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Dmitry Zyliov: "Arkhangelsk Pulp and Paper Mill is the best example of Austrian business investment in pulp and paper development in Russia".

26 oct 2021

On October 22, the 13th meeting of the Russian-Austrian Business Council was held in Vienna under the chairmanship of Mr. Richard Schenz, Vice-President of the Austrian Federal Economic Chamber, Dmitry Lubinsky, Ambassador Extraordinary and Plenipotentiary of Russia to Austria, and Mr. Helmut List, Chairman of the Austrian-Russian Business Council.

Four Russian regions presented their investment potential in Austria.

Dmitry Zyliov, CEO of Arkhangelsk Pulp and Paper Mill, presented the Arkhangelsk region.

"Currently, our company is the best case of Austrian business investment in the development of pulp and paper production in Russia - assured the top manager of APPM. - Our shareholder - Pulp Mill Holding - has been progressively investing in the development of Russian production for over 15 years.

Dmitry Zyliov told about the modern assets structure of the Austrian holding, which currently includes the anchor enterprise on the territory of Russia - Arkhangelsk PPM and four large enterprises specializing in key business directions: production of corrugated products - Arkhbum JSC , which includes 4 processing centers in Istra, Podolsk, Voronezh and Ulyanovsk, ARKHBUM-UPAK LLC (Moscow region) specializing in the production of ecological consumer packaging, Arkhbum Tissue Group LLC (Kaluga region) - one of the largest Russian manufacturers of sanitary and tissue products under its own brand Soffione, and the logistics company Arkhbum LLC. He also noticed that within the vertically integrated structure the GC Titan has been the timber supplier to the flagship of the holding - Arkhangelsk Pulp and Paper Mill - for many years.

At present the number of employees of Russian assets of Pulp Mill Holding is about 11 thousand people, the sales revenue amounts to 80 billion rubles, payments to the budget of the Russian Federation is 6,5 billion rubles by the end of 2020.

CEO of the Arkhangelsk Pulp and Paper Mill spoke directly on the results of the mill. Now the pulp production capacity is 291 thousand tons of marketable pulp, 610 thousand tons of marketable board, 82 thousand tons of paper. The volume of timber consumption by the APPM is 3.8 mln. m³. Forest areas leased by Pulp Mill Holding and GC Titan in Russia have 5,7 mln. m³ of controlled felling areas.

"Largely thanks to loans from Austrian financial institutions we have successfully implemented a priority project in forest development "Reconstruction of the Board Production Shop of APPM", which amounted to more than 80 million euros, including 21 million euros of investments in equipment of the SCP workshop produced by Austrian company ANDRITZ, " - said Dmitry Zyliov.

Loans from the Austrian side for the implementation of investment projects of Arkhbum Tissue Group LLC and the Ulyanovsk branch of Arkhbum JSC amounted to more than 20 million euros.

"Our cross-functional cooperation includes a wide range, incl. the supply of pulp, board to Austrian buyers, the purchase of materials and components from Austrian manufacturers", - said the top manager of APPM.  

Dmitry Zyliov said that Pulp Mill Holding is going to invest more than 160 billion rubles in the rebuild of their Russian production. The main focus will be a project to build on the site of APPM a new sulfate board plant with the third board machine (BM-3) with the capacity of 700 thousand tons per year, which meets all the world's requirements. The volume of investments will amount to 120 billion rubles (1.4 billion euro), IRR - 7.7%, payback period - 12 years. The project starts in 2022, the construction period is 4.5 years, and the planned date of start-up is the end of 2026.

"Completion of this project will allow us to increase EBITDA, ensure growth of the company's capitalization, and will certainly improve the environmental situation in the north of the Arkhangelsk region through further implementation of the best available technologies," said Dmitry Zyliov. - We are going to increase annual pulp cooking up to 1 700 thousand tons, container board up to 1 300 thousand tons, and the growth of APPM's facilities mean the increase of wood logging, i.e. creation of new jobs, new timber enterprises, taxes, development of the region's infrastructure, etc.".

CEO of APPM spoke about the necessary measures of state support for this project, including allocation of additional forest fund, state participation in the development of external infrastructure and financial forms of support in the framework of programs of development institutions and authorities.

At the end of his speech, Dmitry Zyliov appealed to the Austrian business community to invest more actively in Russia and in the Arkhangelsk region.

"Pulp Mill Holding's constant progressive strategy is to invest in existing and new production facilities in Russia. In addition, our goal is to increase business value for the benefit of our employees, customers and regions where we operate, - says Vladimir Krupchak, Investment Director of the Austrian holding. - Almost every three years Pulp Mill Holding opens new productions and plants: now the geography of our business extends from the North-West Federal District to the Volga Federal District. Moreover, if we talk about our B&C line - sanitary and tissue products (STP) with its own strong consumer brand Soffione – it is presented not only in Russia and the neighboring countries, but also in European countries.