Russia’s wood-based panels market is revealing some positive dynamics this year, despite the ongoing pandemic and the existing threat of military escalation with Ukraine.
This is reflected by the ongoing commissioning of large-scale facilities for the production of wood-based panels in different parts of the country.
For example, at the end of 2021 Austria’s Kronospan finally commissioned one of its biggest plants in Russia for the production of fibreboard in the Russian city of Kaluga. Annual capacity is 600,000m3 and the investment amounted to RUB15bn (US$200m).
And, while Kronospan was not available for comment, according to Kaluga authorities, the company is ready to invest another US$200m in the expansion of its capacities in Russia within the next several years.
Chinese plant supplier Yalian received an order in 2021 for a very large particleboard line at Kaluga with a daily capacity of 3,100m3. Installation is currently ongoing.
In the meantime, most analysts believe the Austrian company will already be faced with strong competition in the Russian boards market in the short-term. This will mainly be due to the appearance of some strong local rivals, many of which continue the expansion of their capacities this year.
One such company is Uvadrev-Holding, one of Russia’s oldest board producers (founded in 1935), which is based in Udmurtia Republic (Volga region) and which plans to build its second plant for the production of particleboard this year.
For this purpose, last year the company reached an agreement with Siempelkamp for the supply of its machinery.
Under the terms of the contract, Siempelkamp will supply a 32.1m-long 9th-generation ContiRoll continuous press. The new plant will have designed capacity of 500,000m3 per year.
According to Uvadrev-Holding, the commissioning of the new facility will not only allow it to expand its production capacities, but also optimise quality and production costs. The new plant will produce ready-made boards of 1830 x 2750mm and 2070 x 2800mm formats, that will primarily be used in the furniture industry.
This will be the second major particleboard facility operated by Uvadrev-Holding. In 2012, it commissioned a 300,000m3 facility, with equipment also provided by Siempelkamp.
According to the company, construction works for the second plant will be under way in the first quarter of this year.
In the meantime, 2022 will also see a number of projects for the manufacture of OSB being launched in the Russian Siberian region, which, so far, has experienced a shortage of this type of wood-based panel.
Probably the biggest of these projects is currently being implemented by the Monolit- Story enterprise, which plans to launch a new OSB plant near the city of Tomsk. Total investments in the project will be RUB5bn. The new plant will produce up to 250,000m3 of OSB per year and create more than 600 new jobs.
Implementation of the project is controlled by the authorities of the Tomsk region and personally by the governor, Sergei Zhvachkin.
According to earlier statements by Andrei Knorr, deputy Tomsk governor for Agriculture and Nature Management, which were made in an interview with Tomsk-based RiaTomsk newswire, in general most of the Italian equipment for the plant has already been delivered and is already being installed.
“We had initial plans to launch the plant in late December 2021, but due to pandemic measures, 44 power plants have not yet been delivered,” said Mr Knorr. “Some are supplied from Belgium, while the remainder are from China. The latter have been standing on the Chinese border for a month.”
According to Mr Knorr, this will not be just a simple wood processing plant, but a major recycler of low-quality wood for the needs of OSB, particleboard and MDF production.
The new plant will be built on the basis of assets of LPK Partner-Tomsk – the company declared bankrupt in 2017 and its assets were purchased by Monolit-Story in the same year. The company purchased the existing lines for the production and lamination of MDF boards, a complex of buildings and warehouses of LPK Partner-Tomsk, as well as its logging assets.
Following this, the new owner almost doubled the volume of MDF production and began the production of laminate and finished products.
In the case of MDF, according to Daniil Ryabchenko, general director of Monolit- Story, in 2021 its output amounted to 330,000m3, making the enterprise one of the largest MDF producers in Siberia – and in Russia as a whole.
The Monolit-Story enterprise will not be the only OSB project that will be launched in the Tomsk region within the next year or two. Several weeks ago the local company Sibboard announced its readiness to begin construction works for the building of a new OSB plant near the closed nuclear city of Seversk.
The new plant will be built within the territory of the Seversk advanced socio-economic development area and will receive major benefits from the Tomsk authorities.
The company will use aspen and birch as raw materials in its production and is planning to invest about RUB340m in the first stage of the project.
Finally, the third major OSB plant in Russian Siberia will be built this year in the Krasnoyarsk region by the local company Angara Les OOO, which is part the Karat Group of companies, one of the oldest wood processing enterprises in the region.
According to Sergei Tarasyuk, the director of Angara Les LLC, the new plant will be located in the city of Kodinsk in the north of the Krasnoyarsk Territory, while investments in the project will amount to RUB3.1bn (US$40m)
Annual capacity will be 100,000m3 of finished products and, according to some local analysts, the company will probably consider the possibility of the expansion of the plant in due course.
As Mr Tarasyuk revealed in an interview with the Russian TASS magazine, the new OSB plant will be a further development of wood processing in the region (which already has several sawmills and pellet plants) and will be more focused on the domestic market.
Most analysts believe one of the reasons for the ever growing interest of investors in the building of new OSB production facilities in Russian Siberia is the possibility of the beginning of supplies of their future outputs to the Asia Pacific states, particularly to China, where the demand for Russian board has significantly increased in recent years.
The recent ban on the export of unprocessed and roughly processed wood from Russia (effective from January 1 this year) will probably stimulate the building of new wood-based panel production facilities within the territory of Russia (that will be oriented both on the domestic and foreign markets) and will contribute to the reduction of raw materials’ prices.
At the same time the only bad news for the industry is the existing plan for the rise in the current duty on the imports of melamine to Russia from 5% to 20%, which was recommended by the Eurasian Economic Commission after a complaint of Chinese dumping by the domestic monopolist for the production of melamine, Nevinnomysky Nitrogen (part of the Eurochem group).
According to analysts, Russia currently only produces low-pressure melamine, with the majority of high-pressure melamine used in the production of boards in the country being imported from abroad.
According to wood-based panel producers, the rise of duty will force them to increase prices for their products by 10%.
