Karelian Wood Company LLC Becomes Part Of Segezha Group

Karelian Wood Company LLC, a logging and wood processing enterprise, has been officially included in the forest industry Segezha Group (part of Sistema JSFC), said Vladimir Vinogradov, member of the Board and Vice President for Strategy and Business Development, commenting on completion of the transaction to acquire the new asset. The wood processing plant near the city of Kostomuksha in the Republic of Karelia, with the output capacity of up to 250,000 cubic meters of sawn wood a year, has been acquired from Pin Arctic Oy Company (Finland).

“The enterprise has been fully transferred to Segezha Group,” Vice President of the company said. “Implementing this transaction will help increase capacities for production of sawn wood. The forest plots necessary to implement the project for reconstruction of the branch of Segezha PPM, Segezha-West, will also be expanded.”

Vladimir Vinogradov said also that integration of Karelian Wood Company into Segezha Group will provide for a considerable synergetic effect: it will increase the security of raw materials supplies to the Group as a whole, as well as increase the efficiency of wood supplies at Karelian assets of the company by means of optimizing forest resource flows. At present, Karelian Wood Company produces sawn wood for export. The annual permitted volume of logging operations for the company is over 200,000 cubic meters, forest plots of Karelian Wood Company are located in close proximity to the general forest plot of Segezha Group in Karelia; at the moment of the transaction the periodic yield of the company has been established at 2 million m3. By doing this, the company seeks to increase the annual logging volume in the Republic of Karelia by 10%.

“All the staff at Karelian Wood Company LLC – that is, around 240 people, – will be transferred to Segezha Group without exception,” said Vladimir Vinogradov, Vice President for Strategy and Business Development. “Today most of sawn wood products of Karelian Wood Company are exported. Our goal is to increase the volume of production, improve efficiency of KWC operations and the depth of processing the products manufactured by enterprises of Segezha Group. This will help improve added value and profit margin figures for the Group as a whole.”