OREANDA-NEWS. October 23, 2007. A tripartite cooperation agreement was signed in Moscow by and between the Bank of Moscow, Republic of Karelia and the Investlesprom lumber holding. The document was signed by Andrei Borodin, President of the Bank of Moscow, Sergei Katanandov, head of the Republic of Karelia, and Dmitri Maslov, Director General of the Investlesprom holding company.

The Bank of Moscow is the largest creditor of Investlesprom’s Karelian enterprises, having financed them for a total of more than 3.3 billion rubles, and intends to continue to offer its advice required for the policy of development and coordination of Investlesprom’s investment projects and working out of the schemes for their financing.

Under the Agreement the Republic of Karelia undertakes to pursue a policy aimed at the development of production processes allowing to reduce the export of raw wood and pulpchips. With no prejudice to the rights and lawful interests of other investors the Republic of Karelia will ensure the Investlesprom holding has equal opportunities to implement its strategic investment plans.

The Investlesprom Closed Joint-Stock Company is the largest investor in the lumber industry of Karelia: its enterprises account for more than 20% of wood harvested in the Republic, the proceeds of its subsidiaries in Karelia exceed 14 billion rubles, the number of people they employ exceeding 8 thousand. In 2007 alone the holding invested more than 1.1 billion rubles in the development of the lumber enterprises of Karelia, including the projects of reconstruction of 9 papermaking machines at the Segezh pulp-and-paper plant and the purchase of machinery and road construction connected with the development of forest harvesting operations.

The strategic five year plan (2007—2012) for the holding enterprises in Karelia envisages more than 20 billion rubles’ investments, mainly in the reconstruction of the Segezh pulp-and-paper plant to bring its output capacity up to 600 thousand tons of pulp. Implementation of these plans will allow to create more than 3000 new jobs both in the holding and at the allied enterprises, to increase the felling volumes, to double the lumber processing output in the Republic and to strengthen its tax base.

The forest harvesting operations in the Segezh, Mouyezersk, Kostomouksha and Medvezhyegorsk regions are to be increased more than 1.5 times to bring the timber output volume to 2 million cub. meters a year due to, among other things, better forest management. More than 1 million cub. meters out of the above amount will be processed at the wood-sawing enterprises in Mouyezersk, Segezh and Medvezhyegorsk. Besides, the holding and the Karellesprom lumber company (OJSC) have created a joint venture to develop an investment program for the Pudozh region of the Republic of Karelia.