Kalevala entrusted with OSB mill construction in Karelia

Russian timber companies are showing an increasing taste for the setting up of OSB mills. And if until recently such projects had been announced mainly by major actors, the time appears to have come now for smaller investors. Karelian wood processing company Kalevala has managed to persuade a German bank, Sachsen LB, to provide a loan for construction of one such mill worth Euro 150 mln. As estimated by experts, the mill may prove to be seventh largest in Europe as per output.

Kalevala’s plans to set up an OSB mill became known yet early this year. As RBC Daily was told by director and one of the co-owners of Kalevala, Sergey Vilkov, the company is now launching the construction. According to Mr. Vilkov, the 320,000 cu. m mill will receive Euro 150 mln. in investments. He also noted that the largest part of the financing issue had been resolved, and up to 80% of the required amount would be provided by the German bank Sachsen LB against a guarantee furnished by a German insurance agent, Euler Hermes. Sviaz Bank, another loan provider for Kalevala, will act as an intermediary between the Karelian company and the German bankers. The rest would be contributed by Kalevala’s shareholders, whom, however, Sergey Vilkov refused to name. Sachsen LB did not disclose whose interests were represented by Kalevala either. And, as RBC Daily was told by Sachsen LB spokesman Frank Steinmeier, the final decision on whether the loan would be provided to Kalevala had not yet been made.

At the same time, Sachsen LB does not make a secret of the fact that the Karelian project is viewed by them as opening good opportunities due to, primarily, its orientation to exports, predominantly, to the markets of Central Europe and North America. Mr. Vilkov said exports would account for 70 to 80% of the future mill’s output.

Experts are indicating that as yet, Russia still does not have any mills manufacturing OSB boards. However, Kalevala is unlikely to become the pioneer on this market, executive director of the Northwest Russia Timber Industry Confederation, Denis Sokolov, believes. A similar facility is expected to be put in operation by Austrian Kronospan in Sharia (Kostroma region) before the end of this year. An independent expert Andrey Fialkovsky says the specified output would place the Karelian mill at the seventh position in Europe. Mr. Fialkovsky regards the mill’s prospects as positive due to its export orientation, given the steady growth of demand for OSB on the foreign markets, including those in Europe.

Business Support Bureau "Runa" www.runa.info