6 Mar 2018 09:49

Kronospan might invest 330 mln euros in particle board mill in Siberia

NOVOSIBIRSK. March 6 (Interfax) - Kronospan is considering building a wood processing mill in Novosibirsk Region at a cost of 330 million euros, the CEO of the regional investment development agency, Alexander Zyryanov said on Tuesday.

"They are prepared to begin construction in the next three years. The implementation timeframe for the project, with design work, is 1.5-2 years," Zyryanov said at a press conference at the Interfax press center in Novosibirsk.

The mill would have capacity to process 5 million cubic meters of timber annually, and it would manufacture wood panels and end products made from them, such as laminate flooring.

The region's acting economic development minister, Olga Molchanova said at the press conference that Kronospan is also considering other regions for the location of the mill.

"What attracts Kronospan in Novosibirsk Region is that we have a lot of raw material. [...] we have fairly strong demand and very good logistics," Molchanova said.

Zyryanov said the region is offering Kronospan eleven possible locations for the mill.

"Our experts calculated that the cost of infrastructure for them will amount to a little more than 1 billion rubles. There is fairly substantial consumption of gas and electricity there, a railway. For the budget, laying out 1 billion rubles for one enterprise is an unbearable burden. But if they make such a decision, to localize their production in Gorny, then the Fund for Development of Single-industry Cities will pay 950 million rubles, so the regional budget will have to spend just 50 million rubles," Zyryanov said.

Molchanova said the regional government has submitted an application to Russia's Economic Development Ministry to create a priority social and economic development area (PDA) in the Gorny worker settlement.

PDA status would make it possible to establish a special legal regime for doing business and other types of activities. PDAs offer tax breaks, as well as simplified administrative procedures.

Kronospan Holdings East Ltd, founded in Austria in 1897, processes timber and is a major manufacturer of wood panels and laminate flooring. The group includes more than 40 production facilities in 28 countries that employ more than 14,000 people.

In Russia, the group has mills in Bashkortostan and Moscow Region, and plans to set up production in Kaluga Region and build a logistics center in Kaliningrad Region.