Eastern European Markets
November, 23. 2005

Koskisen starts wood processing in Russia

Koskitukki Oy is the parent company of Koskisen Group that was founded in 1931 and today it is one of the biggest family owned mechanical wood working companies in Finland. The company is owned by Koskisen's family. Over the past 70 years the company has developed from a local sawmill into an international operation with its headquarters in Järvelä, Finland. Turnover of the group is 169 million Euros and its annual wood consumption is about 1,000,000 m3. The group employs 1000 skilled people, and the product range includes timber, plywood, chipboard, birch products and houses. 63 % of the production is exported through company’s own sales office network

Koskisen Group has probably the widest product range available in birch products: birch timber, birch edge glued panels, decorative veneers, aircraft plywood and birch plywood. This enables optimal raw material utilisation and it gives our customers a wide product range for many end-use applications.

Based on this knowledge, Koskisen Group has decided to start operations in Russia. The group's parent company Koskitukki Oy is to build a birch sawmill, veneer and plywood plants in Sheksna, Vologda Oblast. The project will be implemented in two phases. Phase 1 will be a birch sawmill with 20,000 m3 capacity. Phase 2 will be a birch veneer factory with an annual capacity of 5,100 m3 and a birch plywood factory with an annual capacity of 30,000 m3.

The project will be realised by Koskisilva, a Russian company established by Koskitukki Oy. Wood procurement will be taken care of by another company Koskidrev, also established by Koskitukki Oy. The total cost of the project is 38 million Eur. EBRD is to provide financing to Koskisilva in the form of 1.2 million Eur equity in Phase 1 and a 12 million Eur loan for Phase 2. The plants will consume approximately 170,000 m3 of birch logs per year. This investment will have a positive impact in the local economy and the plants will employ approximately 300 people.

The wood resources of different regions in the north western part of Russia were intensively studied and this was one of the reasons why Vologda county was chosen. Koskitukki Oy has also long experience in purchasing logs from this area. The quality of birch is good and Koskitukki is a well known buyer in the chosen area. The enviromental impacts of the project have been studied together with EBRD bank. The purpose is to have the same high environmental and quality standards that Koskisen Group is applying to its operations in Finland.

Koskisen Group’s sales office network will take care of the export markets of Koskisilva’s production. Domestic market in Russia will be handled by Koskisilva. Koskisilva’s products will complement and increase the product range available to our customers. This project strengthens Koskisen Group's position as one of the world leaders in birch timber, veneer and plywood manufacturing.

For further information:
Kari Koskinen: Koskitukki Oy, member of the board, Koskisilva, general director
Kari Wuolijoki: Koskitukki Oy, managing director

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