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Segezha Group signs cooperation agreement with China CAMC Engineering to build Biotechnical Complex in Lesosibirsk, Russia

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Segezha Group signs cooperation agreement with China CAMC Engineering to build Biotechnical Complex in Lesosibirsk, Russia

June 10, 2019 - 06:10
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MOSCOW, June 10, 2019 (Press Release) -On June 7, at the St. Petersburg International Economic Forum the Segezha Group of Forestry Companies (part of Sistema JSFC) and Chinese Corporation САМС Engineering Co Ltd signed a cooperation agreement in the sphere of the investment project to build the Biotechnical Complex (BTC) in Lesosibirsk of Krasnoyarsk Krai with the capacity of up to 1 million tons of bleached sulphated pulp per year. The signing ceremony was attended by President and Chairman of the Board of Segezha Group Mikhail Shamolin, and CAMC President So Lo Yan. Taking part in the ceremony were managing partner of Sistema AFK Ali Uzdenov and Presiden of Sinomach Chinese Engineering Corporation Bai Chaotong.

"Segezha is interested in CAMCE as a partner because of its practical experience and the ability to attract financial and engineering resources. If the companies come together in a project, they will not only share risks but also profits," Mikhail Shamolin, President of Segezha Group, said during the exchange of opinions. "The Chinese business has been pursuing the path of international consolidation quite dynamically, participating in various infrastructural projects. In this sense our alliance is more than attractive and corresponds to the interests of the shareholder, the state and the regions of our presence. Chinese companies have shown themselves to be reliable partners and we are looking forward to productive cooperation."

The total amount of investments into the construction of the modern pulp and paper mill will reach RUB 100 billion. Construction is expected to begin in 2021, the new enterprise will be launched in 2024. As a large forest management, pulp and paper company, Segezha Group has a powerful sawmill company, Lesosibirski LDK No. 1 in Eniseysky District of Krasnoyarsk Krai, an economically feasible calculated felling rate, well equipped infrastructure and the necessary area for construction of a large paper-and-pulp mill. In its turn CAMCE has extensive experience in building large paper and pulp industry projects, and is expected to participate in co-investing into the new Segezha Group project.

"From the point of view of investments and economy this is an exceptionally attractive project. The production costs of Russian pulp will have a large spare margin. The ecologically impeccable Lesosibirsky Biotechnological Complex will be more effective than any other alternative suppliers of pulp in terms of costs and effectiveness," President Mikhail Shamolin of Segezha Group said. In his opinion, with the active support of the state and assistance of Chinese partners, the favorable conditions of implementing the project, including market, logistics, raw materials and HR conditions, will be set in place.

The roadmap of cooperation consists of several stages, from accepting the investment decision to starting the construction. The agreement will enter into effect upon signing and shall be valid through December 31, 2020.

For information: CAMCЕ is a part of the Chinese National Machine Building Corporation (SINOMACH). It has extensive experience in the sphere of implementing international general contracts. CAMCЕ's principal area of activity is in investments at national and international levels and trade operations on timber and paper products. The company has implemented a project of building a PPM in the Republic of Belarus with the total capacity of over 400,000 tons; another project concerns construction of a PPM of similar capacity in the north of Finland.