Rusforest sells off Archangelsk sawmill

Rusforest, Stockholm/SE, sold their sawmill and pellet plant located in the Russian White Sea city of Arkhangelsk for US$ 31 million (€ 25 million). After deduction of liabilities, the net profit amounts to US$ 12 million (€ 9.7 million). There are several buyers, of which only one has been confirmed: ZAO Lesozavod 25 (also known as Sawmill 25), which by own accounts and with 20 locations is the largest wood processing group in northern Russia. The deal includes a sawmill with an annual lumber production volume of 120,000 m³, a 100,000 t/yr-pellet plant and logging rights to the amount of 851,000 sm³/yr.

The transaction should be finalized next week. A US$ 5.7 million deposit (€ 4.6 million) has already been paid, according to Rusforest. Upon receipt of the full amount, Rusforest will be debt free and operate a profitable location in Magistralny/RU. Negotiations for a merger are about to commence with Lesresurs forestry and sawmill company which is also based in Eastern Siberia.

The penalties in the wake of the Ukraine crisis are the main reason for the sale of the Arkhangelsk site, according to Rusforest (which is listed in Sweden). After completion of the pellet plant, the obsolete sawmill equipment would have had to be replaced or a completely new sawmill set up. Because of the sanctions against the Russian financial sector, this investment was not possible without “diluting the shareholder structure”, a company speaker said.