13 Jul 2023 09:53

Russia's Segezha sets up export-import subsidiary in China for possible future operations

MOSCOW. July 13 (Interfax) - Segezha Group , the forestry division of Russian investment group Sistema PJSFC , has set up a subsidiary in China called Qingdao Linluosi International Trade Co.

The Chinese subsidiary was registered on February 23, 2023, Segezha, which exports most of its lumber and about half of its paper products to China, disclosed in a list of affiliates.

Segezha vice president for commerce Alexander Kharitonov told Interfax that Qingdao Linluosi International Trade is the group's new export-import company in Qingdao, Shandong province.

"It's still early to talk about details. At this stage we're fine-tuning the business processes, adjusting the possible mechanics for practical cooperation, foremost with the Chinese side," Kharitonov said through the company's press service.

He said China has always been the main foreign partner for Segezha. "It accounts for a significant share of sales of kraft paper and lumber, products that are important for the group's development," Kharitonov said.

"Objectively, we're interested in strengthening business cooperation with our Chinese partners, and a local legal entity could become an effective instrument," he said.

Segezha reported that China accounted for 91% of its lumber sales and 49% of paper sales in the first quarter of 2023, up from 84% and 33%, respectively, in the fourth quarter of 2022. Exports to China generated a third or 34 billion rubles of its total revenue of 107 billion rubles in 2022, up from about 13% or 11.5 billion rubles out of 92 billion rubles in 2021.