Segezha to consolidate CJSC Novoyeniseiskiy Wood Chemical Complex

26 May 2021

Russian integrated forest products Segezha Group has announced plans to consolidate 100% of CJSC Novoyeniseiskiy Wood Chemical Complex.

Segezha, which operates forestry, sawmilling, plywood manufacturing and cross-laminated timber production, announced on May 20 its signing of an agreement to purchase a minority stake in Tegli Holdings Ltd – the company which owns NWCC.

The acquisition of the stake will allow Segezha Group to further consolidate 100% of control over NWCC and integrate the asset into the Group.

The assets of CJSC Novoyeniseiskiy Wood Chemical Complex are located in Lesosibirsk, Kransoyarsk Krai. The town also hosts Segezha Group's timber, fibreboard, and pellet production cluster – it includes JSC Novosibirsky LDK No. 1, Ksilotek-Sibir LLC and logging assets. The purchase of NWCC will help the holding company to increase its capacity of timber production by 30-40% and pellet production by 55%.

The total estimated cutting area of the Group will grow by approximately 37% (by 2.2 million m3), which will strengthen the resource security of Segezha Group companies and will further allow for the development of the Segezha Vostok project on the construction of a state-of-the-industry deep wood processing biotechnological complex.

Moreover, the increase of the cutting volume using the areas of newly purchased NWCC and the co-management of the region's two large companies (NWCC and LDK No. 1) will allow materially increasing the efficiency of wood processing and timber sales. Those two facilities together will produce over 1 million m3 of timber per year at one location (Lesosibirsk).