Eastern European Markets
June 22. 2006

Metsä-Botnia's sawmill in Russia inaugurated

Metsä-Botnia, who is responsible for the pulp business of the Metsäliitto Group, has built a modern sawmill in Russia, on the banks of the river Svir near the town of Podporodzhye, approximately 300 kilometres east of St. Petersburg. The sawmill, inaugurated on 7 June 2006, is operated by OOO Svir Timber, a Russian subsidiary of Metsä-Botnia. The total investment amounted to 55 million euros, and the sawmill employs 130 persons.

"The Svir Timber sawmill is an important part of Metsä-Botnia's fibre strategy. The aim is to get experience from forest industry investments in Russia and to create a basis for possible future investments", says Erkki Varis, President and CEO, Metsä-Botnia.

The main part of the personnel is Russian, in addition there are Finnish and Estonian employees. The personnel has been trained at the owner companies, Metsäliitto Group's and UPM-Kymmene's sawmills. Special attention was given to work and fire safety and environment care.

The Russian wood procurement organisations of the owner companies take care of the wood procurement to the sawmill. In the future, wood is also obtained from Svir Timber's own cutting rights.

The yearly capacity of the sawmill is 200,000 cubic metres of dried sawn spruce for building industry, distribution chains and further processing. The main markets are Central Europe, Mediterranean, Great Britain, Japan, Finland and Russia.

"The production was started at the beginning of the year and the operations have commenced well. At the moment the production level is 14,000 cubic metres per month, which corresponds to about 75 percent of the nominal capacity. The market situation is reasonably good at the moment", states Eero Smolander, General Manager of the sawmill.

The final investment decision was made in September 2004, whereafter an investment agreement was signed with Leningrad Oblast. The main suppliers in the project were the Finnish companies Lemcon, YIT, Heinolan Sahakoneet Oy, Tekmawood Oy, Valon Kone Oy, Wärtsilä Biopower Oy, the Estonian company Hekotek and the Russian companies Spetsstroimehanizatsiya and Lenenergo.

For further information
Further information: Jukka Laitinen,
Senior Vice President, Metsä-Botnia
tel. +358 500 691927

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