In April 2008, UPM signed an agreement to form a joint venture with the Russian Sveza Group to build an 800,000 t/yr pulp mill, a 300,000 t/yr sawmill and a 450,000 t/yr wood panels mill in Sheksna in the South of Vologda.
Feasibility studies are currently being carried out and a decision on whether the pulp mill is to go ahead is expected in 2009. The pulp mill would start operations in 2012. The total investment would be more than €1 billion.
In a press release, UPM states that “Ensuring sufficient logging rights on financially sound conditions is the essential precondition for future investment decisions. In addition, the Russian Federation should confirm financing of the infrastructure projects in the region.”
UPM and the Sveza Group will each hold 50% of the share capital of the new company, OOO Borea. The Chairman of the Board will rotate between the two companies, the first being Andrey Kashubski, Managing Director of Sveza Group.