On June 7 on the sidelines of the St. Petersburg International Economic Forum the head of Republic of Karelia Artur Parfenchikov and President and Chairman of the Board of Segezha Group (part of Sistema JSFC) Mikhail Shamolin signed a roadmap as part of the Cooperation Agreement between the Government of the Republic of Karelia and the Managing Company Segezha Group Ltd to implement the planned investment project Segezha West – modernization of JSC Segezhsky PPM with expanded capacities for sack paper production." The document brought together the earlier achieved agreements between the Government of the Republic and the Company on joint work to develop the pulp-and-paper mill, timber processing production facilities and intensive forest management methods. Segezha West, the program for further modernization of Segezha PPM presupposes creation of conditions to increase the capacities of the enterprise to 850,000 tons of product a year, and expansion of the product portfolio. The planned amount of investments has been assessed at some RUB 55 billion. As a result of a series of renovations of industrial equipment and construction of new facilities at SPPM, the enterprise will produce not only non-bleached paper but also craft paper and bleached hardwood and softwood pulp.
The prizes of the 2nd Russian Professional Prize “Change Management. Visionaries” presented by +1 projects were awarded in Moscow on April 11. Representatives of business corporations and industry communities received awards for projects in the sphere of sustainable development and corporate social responsibility. Segezha Group has been awarded victory in the nomination for “Ecology. Business” for the project “Introducing bioenergy technologies in Forest Industry. The company’s application centered around two current “green” projects: the launch of the multi-fuel boiler that uses bark and wood as fuel at Segezhsky PPM in Karelia, and the pellet plant on the industrial site of Lesosibirsky LDK No. 1 in Krasnoyarsk Krai.
Within their respective authority, the parties agreed to implement an investment project for construction of a biotechnological complex (BTC) on the territory of Yeniseisky District to produce bleached sulphate pulp, as well as to ensure security of wood raw materials supply in accordance with applicable current law of the Russian Federation. The forest industry group of companies and the region will work together to create favorable conditions for comprehensive socio-economic development of the Krai and to improve the quality of life of the local population
The parties agreed to work together for mutual benefit in the sphere of organizing cargo transportation and development of optimal logistical solutions in the process of modernization of the Segezha pulp and paper mill in Karelia, construction of a new plywood mill in the town of Galich, Kostroma region, a new biotechnological complex in Krasnoyarsk Krai and other Segezha Group projects.
Segezha Group announced its unaudited consolidated financial results prepared in accordance with International Financial Reporting Standards (IFRS) for the full year 2018. Segezha Group is a portfolio company of Sistema (LSE: SSA, MOEX: AFKS).
2018 Financial Highlights:
Revenue grew by 24.5% year-on-year to RUB 54.4 billion.
OIBDA rose by 79.0% year-on-year to RUB 12.9 billion. The OIBDA margin was 23.8%.
There are numerous requirements for candidates to receive the SBP certificate, including requirements for sustainable forest management, legal origin of wood products and lawful commercial practices, as well as reporting requirements for the entire energy and carbon supply chain.
External certification audits of the management company and enterprises of the Paper and Package Division were held in the end of 2018 by TMS RUS LLC – a representative of TÜV SÜD Management Service GmbH, a global leader in field of management system certification.
According to the rating, Segezha Group, a forest industry enterprise and part of Sistema JSFC, takes the 42nd position in the corporate transparency rating of major Russian companies. The RRN assessed the level of corporate transparency in the total of 1,141 companies. The report states, the Segezha Group reached the 2nd level of transparency in 2018 (scoring 34 out of 100 points), i.e. its level of transparency corresponds to international reporting standards.
Participation in the UN Global Compact confirms the company’s adherence to principles of human rights, labor relations, protection of the environment and anti-corruption activities. This UN initiative in the area of corporate social responsibility and sustainable development on the global scale has brought together businesses that follow responsible business practices and adhere to principles of integrity and fair competitive practices.
During the St. Petersburg International Economic Forum in 2018, Segezha Group (affiliated to Sistema JSFC) and the Government of Sakhalin region signed an Agreement on Cooperation. The main objectives of the cooperation are the wooden house building development in the Far Eastern region and the increase in high redistribution products’ export from the Sakhalin region. The parties agreed to implement on Sakhalin a joint investment project ‘Construction of a plant for the production of glued wooden structures used in the construction of quickly erectable housing.’ The investment project involves the construction of a woodworking plant with a capacity of at least 35-40 thousand cubic meters of glued wooden structures per year.
For the first time Segezha Pulp and Paper Mill (affiliated to Segezha Group, Sistema JSFC) produced SKE i4 Premium Ultra-High-Strength Paper as a Pilot Project. Pilot production of paper weighing 90 grams allowed achieving the necessary strength characteristics under the specification within 3 days. The first export consignment will be shipped to Vietnam. Ultra-High-Strength Paper is produced on a new advanced paper machine by the global concern Voith which was solemnly launched in the fall of 2017. This type of paper is a unique in that having the same weight of a square meter as a regular SKE grade without the i4 prefix, its mechanical strength is higher by more than 15%.
Segezha Group (affiliated to Sistema JSFC) – one of the largest Russian vertically integrated timber holding companies – reports that today the Board of Directors of Management Company Segezha Group Limited Liability Company has decided to appoint Shamolin Mikhail Valerievich to position of President, Chairman of the Board of Management Company Segezha Group LLC. Mikhail Shamolin will leave the post of President of Sistema PJSFC, which he held since March 2011, and will enter a new office in Segezha Group on March 13, 2018.
The results of the first Environmental Responsibility Rating of pulp and paper companies of the Russian forest sector were summed up at the round table “On Measures to Ensure Environmental Safety in Russia”, organized by the Committee of the Chamber of Commerce and Industry of the Russian Federation for Ecology and Use of Natural Resources on February 15. Segezha Group ranked second in the rating, second only to JSC Tetra Pak.
The rating purpose is to create prerequisites for reducing load on the environment and increasing efficiency of forest resource use, environmental and social responsibility, as well as transparency of the Russian pulp and paper companies.
Sokol Timber Company – the flagship of the wooden house construction of Segezha Group (affiliated to Sistema JSFC) in Vologda Region has received the Certificate of the European Environmental Product Declaration. The certificate contains a comprehensive report of independent expertise and recognizes the environmental characteristics of products manufactured by Sokol Timber Company. The constructions using the glued laminated timber, the glued wooden construction and other elements as a base demonstrate many advantages. The material of deep wood processing does not harm either the environment or the person throughout the whole life cycle: from the extraction of forest raw materials to the production of the final certified product, its operation and disposal.The document, registered by the Norwegian Program Operator (The Norwegian EPD Foundation) in accordance with ISO 14025, ISO 21930 and EN 15804, was issued to the enterprise for 5 years – until February 2, 2023.
Segezha Group was awarded the title of “2017 Best Supplier of the Russian Lumber” as the best supplier of coniferous sawn timber from Russia at the annual meeting with stakeholders, held on January 29 in Beijing.
Xiamen BNBM Group annually evaluates its suppliers on a number of criteria, including the proportion of the supply volume in the portfolio, quality of products and execution of contracts, post-sale services, and potential for strategic cooperation.The total volume of sawn lumber imported in 2017, produced by woodworking enterprises of Segezha Group amounted to more than 150,000 cubic meters.
Segezha Group purchased 8 units of new “forest” motor vehicles for Lesosibirsky LDK No. 1
In the framework of implementation of the investment program for the renewal of “forest” motor vehicles and auxiliary technological transport to the largest woodworking integrated plant of Krasnoyarsk Region – Lesosibirsky LDK No. 1 JSC purchased additionally 6 tractor-trailers produced by KRAZ and 2 new front end fork loaders produced by Hyundai.
In 2017, remote logging areas of LLDK No. 1 also received 10 modern logging trucks from IVECO, equipped with trailers and semi-trailers, 5 of them with hydraulic manipulators.
Vyatsky Plywood Mill LLC has successfully passed a certification audit of the plywood manufacturer’s quality management system for compliance with the requirements of ISO 9001 system, and also made the transition from the version of ISO 9001-2008 standard to the new version of 2015. In 2018, Segezha Group plans transition of Vyatsky Plywood Mill LLC to international standards ISO 14001, OHSAS 18001/ISO 45001.
In Sokol, Vologda Region, at the Segezha Group enterprises (affiliated to Sistema JSFC) – Sokolsky PPM PJSC and Vologda Paper Mill LLC signed the Collective Agreement.The document, which entered into force and effect on January 1, 2018, retained all social guarantees and compensation of the previous Collective Agreement, and additional benefits were accepted as well. In particular, the provision of material assistance to parents with many children of first-graders is enshrined; the fixed amount of the financial assistance for the birth of a child and 100% payment of New Year’s gifts for the employees’ children are provided for therein. All the terms and conditions of the Collective Agreement fully comply with the Labour Code of the Russian Federation and with the requirements for the labour protection.
The general agreement between Segezha Group and CAMCE was signed on July 4, 2017, in Moscow at the meeting of the Russian-Chinese Committee for Friendship, Peace and Development of the Russian-Chinese Business Council in the framework of the program of events dedicated to the official visit to Russia of the President of the People’s Republic of China Xi Jinping. The document regulates contractual arrangements for the joint study of projects of mutual interest in the construction of new facilities for high-level processing of wood raw materials and increase the capacity for the production of cellulose in the territory of the Russian Federation.
The purpose of the agreement on strategic cooperation is joint implementation of projects in deep processing of wood raw materials and increasing the pulp and paper products’ production capacities in the territory of the Russian Federation. In particular, it is planned to build a new pulp and paper mill on the basis of the industrial site LLDK No. 1 located in Lesosibirsk (Krasnoyarsk Territory), as well as the reconstruction of existing pulp and paper plants of Segezha Group and construction of a new pulp mill in the Republic of Karelia.
Segezha Group celebrated the 75th anniversary of Sokol Woodworking Plant. This momentous event was marked by 12-millionth linear meter of glued beam. In 2016, the new cutting, slicing and packing line was installed at Sokol WWP, Russia’s first quality control splicing system. Glued wooden houses manufacture has risen by 3.5 times, timber sawing has grown by 24%. The plans include ramp-up of glued wooden houses manufacture through equipment upgrade and stronger sales networking, as well as building up expertise in turnkey houses construction.
Music theater of Karelia staged premiere ballet “Swan Lake” by Tchaikovsky. The show was put up with support from Segezha Group (Sistema JFSC). “Swan Lake” – is a hallmark of ballet art. This piece of classic on stage is a milestone for musical theatre of Karelian Republic. The scriptwriter Kirill Simonov – is the honored artist of Karelia, and the holder of “Golden Mask” and “Harlequin” awards.
On the resolution of Segezha Group Board of Directors, Kamil Zakirov was appointed CEO and Chairman of the Management Board. Before December 2016, Kamil Zakirov served as the Head of “Targin”, an Oilfield Services Group, incorporated in Sistema JFSC.
Further to the resolution of the Russian-Chinese Business Council, Segezha Group forest holding (part of Sistema JFSC) has joined the organization and will take part in RCBC’s timber policy.
Newcomer’s near term plans include export drive of sawn timber and paper to China, partnership in set up and upgrade of ongoing pulp & paper productions in Russia, joint project definition for pulp paper manufacture in China.
Segezha Group’s admission to the Russian-Chinese Business Council came after the top-tier work group visit in autumn 2016. Supported by RCBC and Russian Consulate General in Shanghai, the holding’s officials undertook a series of high-level meetings with business and investment communities from China, as well as with current and prospective partners of the Group. The talks included early consideration of bilateral plans and proposals, including growth in sawn timber and packaging paper exports from Russia to China, expanding the purchase volume of Segezha Group’s merchandise by Chinese companies, transport logistics, project formatting for sack co-production, negotiations for raising investments to Segezha Group’s Russian-wide projects supported by Chinese investment funds.
Driven by export cutback on low margin markets, we shifted delivery volumes of sawn timber and paper southeastward, predominantly to the market of China. Sawn timber sales from Lesosibirsk Sawmill №1 have seen a considerable pickup and reached 31% from total exports. If in 2015, LSM №1 dispatched circa. 85 000 m3 to Chinese customers, in 2016 the volumes amounted to 140 000 m3.
The Russian sack production sites of Segezha Group (part of Sistema JFSC) boosted FP production by 27% at year-end 2016. “Segezha packaging” LLC in the Republic of Karelia (Segezha) and in Rostov Region (Salsk) have shown high production performance. In 2016, “Segezha Packaging” LLC for the first time since the company’s foundation overstepped its record - 500 mln. sacks p.a. Segezha Group’s total annual output including Russia and overseas is over 1,3 bln. of paper sacks.
The Woodworking division’s production plants of Segezha Group (part of Sistema JFSC) completed the annual plan in timber sawing ahead of schedule. Timber sawing record target of 2 211 000 m3 was yielded by joint efforts of four enterprises: Lesosibirsk Sawmill №1 (Krasnoyarsk Area), Onega Sawmills (Arkhangelsk Region), Sokol Woodworking Plant (Vologda Region), and Segezha Sawmills (Republic of Karelia).
Segezha Group joined the European Association of Sack Kraft Paper Manufacturers CEPI Eurokraft, thus having joined 10 member-companies from Sweden, Poland, Austria, Spain, Croatia, Estonia, and France.
The Aalborg sack production plant (Denmark) confirmed its FSSC (Food Safety System Certification) compliance following audit performed by the chartered institution of surveyors DNV GL. Segezha Packaging Denmark became the first production asset within the Group to have obtained this certificate.
Ice rink of the sporting arena “Lumi” in Petrozavodsk hosted the first Republican (Republic of Karelia) ice hockey tournament for Segezha Group Cup, dedicated to the “Workers Day” professional holiday. Competition among amateur teams aged ”40+” sponsored by “Sistema” Charity Fund was held by Segezha Group and the Karelian Ice Hockey Federation to promote and popularize hockey and physical training activities among local population.
Segezha Packaging Ltd. (part of Segezha Group) launched the new paper bag-making machine by Windmoeller & Holscher (Germany) a month earlier than planned. Consequently, the enterprise's consumer paper packaging production capacities have doubled: Segezha Packaging can now produce up to 50 million individual products per year. The new automated Triumph 5QT SM Servo machine was added to an identical machine that had been launched at the enterprise since 2005. The line's universal equipment allows it to produce a wide range of consumer packaging — paper sacks, carrier and block bottom sacks, and is designed to work 24 hours a day. The machine's production capacity is around 24 million packaging units a year.
During the St. Petersburg International Economic Forum – 2016 Sergey Pomelov, CEO of Segezha Group and Vladimir Evtushenkov - Chairman of the Board of Sistema JSFC accompanied by the Governor of Vologda Oblast Oleg Kuvshinnikov, had meaningful discussions concerning prospects for setting up the largest house construction enterprise in Russia based in Sokol. One more ambitious project in the pipeline – is construction of the new plywood mill.
During the St. Petersburg International Economic Forum – 2016 Sergey Pomelov, CEO and Chairman of the Management Board of Segezha Group (part of Sistema JSFC) and Vasily Golubev, the Governor of Rostov Oblast, have signed a Memorandum of cooperation between the regional government and Segezha Group. Segezha Packaging Ltd.'s project in Salsk is included on the list of "The Governor's 100 investment projects" which have social and economic importance for the region's development.
During the St. Petersburg International Economic Forum – 2016, Segezha Group signed an agreement of cooperation with the Kirov regional government and Karelian Republic. The ceremony was attended by Vladimir Yevtushenkov, Sistema JFSC's Chairman of the Management Board.
Contracting machinery supplies as part of the second stage of harvesting and logging fleet upgrade. Investment project suggests acquisition of 162 units of equipment, including 12 logging complexes, 20 imported logging trucks and over 50 units of auxiliary equipment. Invested funds amount to RUB 2.7 bln. Machinery and gears upgrade present the key stage of the Group’s overall investment program.
The joint initiative by Segezha Group and WWF Russia in creating an Environmental responsibility rating for the companies in the forest industry of Russian Federation was presented.
Public hearings of the first Report on Segezha Group's sustained development in 2014–2015 at RUIE (Russian Union of Industrialists and Entrepreneurs) venue was held. This is the first ever document in the Russian forest industry, complying with international GRI G4 reporting standard that breaks new ground for nonfinancial reporting of the Russian timber companies.
Launch of converting mill in Salsk (Rostov Region) running at 90 mln sacks per year. The project delivery increased Segezha Group’s share on the national paper packaging market up to 60%. Installation of the new production line is slated for September 2016; the third line will be rigged up in 2017. Startup investments amounted to RUB 1.5 bln. The new mill will provide stable supplies of quality packaging most regions of the Southern Federal District. Total investments of Segezha Group into the project will amount to RUB 3 bln.
Acquisition of Lesosibirsk Sawmill №1 (Lesosibirsk, Krasnoyarsk Krai). With new asset acquisition, Segezha Group expands its footprint in Russia and geographical scope of its business operation. By increasing sawn timber conversion rate more than twofold, the Group becomes one of the leaders in the segment of timber production and sales in Russia. Ramp-up of sawn timber production up to 900 000 cubic meters p.a. among other benefits gained for Segezha Group product diversification through utilization of new marketable wood species — larch and Angara pine.
Adoption of the new revised growth strategy of Segezha Group at the session of the Management Board of Sistema JFSC.
Launch of the new veneer converting line at «Vyatsky Plywood Mill” LLC. The new line HASHIMOTO DENKI Co. Ltd. (Japan) brought about feed cost reduction at the Mill thus cutting overhead.
Contracting supply of the core process equipment as part of “Segezha PPM Upgrade” project. Total investments for the project stand at RUB 13.9 bln. This is the first Russian-wide project over the past 25 years suggesting setup of the new paper-making machine.
Launch of the new automated paper-sack line for dry mixtures and cement, running at 90 mln. pcs. per year in the city of Segezha (“Segezha Packaging” Ltd). New high-tech sacks production yield has grown by nearly one third to reach 537 mln. pcs.
Segezha Group’s entering the Top-50 list of Russian timber companies at year-end 2014.
Putting in operation the Russian first ever 8-colour printing machine in Segezha city (“Segezha packaging” ltd). The new Italian CRYSTAL 808 120 provides printing for all small orders with enhanced high-resolution colors; these sacks are mainly for dry building mixtures and consumer packaging.
The Group is renamed Segezha Group.
The rebranding process begins.
Shareholder Sistema JSFC approves the Group’s development strategy. Chairman of the Board Vladimir Evtushenkov sets the management goal of becoming the industry leader.
"LesInvest" LLC, part of Sistema JSFC, concludes the purchase of a 100% share in Segezha Pulp and Paper Mill JSC and acquires a 100% share in "Derevoobrabotka-Proekt" LLC.
Sistema JSFC, the largest diversified public holding company in Russia and the CIS, announces that it has signed a legally binding agreement: "LesInvest" LLC is to acquire a 100% share in "Segezha Pulp and Paper Mill" JSC, and a 100% share in "Derevoobrabotka-Proekt" LLC, by the end of September 2014.
President of "LesInvest" LLC, Sergey Pomelov, presents the investment projects for the Group's assets development.
The group follows a large-scale growth strategy for logging, raw wood processing and the manufacture of high added value products in all four Russian regions where it operates, as well as in its European factories.
The modernisation of our existing production facilities and the construction of new ones will allow us to increase our production of craft paper by 40%, whilst tripling our birch plywood production and doubling our paper packaging production. We also plan to intensify our production of wooden houses and glued wooden structures.
The group is actively expanding its sales to include both the traditional European market and new markets. Our strategic plan recognises MENA (the Middle East and North Africa) as a priority region, as well as markets in China, Southeast Asia and Latin America.
In order to implement these ambitious strategic plans successfully, the Group is consolidating its forest assets and increasing its logging volumes in all regions. Raw material is the foundation of sustainable business development, and the Group’s first investments focus on acquiring the most modern logging and hauling equipment.