RusForest AB (publ) (“RusForest” or the “Company”) (NASDAQ OMX: RUSF), a Swedish forestry company with operations in Russia, announces the start of wood pellet production at the Company’s LDK-3 sawmill in Arkhangelsk.
The construction of the pellet mill at RusForest’s LDK-3 sawmill in Arkhangelsk is close to completion, and the plant is now in the test-production phase, with full capacity expected by the end of March 2014. As previously disclosed, RusForest engaged AS Hekotek, a mechanical engineering company, to build the wood pellet production facility. The pellet mill will have an annual capacity of up to 100,000 tons and will allow RusForest to monetize its sawmill by-products by exporting wood pellets to Europe.
Matti Lehtipuu, the Group CEO, commented, “I congratulate our project team on starting the pellet mill ahead of schedule. The successful pellet production launch accelerates our path to profitability and gives us solid ground to further develop our core Arkhangelsk assets, including reviewing options for the sawmill itself.”
Total investment for the pellet plant is approximately EUR 12 million, including value added tax (“VAT”), with approximately 70 percent financed by local bank facilities.