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Prospects of Kondopoga Pulp and Paper Mill – Plans for the Future
January 29/2015

PAP FOR International Expoforum held in Saint Petersburg is not just a demonstration of feasibility, advanced developments and technologies of pulp and paper industry. This is a great and important discussion forum.

The forum devoted to problems and prospects of the industry was carried out as a part of the exhibition.

Pavel Kalugin (LLC Karjala Pulp) gave a presentation: Prospects of Kondopoga Pulp and Paper Mill – Plans for the Future. He provided readers of Avangard newspaper with some notes for the presentation.

Talking about our Plant without paying attention to the problems of the industry is to throw words out of a song. However, the whole melody includes our couplet – production cost optimization has become the primary objective for the Plant to maintain the position in the market.

We are ready to meet challenges of the changing market and now we are taking steps, for example, to reduce energy requirement of production. In the near future we plan to use gas instead of fuel oil in boiler-rooms, actively develop and apply our own generation on the basis of excess steam, reschedule intraday and annual electricity consumption. With a rational combination of knowledge and real energy cost reduction we will be able to shift load peaks providing an opportunity to play within the wholesale energy market excluding the spot market that is two-three times more expensive.

Another and perhaps the most important element of costs reduction is raw material base in the neighborhood. For instance, our colleagues from Arkhangelsk Pulp and Paper Mill have already pointed out this issue. They complain of cost development resulted from a high price of raw materials delivery due to the fact that it requires a lot of time and costs to transport the raw materials. This problem is common for Pulp and Paper Mills; the companies are simply “doomed” to disappear and be humiliatingly dependent on traders, wood suppliers. To have a rated wood cutting is the issue of paramount importance for us — it means that if there is no rated wood cutting of at least 2 million cbm we will get hooked on suppliers and players in the market. The problem is defined and we have almost resolved it. Raw materials will be in very advantageous proximity to the Plant. Speaking about reduction of costs it is important to remember about the level of production automation and introduction of new technologies. The number of developments and proposals in the market is enough. If we want to be on trend in the market, we have to search for and implement new technologies and there is no way around. Life itself dictates new conditions to us.”

“Thinking about the future, it is necessary to have a clear mind and data integrity. Now there is an economic glut in the market of paper products in Russia: the market is saturated and even oversaturated; it refers to the newsprint paper market. In this regard there is the trend of paper price crash. This year the prices have decreased by 12%. The way out is to intensify steps towards real conversion of production or in other words to ensure reorientation. We have at most three years to find new directions. And by the way, there are rather convincing and demonstrative examples of reorientation of newsprint paper production. There are new and upcoming directions: just look at the rapidly growing market of packaging materials – it is stable, growing and attractive. There is also a need in the paper for glossy magazines. It is no coincidence that we are in the focus of attention and needs of publishers of such magazines – we are able to cope with such import substitution. This is because Kondopoga has experience, professional competence, quality and desire to move forward, develop, propose innovations and, most importantly, turn ideas into reality. Technical capacity is at a high level, as well as the excellent team”.

“If there was not actual production stabilization and readiness for modernization and innovations it would be ridiculous to take part in such an event as PAP POK. We have something to offer and demonstrate, we have opportunities for production optimization and thoughts about the prospects of the Plant. I would say that we have recovered lost ground of Kondopoga Pulp and Paper Mill and now we are working for prospects”.

“Joint Stock Company Kondopoga has evolved from the young shoot into the mature tree. In addition, this tree is strong, beautiful and vigorous. LLC Karjala Pulp invests efforts to make this tree stem sprout and yield great fruits. That is why we are confident that our future should be closely connected with modernization and innovation of production, and it will help Kondopoga, JSC to maintain its steady positions in the paper market”.