Segezha Group upscaled sawn timber sales to China

January 13, 2017

As of the yearend 2016, the global reach of Segezha Group sawn timber sales (part of Sistema JFSC) has grown from 11 to 14 countries. Export sales have reached 33%, driven by overall ramp up and economic backdrop.

In 2016, due to reduced export to low margin markets, the forest holding shifted the sawn timber supplies towards South-East of the globe, including China. For example, core operations of Segezha Group in Krasnoyarsk – Lesosibirsk Sawmill №1, has increased sawn timber sales up to 31% from the total export volume. While in 2015 Lesosibisrsk Sawmill №1 dispatched circa 85 000 cubic meters of sawn timber to Chinese customers, in 2016 the figure stood at 140 000 cubic meters.

Chinese market is currently one of the most receptive ones among the global sawn timber markets, mostly trading spruce sawn timber, it is therefore appealing for Segezha Group’s core operations: Lesosibirsk Sawmill №1, Onega and Segezha Sawmills. At present, 10—12 % of yearly sawn timber output is exported from Onega (Arkhangelsk Region) to China, 10-15% of produce is dispatched from Segezha (Republic of Karelia).

The bulk of our products in this segment are highly demanded abroad” – Sergey Pomelov, Segezha Group’s CEO commented, - foreign buyers are comfortable with quality and best value of our sawn timber”.

Apart from China, Segezha Group increased supplies to European markets, including France, Belgium, the Netherlands, UK, Estonia and Germany. Annual export total of sawn timber across the Group stands at 904 000 cubic meters. The Group’s overall sawing index exceeded 2 200 000 cubic meters of sawn timber. The holding’s share of internal wood supply in raw wood total amounts to 63%.

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Segezha Group is one of the largest Russian forest industry holdings with the vertically integrated structure and a full cycle of logging and added-value wood processing. The holding comprises Russian and European enterprises in the forest, wood processing and pulp and paper industries, as well as paper packaging. The geography of the Groups’s branches encompasses 12 countries. The production facilities are located in 8 countries, including 6 regions of the Russian Federation.  The company’s products are exported to 87 countries across the world. The staff headcount of Segezha Group totals 13.000 people.

Segezha Group is the largest forest user in the European part of Russia with the total area of forest lease of over 7 million hectares (MHA). 95 % of products is certified. In 2016, the complex afforestation area will exceed 21,000 hectares.  Segezha Group ranks: № 1 in Russia (52%) and № 2 in Europe (16,5%) for paper sack production, № 1 in Russia (71%) and № 4 in Europe in terms of high-quality unbleached sack paper production , № 5 in Russia and the world’s № 7  for large-sized birch plywood production, № 1 in Russia for sawn timber production – 904 thousand cubic meters per year, and № 1 in Russia for glulam house sets – the volume stands at 25,5 thousand cubic meters per year. The output of glulam wooden structures amounts to 58 thousand cubic meters per year.

The ongoing investment program is estimated at over RUB 40 billion.