Finns in Vologda Region

Cooperation between Finnish UPM Group and Russian Sveza Group develops according to the approved plan. A joint venture agreement has been signed. The goal of the project is a new modern timber plant in the Vologda region.

The parties will share fifty-fifty the stock of the new plant Borea Ltd. Mr. Andrey Kashubskiy, general director of Sveza Group, is to become the first Chairman of the Board of Directors of the new company. The parties will take turns occupying the chairman’s position through their representatives. The activation of the company depends on the permits to be obtained from relevant antimonopoly agencies, including EU Commission.

The new industrial complex will comprise of a modern PPM, a sawmill, and an OSB plant. It will be located in Sheksna district, in the south of the Vologda region. The expected capacity of the plant will be 800,000 metric tons of pulp, 300,000 cu m of lumber and 450,000 cu m of OSB.

The joint venture will continue the feasibility study and the authorization process. The major pre-condition of investment decisions is the availability of forest use rights provided under feasible economic conditions. Apart from this, the decision may be positive only with the consent of RF development institutions to invest money into the regional infrastructure.

According to the preliminary estimates, the plant will be commissioned in 2012. The total sum of investments into the industrial complex will exceed €1bn. When the enterprise reaches the rated capacity, it will employ about 650 persons, and create thousands of indirect jobs for the region.

Inhouse information.