Monday, 30 November 2009 10:45

 It’s always easier to reach the top of the mountain, when you have all the equipment, but still it all depends on every step you take. A similar situation is observed, if you take a look at Investlesprom CJSC. With rich timber resources of Russia these are still the decisions the company makes, which make its business a success. Investlesprom CJSC is a group of companies that is now one of the top businesses in Russia providing Russian companies, international and transnational corporations with timber and paper products.
Written by Kateryna Ferdyn. Based on the Interview with GR & PR Department Director, Investlesprom CJSC, Aleksandr Boikov.

The group of companies was formed in 2006 with the help of the Bank of Moscow. Over the three years, the Investlesprom CJSC has became one of the largest vertically integrated forest industry structures in Russia. It includes more than 50 enterprises of timber, wood-working, pulp and paper industry and paper packaging. The key products of the company are sack paper, newsprint, paper sacks, packaging paper, packaging board, sawn timber, particle board, fiber boards, plywood, building construction, printing products. The key regions in Russia for the company are North-Western and Northern regions namely Republic of Karelia, Kirov, Arkhangelsk and Vologda regions, Perm’ Territory. Moreover, in Russian wood industry complex Investlesprom CJSC is the only international company by assets composition, including eleven enterprises in Western and Eastern Europe as well as in Turkey.

The first but by no means baby steps

The group of companies was formed not that long ago, but every year of its history brought about considerate growth and development. During its first year the company determined the strategic goal for the future. The goal was to create the largest national integrated company in timber industry in Russia. The project was supported by both the financial structures and the government. Having set the goal to reach the company began the accumulation of assets, the organization structure development, signing of the long-term cooperation agreements with the regions and strategic investors. During the same period of time the plants were being modernized, the newest technology and equipment was being bought. At the present time the company is making the steps to optimize the work of the plants and the company altogether to fit into today’s economic tendencies in the world. Another focus of the company right now is the reduction of costs, but not at the expense of the biggest in the industry investment projects that keep being carried out. The structure of the company has also been carefully worked out. Two main aspects had been considered: the functions and the territory. The administrative headquarter of the company based in Moscow includes the bodies to supervise the work of the enterprises in the key regions namely Republic of Karelia and Vologda region. The functions of the headquarter are obvious from its very title. The Government Relations and Public Relations Department (GR & PR Department) is also a part of the administrative headquarter. All of the enterprises of the company are united into divisions and departments according to their products and kind of activity. They are “Forest resources”, “Wood-working”, “Pulp and paper industry”, “Paper sacks”, and “Pushkin Square” Printing and publishing integrated works. One of the strategies the company holds on to is to firm its position on the already tapped markets (which implies quite a number of them) and on the Middle East markets (Iran, Iraq, Pakistan).

Something to be proud of

One of the things the company considers its strategic potential is the staff that includes gifted and experienced experts, who are qualified and good at finding creative and unusual answers to the questions that arise in the midst of the challenges of the competition. The general number of the workers of the group of the companies is about 15.000 with about 100 people in the administrative headquarter in Moscow. The company didn’t just inherit some of the best enterprises in timber exploitation, paper production and paper packaging, wood construction, but it also upgraded and rebuilt some of them. Today the company is one of the biggest timber exploiters in the European part of Russia renting about 6 mln ha of the forest and being the second in timber stockpiling in Russia. Investlesprom CJSC is the leader in sack and coated paper industries markets. As to the production volumes of the coated paper the company is the third in the world and the second in Europe. Another thing the company wants to be a leader in is the reduction of costs, which is achieved by vertical integration, investments policy, the best technologies and modern system of management. The annual receipts for the current year are about 22 bn of rubles. To take a glimpse of the supplies of the company we can look at one of the companies of the group. Segezha Packaging paper bags plants are located in 10 European countries (Spain, Italy, Germany, Netherlands, Denmark, Check Republic, Romania, Serbia, Ukraine, 2 plants in Turkey), and 2 more plants are in Russia. Traditionally the Russian plants supply the Baltic and CIS states with paper bags, and the European ones supply all of the European countries. The country of production doesn’t always match with the country-customer in this case. The Segezha paper is sold to the countries all over the world (Europe, India, Africa, Asia). As to the company’s look into the future, it is quite bright and promising for Investlesprom CJSC. The largest investment projects are going to be carried out. One of those are LWC Kama project to produce light coat paper in Russia. The goal of this project is to be able to meet the needs of Russia for this product and cut off the supplies from Europe and Asia. LWC Kama is supposed to work in full in 2010. Another project is planned to be started at the end of 2010. Vologda Manufacturing is supposed to become a modern production of 600.000 ton of light and medium-weight coated paper in rolls and sheets in less than five years from now to meet all of the printing and publishing needs of Russia. The Polar Bear project is meant to reconstruct and increase the capacity of Segezha Pulp and Paper Mill in order to turn it into the largest and the world’s most modern enterprise of birch bleached softwood / hardwood pulp production. Some of the important characteristics of the project are an integrated processing of all raw wood and reduction of the environmental impact on the region. Additionally the processing will involve about 2,5 mln. cub.m of raw wood per year. Estimated investment volume is almost 1 milliard euro, preliminary term of construction and reconstruction completion is 2013.

What about the environment?

The very first stages of the production are performed in full accordance with the environmental requirements - forest certificates. As it was mentioned earlier, the general area rented by the enterprises of the holding covers almost 6 mln ha, 4,5 mln ha of which are voluntarily certified according to the system of Forest Stewardship Council (FSC). The company has worked out the procedure of evaluating the impact on the environment to meet the standards of forest certificates. After that an enterprise expert performs the evaluation of the potential impact on the environment together with the withdrawal of timber cutting areas before any kind of activity in the forest whether it’s forest felling or building of a road. In 2007, Investlesprom CJSC officially ratified the general Policy in the sphere of responsible forest exploitation and procurement. This step is the beginning of the process of voluntary certifying of forest management and the timber supply links according to the international standards of Forest Stewardship Council (FSC) by the enterprises of the holding. In 2008, Investlesprom CJSC became a member of the environmentally responsible forest exploiters of Russia. That’s why it can be stated that those who buy the Investlesprom’s products can be sure that they are sold the environmentally friendly products, made of timber processed according to the international requirements of socially responsible and environment-oriented forest management. The verifying FCS trade sign can be placed on any product of Investlesprom CJSC starting from a log in the forest, a board finishing with paper pulp and paper. The FSC certificates are now also used for the wood houses that can be legitimately called environmentally friendly. Birch plywood is certified according to the international standards too. The safe standards are especially kept in the production of bags for the food industry. The company pays certain attention to the fulfillment of the Kyoto protocol regarding the reduction of pollutant emissions. In 2006, a boiler house room that works on neutral bio-fuel was successfully built in Onega in Arkhangelsk region. This boiler house room supplies the town with heating and helps reduce the pollutant emissions. This short overview of Investlesprom CJSC’s activity shows that the company uses its potential to the fullest in order to maintain the present leading position and reach even better results. The company seems to not be frightened by the financial challenges around the world but rather determined to find the ways to break through no matter what’s coming its way.