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From the timber industry they squeeze cellulose

To be or not to be a pulp and paper mill in the Far East, Yuri Trutnev

At the end of last week, at a meeting on the development of the timber industry complex, Deputy Prime Minister Yury Trutnev tried to find out what hindered the construction of a pulp and paper mill in the Far East. Interest in the project since the beginning of this year, we recall, has already shown three companies, but significant progress on it has not happened yet. The meeting on the pulp and paper mill was made private, so as not to embarrass officials and investors, but some details of the EastRussia discussion were nevertheless managed to be learned.

From the timber industry they squeeze cellulose
The meeting on the problems of development of the Far Eastern timber industry complex, Deputy Prime Minister Yury Trutnev, was closed, having only managed to disclose the fact that the pulp and paper mill construction project in Amursk has "a number of difficulties" before removing the press from the hall. The media did not give any information. And the representatives of the authorities of the Khabarovsk Krai, who came out after the press conference, did not clarify the situation. Khabarovsk governor Vyacheslav Shport confined himself to stating that three investors are competing for the PPM project, and the problem is that not all logging companies master the plots at 100%: somewhere the development is 20-25%, and somewhere - and altogether 1,8%. Such companies 29, and the authorities are working out a mechanism for withdrawing their forest plots from them - "in favor of the plant having enough resources in the foreseeable future," explained Vyacheslav Shport.

At the same time, his first deputy for the Khabarovsk government, Vasily Shikhalev, said that the resources in the Khabarovsk Territory for the pulp and paper mill are "sufficient", but the foreign investor "needs to show resources within the framework of international standards." "Three Chinese companies are considered as potential investors, EastRussia, today the process is in the pre-project state." There is no queue: everyone is studying, decisions are not being made, "the official said. What exactly investors are claiming to enter the project, Mr. Shikhalev did not specify. 

The first interest in the pulp and paper mill in the Khabarovsk Territory was recalled earlier this year by China's China Paper Corporation (part of China Chengtong Holdings). The Chinese group led the relevant negotiations with the largest Far Eastern timber industry company RFP Group from December 2016. RFP Group also has Chinese co-owners: 42,16% of the holding belongs to the Russian-Chinese investment fund, which founded the RFPI and CIC, and 90% of the company's products are exported to China. The key financial partner of the holding for timber processing projects is GK Vnesheconombank. 

Representatives of China Paper announced earlier this year that they are ready to invest up to $ 1 billion (57,6 billion rubles at the current exchange rate of the Central Bank of the Russian Federation) in a pulp and paper mill with a capacity of 500-800 thousand cubic meters of cellulose per year. The Chinese partner can become the majority shareholder of the pulp and paper mill, RFP Group - a minority shareholder, the Russian company specified. Back in February, China Paper received information on the timber base, technologies and the location of the site; in March, they examined the site in Amursk; another visit of the company's representatives to the site of the pulp and paper mill took place in May. In the summer, the parties were supposed to confirm their intention to invest in the project, but so far they have not done so publicly.  

It should be noted that the RFP Group in Amursk already has two lines of the Far Eastern center for deep wood processing: factories for the production of veneer and sawn timber. Coniferous wood processing in cellulose is another possible stage of the project development (for more details, see the material EastRussia "Leaving the log"). True, while the group has focused on the construction of a plant of fuel pellets: the relevant agreement on the intention to invest 1,5 billion rubles. in a line for 90 thousand tons of pellets per year was signed in September.  

First Deputy Prime Minister of the Khabarovsk Krai Government Yuri Chaika reminded EastRussia that the project of the pulp and paper mill, in addition to Chinese China Paper, also interested the Moscow OOO "New Russian pulp", who signed the corresponding memorandum at the third Eastern Economic Forum in Vladivostok. The partner of the project is Chinese China 22MCC Group Corporation. The production capacity of 300 thousand tons of pulp from low-grade softwood is estimated at 41,5 billion rubles, of which 30% is ready to be allocated by the company itself, and 70% - should be obtained through debt financing. LLC filed an application for obtaining the status of a resident of the territory of the advanced development of Komsomolsk to the management company, Far East Development Corporation (KRED). In late September, "New Russian pulp" announced the start of the site of the former Amur cellulose-cardboard plant cadastral work, which should be completed in a month.

Thus, the pulp and paper mill has as many as three potential investors - China Paper, China 22MCC Group Corporation and RFP Group - and huge forest reserves are concentrated in the Far East. What is the problem then?

According to Vasily Shikhalev, Yuri Trutnev instructed federal and regional structures "first of all to determine forest resources for the future plant and create additional mechanisms that would stimulate the investor to invest." So, the problem is divided into two main ones: first, where the plant will get the raw materials from, and second, how to ensure the return on investment. 

The pulp and paper mill in the parameters proposed by RFP Group needs about 2,5-3 million cubic meters of biomass per year, Vasily Shikhalev said. Any procurer has timber that cannot be used in existing processing projects. According to Rosleskhoz statistics, the average share of residues that could be used for pulp production is 30%. For example, RFP Group sends only 40% of larch for peeling for further veneer production at its plant, and 60% cannot be recycled. 50-60% of the harvested spruce is used to make sawlogs. However, the entire volume of raw materials for the pulp and paper mill, one of the meeting participants told EastRussia, only the RFP Group will not be able to provide at the expense of its cutting area, a maximum of 40%. 

At the same time, the permitted volume of felling in the Khabarovsk Territory is about 24 million cubic meters per year. When at the meeting they began to understand why there was no raw material, it turned out that many enterprises were underdeveloped. "The Khabarovsk authorities some time ago proposed to develop a mechanism for the seizure of forest plots, which are being developed by less than 60%. Now there is no such order, but it can be established through amending the regulatory legal acts at the level of the government of the Russian Federation," said the interlocutor of EastRussia. According to him, Yuri Trutnev insisted at the meeting that it is necessary to seize land plots from any enterprises that do not carry out timber processing, although they master the limits by 100%, but such radical measures "are unlikely to be taken."

At the same time, according to EastRussia, the head of the Far East Agency for Attracting Investments and Export Support (API) Leonid Petukhov told Yuri Trutnev that there is a large reserve of unaccounted forest in the Khabarovsk Territory, and the API specialists are looking for it during the last few weeks they have been visiting the forestry. By 2020, he recalled, the PRC decided to reduce commercial deforestation to zero, therefore, Chinese companies are looking for sources of cellulose that could be supplied to the country from outside, but not more than $ 30 per cubic meter. This is what explains the interest in the site in Amursk from China Paper and other Chinese companies. 
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