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Segezha Group

MTC

Segezha Group is one of Russia’s leading vertically integrated timber industry holding companies. With operations spanning the full cycle from logging to value-added wood fibre processing, Segezha Group has a global presence and a diversified product portfolio. The Group comprises forestry, woodworking and pulp and paper operations in Russia and Europe. Segezha’s assets are located in eight countries and six regions of Russia. Segezha Group products are regularly sold in 88 countries worldwide, and its enterprises employ 13 thousand people. 

Business description

Segezha Group leases 6.8 million hectares of forest land, and is the largest forest user in the European part of Russia. Segezha Group is the #1 producer of paper bags in Russia (52% of the market) and #2 in Europe (16.3% of the market); the Group is #1 in Russia (71% of the market) and #4 in the world in terms of the production of high-quality unbleached sack paper; Segezha ranks 5th in Russia and 7th in the world for large-format birch plywood production, and; it is Russia’s largest producer of sawn timber and prefab houses from laminated veneer lumber.

Segezha’s business includes four main subdivisions: Paper and Packaging, Wood Processing, Plywood and Wood Resources.

Paper and Packaging: In 2016, Segezha exported paper and packaging to 53 countries. Paper supplies to South Africa grew six-fold, to South Korea four-fold, and to Saudi Arabia, Mexico, China, Turkey and Kuwait two-fold. While the Russian market of industrial sacks shrank, Segezha Group increased its market share thanks to a more successful pricing policy than foreign competitors. In 2017, the Group plans to start selling sacks in some new countries in the Middle East, Africa and Latin America, while maintaining its current share of the European market.

In 2016, the company began modernising Segezha Pulp and Paper Mill. It is Russia's first investment project in the last 25 years that envisages installation of a new paper-making machine (PMM No.11). The project is divided into three stages and will be completed in 2018. During the first stage, in autumn 2016, digester No. 4 was upgraded, which increased the capacity of the pulp production facility by 28%, to 1,150 t daily. 

Wood processing (sawn timber): Exports account for 99% of Segezha Group's sawn timber sales. The geographical footprint of sales expanded from 11 to 14 countries. The biggest growth of exports was seen in China, the UK, France, Egypt, Estonia, Germany, Belgium and the Netherlands.

Lesosibirsk LDK No.1, which was acquired in early 2016, reported strong financial and operational performance during the year. The plant modernised its production facilities, optimised business processes and improved management efficiency. Segezha Group is beginning to work with new timber species that are in high demand: larch and Angara pine. After the acquisition of Lesosibirsk LDK, Segezha Group has become Russia's biggest exporter of sawn timber.

Plywood and wood boards: In 2016, with domestic demand declining and demand on foreign markets rising, Segezha increased the share of export in its sales from 71% to 77%. The company's products in this segment are now available in 59 countries (vs. 46 in 2015). In 2017, the Group plans to develop its customer base, and to enter new markets and consumption segments, such as car-making and shipbuilding.

Prefab houses: Segezha Group remained Russia's No.1 producer of prefabricated log houses (30,300 cu m) in 2016. To increase its share of the domestic market in 2017, the company plans to develop a sales force in regions, and set up an in-house architectural and design unit and a customer support service. It will also build a large timber-processing cluster around the Sokol Woodworking Plant in Vologda region. 

For information about the financial results of Segezha Group please refer here

63%
Own forestry consumption
60%
Share of the Russian paper packaging market
16.5%
Share of the European paper packaging market

Key Executives

Kamil Zakirov

President

Sergey Pomelov

Chairman of the Board of Directors

 

 

Corporate website:
http://segezha-group.com/