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Management Side
Ilim Group to Invest Further in the Irkutsk Oblast
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Irkutsk, St. Petersburg, Russia, 09 September 2010 — Ilim Group is currently implementing an investment project to install a new fiber line in Bratsk, with the total amount of investments being USD 670 million, according to Zakhar Smushkin, board chairman of Ilim Group, who spoke at a plenary session of the Baikal Economic Forum in Irkutsk. His presentation was dedicated to investments into the forest products industry and ways to improve efficiency in using forest resources.

According to Smushkin, Ilim Group has already invested more than USD 130 million in purchasing high-performance harvesting, wood hauling, road construction and auxiliary equipment in Siberia, as well as in the construction of forest roads. These investments resulted in doubled production per unit of equipment, a 20% reduction in wood costs, and an increased output of saw logs. Moreover, working conditions in the forest were brought in compliance with the modern-day requirements.

Ilim Group’s aggregate investments in the Irkutsk Oblast will exceed USD 860 million.

Smushkin also covered some of the major issues the company encountered while implementing this project, including lack of sufficiently experienced construction and installation companies in the region, and the need to engage additional workforce, because the peak phase of the project will require up to 1500 people.

In the area of forest management, apart from the poor road infrastructure, Smushkin has stressed the issue of low yield of wood per unit of timberland as compared with the industrially developed countries. A possible solution to these issues would be to provide major forest products companies with the right to organize special-purpose harvesting operations on the leased timberland plots. This would allow them to increase harvesting volumes without leasing additional timberland plots, reduce harvesting and hauling costs, and improve forest regeneration quality. In 2010, Ilim Group launched a pilot project to introduce this concept in one of the forestries of the Irkutsk Oblast.

 

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