Vladimir Krupchak: “We intend to expand our opportunities of our synergy in the market of readymade packaging”

The shareholder of JSC “Arkhangelsk pulp and paper mill” – Pulp Mill Holding – intends to expand the opportunities of the existing synergetic model in the Russian market. According to Vladimir Krupchak, a member of the Board of Directors of APPM, the ultimate goal is to balance the available capacity as much as possible by building of waste containerboard production plant (WCB).

“Today the holding’s enterprises produce 360 million square meters of corrugated products per year, by the end 2019, we expect a figure of 540 million square meters, by 2020 – 850 million square meters, – said Vladimir Krupchak. “The Arkhangelsk pulp and paper mill provides plants with high-quality raw materials for pulp production, and there is no enough volume of recycled pulp of sufficient quality in Russia.”

According to him not a single paper machine for the production of WCB has been installed in our country in recent years. And the existing capacity isn’t enough to meet the dynamically growing demand.

Speaking about the project Vladimir Krupchak noted that the optimal territory for its realization, as in the case of the acquired company Europac, would be one of the regions that are inclined to the south of Russia. “There are a lot of enterprises belonging to the agrarian sector of our economy in the Southern Federal District. They are always in consumer demand (production of canned food, juices, alcohol, meat, etc.),” he said. – And, despite the fact that there are several large competitors in the corrugated packaging market in the Southern Federal District, which provide up to 80% of production in the region, here, as before, the consumption of these products is almost twice as large as its production, and the deficit is covered by imports or supplies from other regions of the Russian Federation. ”

As Vladimir Krupchak summed up, the WCB segment in the product line of the holding will logically complete the formation of the vertically integrated structure of Pulp Mill Holding, which will meet all the challenges and requirements of the Russian corrugated packaging market

Vladimir Krupchak: “In March 2019 Arkhbum Tissue Group will come into Russian market with strong brand Soffione”

Affiliated company of Arkhangelsk PPM, JSC – Arkhbum Tissue Group, JSC is planning to hold up to 15 % of tissue paper in Russia. It was stated by the member of the Board of directors Vladimir Krupchak.

According to his words, shareholder of Pulp Mill Holding company has a number competitive advantages. Among them – a vertical integration within the group of companies, which minimizes risks related to raw materials due to the fact, that assets in Vorsino of Kaluga region will work with fine fiber FSC-certified raw materials of Arkhangelsk PPM.

The factors of successful entry to the market include, according to Vladimir Krupchak, owned rail car fleet and motor vehicle fleet which will allow Arkhbum Tissue to minimize logistic expenses, unique location of the mill by the side of Moscow ring road, Central Federal District in general, as the major center of products consumption, perfect logistics (one of the most modern dry transport ports of Russia – Kaluga Freight Village – is located 2 kilometers from this place) and availability of highly qualified specialists, working at production departments of Holding as well.

“Now the capacity of the first order of our factory in Vorsino is 70 thousand tons of tissue paper per year with the perspective of a growth up to 210 thousand tons of products per year; this will partially satisfy the demand of tissue products in Russia” – noted V. Krupchak.

At the moment, the consumption of paper tissue products in Russia is about 3.5 kg/ person per year. In Europe it is 12-15 kg/person per year, in Eastern Europe 8-10 kg. According to the data of APPM marketing department, during 2018 country consumption of tissue paper will increase up to 500 thousand tons by the end of the year. It will early grow on an average by 4-6 % up to the level of 800 thousand per year and higher by 2030.

The Adviser to the investment activities of Pulp Mill Holding: Signing of loan agreements with UniCredit Group is an important step in the modernization program of APPM

Signing of two loan agreements between Pulp Mill Holding (Austria) and UniCredit Bank Austria AG for a total amount of more than 80 million euros is an important step in the modernization program of Arkhangelsk Pulp and Paper Mill.  Vladimir Krupchak, the Adviser to the investment activities of Pulp Mill Holding made such a comment on the financial transaction.

The relevant financial documents were signed on 29 June 2017 in Vienna (Austria) at the Board of Directors of JSC “Arkhangelsk PPM”.

The loans raised will be spent on financing of the technical re-equipment program of Arkhangelsk Pulp and Paper Mill during 2017-2018 years, including construction of a new evaporator plant and reconstruction of the Board machine No. 2. Both projects are an important part of the priority investment project in forest development “Reconstruction of Board Production” registered in the Ministry of Industry and Trade of the Russian Federation.

It must be recalled that total investments of APPM up to 2020 will exceed 23,0 billion rubles. The mill is implementing the second stage of the priority investment project “Reconstruction of Board Production” included by the Ministry of Industry and Trade of the Russian Federation into  the list of the priority projects for the  Russian economy, the cost of which is 8.8 billion rubles.

Pulp Mill Holding’s key objective – occupational and health safety

Among the main priorities of corporate social responsibility (personnel, society, ecology, development of the territory of presence), the management and shareholder of Arkhangelsk Pulp and Paper Mill – Pulp Mill Holding (Austria) – consider the problems of labor protection and safety as a key objective. Vladimir Krupchak, investment adviser to Pulp Mill Holding, commented that in 2016 investments in improvement of working conditions and occupational safety increased by 48% if compared to the same period of the last year and amounted to 112.1 million rubles.

“Over 15 years Arkhangelsk Pulp and Paper Mill has been investing in training of managers, specialists and workers in labor protection and industrial safety, in repairing of sanitary facilities, special assessment of working conditions,”  – Vladimir Krupchak said.

According to Vladimir Krupchak, the results of the final conference of the employees of JSC Arkhangelsk Pulp and Paper Mill, its subsidiaries (Arkhbum JSC, Byt JSC) and the trade union organization of the enterprise as for implementation of the Collective Agreement for 2016 confirmed high standards of the company’s activity in social responsibility field in Russia.

In 2016 Arkhangelsk PPM spent 276.2 million rubles on social programs and benefits.

 

Vladimir Krupchak: in 2015 investments into forest complex of Russia decreased by 9% till 106,4 billion rubles

The institute of the priority investment projects is the most important mechanism of forest complex development. By the beginning of 2016 total investments necessary for the realization of the projects have amounted to nearly 400 billion rubles. Vladimir Krupchak, the Investment Policy Advisor of Pulp Mill Holding declared about it on November 30 at the II International Conference “Pulp and Paper Industry – New Realities, New Opportunities” in Vienna, Austria.

He noted that last year investments into the Russian forest complex amounted to 106,4 billion rubles that is 9% less  if compared to 2014. The largest share of investments – over 44% – was spent on development of the pulp and paper industry, 41% – on wood-processing industry and only 8% was invested into development of logging. The amount of investments into pulp and paper industry (47,1 billion rubles) did not change in comparison with 2014.

As Vladimir Krupchak told at the conference, growth of investments was recorded in production of pulp, woodpulp and cardboard, the investments decreased into production of paper and products made of paper and cardboard, tissue, corrugated boxes, etc. The structure of investments:  own finances – 55,1%, – attracted funds – 44,9%, including bank credits– 9,1% (within  foreign banks  – 3,4%),foreign investments – 33,5%

«I wanted to pay you attention to the fact that large industrial holdings, as Pulp Mill Holding, are most active in the investment business. The holding comprises such large pulp and paper mills as JSC «Arkhangelsk PPM», Kiev PCM, enterprises engaged in production of corrugated board and boxes JSC «Arkhbum», -Vladimir Krupchak said. – In 2015 total revenues of the holding was 554 million Euro, for the two past years total investments have exceeded 124 million Euro».

The speaker demonstrated both the competitive advantages of the Russian producers of pulp and paper products and the challenges and restrictions which slow down fast development at the example of JSC “Arkhangelsk PPM”.

Krupchak noted that the competitive advantage of the enterprises working in the vertical-integrated complex is creating of a technological production chain from a «stub» up to a final product with high-added value, a favorable credit history, successful realization of the investment projects, including construction of several enterprises from «start-up», a close geographical proximity to the European markets and a wide foreign economic activity at the international market, etc.

Alongside he stressed some problems which slow down the development of the Russian pulp and paper enterprises. This is insufficient support of perspective investment projects which concern forest resources due to the economic non-availability, lack of well-grounded criteria of forest plots presentation to the most efficient investors, high cost of borrowed funds at the Russian financial and credit institutions, weak development of transport forest infrastructure, problems of transportation by roads due to limitation of the axle load of logging truck and seasonal road closure, lack of qualified employees due to low attractiveness of the industry for the young people and difference between educational programs and professional standards.

The Investment Policy Advisor of Pulp Mill Holding paid attention to the measures which are to be taken. Among the priority measures Krupchak noted improving of raw wood supplies to the pulp and paper mills, for example, compensation of “out” forest plots of the forest funds, in the form of additional lease of forest plots or decrease of lease payment due to limited logging in the High Conservation Value (HCV) areas. Secondly, increase of technical level of the pulp and paper production, change of the inclusion mechanism of investment projects into the priority list in accordance with their contribution into the GDP of the forest complex, to determine the criteria of the most efficient projects for priority state support. Thirdly, support of innovative development of the pulp and paper production from the part of state support, creation of the engineering centers, growth of R&D, innovation technologies, etc. Fourthly, development of ecological kinds of containerboard boxes, which replace the polymer products. Finally, perfection of the stuff assistance of pulp and paper mills via exemption from the profit tax, spent on material support of colleges and Higher Education Institutions, or to include expenses on educational purposes into the prime-cost.

 

Reference

Pulp Mill Holding GmbH – — an Austrian-German group (headquarters in Vienna, Austria), which unites a group of enterprises producing paper, cardboard and corrugated packaging. Main shareholder is the private fund of Dr. Heinz Zinner.

Founded in 2001.

The holding owns 100% stock of JSC «Arkhangelsk PPM» on the territory of Russia. The group JSC «Arkhangelsk PPM» includes JSC «Arkhbum» (logistics, corrugated packaging production in Podolsk and Istra branches), ООО «Arkhbum Tissue Group».

In Ukraine the holding owns PJSC “Kiev Cardboard and Paper Mill” (99,3%).

Number of employees – 7,5 thousand.