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

28 April 2009

On 28 April 2009, Phase 1 trial production started at the OOO MM-Efimovsky wood-processing plant in the village of Chudtsy, Boksitogorsky district, Leningrad region. The grand opening of the plant was attended by Governor of the Leningrad Region, Valery Serdyukov. 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.

Phase 1 of the plant, completed in less than three years since the cornerstone ceremony, includes a sawmill with an area of 24 hectares. 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. 

A plot of land is already reserved for Phase 2 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.

It will be the largest plant in the Northwest of Russia.  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. 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 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.

Josef Dringel, Chairman of the Board of Management of Mayr-Melnhof Holz commented:
“This is not our first sawmill in Eastern Europe but the first one within Russia. Thanks to the professionalism of our partner, LSR Group and the support by the Government of the Leningrad region we have succeeded, despite the current economic crisis, in putting into service a wood processing facility that will supply both the Russian market and other countries’ markets with high quality products manufactured based on the latest technologies, and will  also ensure new jobs for the inhabitants of the Leningrad region.”

The key consumers of the products of the new woodworking plant are construction industry and furniture industry companies.
“The volume of investment in the project was around EUR 80 million. Under our business plan we propose to sell 15% of our products in Russia at the initial production stage. However this number may be bigger as the market demand for our products is growing, - commented Christoph Schmidt, CEO of OOO MM-Efimovsky. – Our research data show that the customers today are not satisfied with what is available in the sawn timber market and badly need a wide range of quality products. Consequently, the market is changing its orientation.”

According to the specialists, the products of the new plant are extremely needed for such a strategically important sector as individual and low-rise construction. Products such as formwork, beams, scaffolding are used in cast-in-situ construction projects.

In addition to the Northwest region, it is planned to supply products to other Russian regions and CIS countries as well as to Japan and Western Europe.

The launching of a new plant is socially important for the Boksitogorsky district. The company currently employs 150 people mostly from the local population of the town of Pikalyovo including recently downsized workers of the Pikalyovo Alumina Plant. Once the plant reaches its full design capacity the number of employees will grow to 250 or 300. The plant will operate round the clock – seven days a week, in three shifts.

The surplus tax revenues of the Leningrad region budget will amount to around 120 million roubles a year, at full production capacity.

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.

OJSC LSR Group is a building materials and real estate company founded in 1993 and operating in a number of complementary market segments. Its core business areas are building materials, construction and real estate development. 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.
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-based financial statements) were RUB 35,858 million, in 2008– RUB 49,813 million.
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:

Press Service, LSR Group
+7 (812) 314-1044


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