubic meters. m per year. Already this year, another asset, the Galich Plywood Mill in the Kostroma region, will be put into commercial operation. This is Russia's first production of "maxi" plywood (7x13 ft). The capacity of the enterprise in Galich is 125 thousand cubic meters. m per year. Thus, by the end of 2021, the holding's plywood production capacity will increase by 65% and reach 317 thousand cubic meters.

In the near future, Segezha Group will start a project to expand and modernize the production of VFK. Upon its completion, by the end of next year, the Group's total plywood production capacity will grow to 380.5 thousand cubic meters. By the end of 2024, the construction of the plant in the Omsk region will increase the volume of plywood produced by Segezha Group by more than 50%, to about 580.5 thousand cubic meters.

For reference: Segezha Group is one of the largest Russian vertically integrated timber industry holdings with a full cycle of logging and deep processing of wood. The holding includes Russian and European enterprises of the forestry, woodworking and pulp and paper industries. The geography of the Group's representative offices covers 12 countries, including Russia. The products are sold in more than 100 countries around the world. SG enterprises employ 13,000 people. Segezha Group is the largest forest user in the European part of Russia. As of December 31, 2020, the total area of the leased forest fund was 8.1 million hectares of forest plots, 83% (6.72 million hectares) of which are certified according to the international voluntary forest certification schemes. In 2020, the holding's revenue amounted to 69 billion rubles, with an OIBDA margin of 25%. Over 7 years, the total investment has reached about 50 billion rubles. Segezha Group ranks 1st in Russia in the production of paper for multilayer bags, the production of industrial paper bags and lumber; 2nd in the world in the production of paper for multilayer bags and the production of industrial paper bags; and 5th in the world for the production of large-format birch plywood.