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Mayr-Melnhof Holz GmbH and LSR Group Open the Largest Wood-processing Plant in Northwest Russia

28 September 2009

On 25 September 2009, Phase 1 of the OOO MM-Efimovsky wood-processing plant was officially opened in the village of Chudtsy, Boksitogorsky district, Leningrad region. The joint project of the Austrian company, Mayr-Melnhof Holz GmbH and LSR Group was implemented by OOO MM-Efimovsky with the support of the Leningrad Region Government.  The total amount of investment is around  EUR 80 billion.

Participating in the ceremony were governor of the Leningrad region V.P. Serdyukov, deputy Presidential Plenipotentiary  to the North-West District of Russia A.G.Nesterov, commercial counselor of Austrian Embassy in Russia Ditmar Fellner, the main owner of Mayr-Melnhof Holz GmbH Baron Franz Mayr-Melnhof-Zaurau, chairman of the Board of Directors of Mayr-Melnhof Holz Josef Dringel, CEO of LSR Group I.M. Levit, managing director of LSR Group M.B. Romanov.

New wood-processing plant also attracted attention of more than 300 specialists from all over the world: financial field representatives, government authorities, diplomats, businessmen, managers, clients and partners.

Design and construction works were carried out by OOO MM-Efimovsky which was specially formed for implementation of the wood-processing plant project of Mayr-Melnhof Holz GmbH and LSR Group on the territory of Russia.

Phase 1 of the plant with an area of 24 hectares, completed in less than three years since the cornerstone ceremony. A plot of land is already reserved for the second phase of the project, a glued laminated timber plant whose construction is to start in 2010. Consequently, the area of the complex including access ways and a railway siding will total 42 hectares. The annual output after the plant reaches its intended capacity will exceed  650,000 cub.m of incoming round timber, and its yield of final products will be 350,000 cub.m of sawn timber per year.

Specialists of OOO MM-Efimovsky already completed plant trial which started in April 2009. Now the plant is put into operation and has reached its intended capacity. Today it is one of the most state-of-the-art plants in the Leningrad region that will use an efficient router bit technology increasing the timber yield and reducing waste generation. The production technology is based on waste-free processing of raw materials. 100% of bark and, if necessary, chips will be used as fuel for a plant producing heat energy to be used for drying chambers in summer and for heating all production premises in winter.  Chip will be sold to paper mills and saw dust - to flakeboard and wood pellets production plants.

The basic raw material – spruce – by 80% will be supplied for processing from the forestry stock of the Boksitogorsky and Tikhvinsky districts in the Leningrad region, with the other 20% to come from nearby regions. A portion of raw materials is to be supplied by a subsidiary of MM-Efimovsky, Stroyles 2 that has a lease agreement signed with the forestry authorities providing for a license to harvest 450,000 cub.m of timber per annum including 120,000 cub.m of sawlog.

The key consumers of the products of the new woodworking plant – wood boards with a size ranging from 13 to 100mm - are construction industry companies manufacturing  prefabricated frame buildings and furniture industry companies.

The production will be supplied to different regions of Russia, CIS, Japan and Western Europe. This spring the products were for the first time supplied to Germany, Austria, Baltic States, England, Netherlands, Belgium, Denmark, Czech Republic, Poland and Japan.

The launching of a new plant is socially important for the Boksitogorsky district. The company currently employs 200 people. Once the plant reaches its full design capacity the number of employees will grow to 250 or 300. The surplus tax revenues of the Leningrad region budget will amount to around 120 million roubles a year, at full production capacity. The plant will operate round the clock – seven days a week, in three shifts.

By Order of the RF Ministry of Industry and Commerce, the OOO MM-Efimovsky project was included in the list of national priority investment projects in the field of forest exploitation.

Note to Editors:
Mayr-Melnhof Holz GmbH was established in 1850. Today it has three sawmills in Austria, and a sawmill each in the Czech Republic, Switzerland and Russia. It also includes four European wood processing companies (three in Austria and one in Germany).
The distinctive feature of Mayr-Melnhof Holz GmbH is that it does not engage in wood processing only but has extensive experience in forest recovery. Over many years of operation the company has developed efficient technologies in the area concerned and is planning to apply them in Russia too.
www.mm-holz.com

OJSC LSR Group  is a real estate and building materials company founded in 1993 and operating in a number of complementary market segments. Its core business areas are building materials, construction and real estate. The Group includes enterprises for extraction and processing of aggregates, production and transportation of building materials, and housing construction — from mass market large-panel housing to elite property built after designs made by leading domestic and foreign architects.
LSR Group has operations and offices in a number of cities in the Leningrad region, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia, Ukraine and Germany.
In 2007, the sales revenues of LSR Group (according to the IFRS) were RUR 35,858m, in 2008 – RUR 49,813m.
LSR Group is a public company, with its GDRs listed and traded on the London Stock Exchange and its shares listed and traded on MICEX and RTS.
In 2007, LSR Group was awarded ‘The Company of the Year’ National Award in the ‘Construction’ category.

For more details please contact:
LSR Group Press Service

Tel.: +7 812 314 10 44
E-mail: press@lsrgroup.ru
www.lsrgroup.ru

«LSR Group» discloses information on the page on the Internet of LLC Interfax-TsRKI — the news agency accredited by the Central Bank of the Russian Federation to disclosure of information.
Information is available here.



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