An OSB plant in Vologda

The authorities of the Vologda region, together with a group of private investors, have officially announced their intention to build a large-scale OSB plant in the region during the next several months, according to press service of the Vologda government.

Vologda is a major transport hub in the northwest of Russia, some 500km north of Moscow. The project was first put forward in 2012; its implementation was suspended, however, due to the economic crisis in Russia.

The volume of investment in the project is estimated at 5bn rubles (US$140m). The plan is for the new plant to be built in the Nikolsky area of the region, on a 10-15ha site. When completed, it will significantly increase the volume of low-grade hardwood processing in the region and will create up to 300 new jobs.

The plant will have the capacity to produce 500,000m3 of OSB per year. Construction is expected to start by the end of October this year.

It is planned that the majority of funds for the project will be provided by the Development Corporation of Vologda, which is a public association affiliated with the authorities of the region. At the same time, according to Alexander Perfillev, director general of the corporation, there is also a possibility of attracting private investors to the project.

The raw materials that the new plant will process are pine (10%), spruce (20%) and aspen (70%).

The partners have also not ruled out the possibility of expansion of the plant to produce MDF and particleboard.

According to analysts of the Russian Ministry of Industry and Trade, at present the annual demand for OSB in Russia is estimated at one million m3 a year, with the possibility of a significant increase over the next several years.

Until 2010 the majority of local demand was met by imports from the EU states (in particular Austria) and the Baltic countries.

However the planned launch of several large-scale domestic investment projects is changing this. The volume of imports, according to analysts’ projections, will significantly decline by 2017-18.

The Vologda plant is expected not to be the only project involving large-scale production of OSB in Russia. A new OSB plant is being officially opened in the second half of 2016 by Ugra-Plit, one of Russia’s largest board producers. The plant will have the capacity to produce 200,000m3 of OSB per year and is located in Sovetsky, a town in Russia’s Khanty-Mansi autonomous region.

In addition, Taleon Terra, one of Russia’s largest companies in the field of construction and architecture, plans to launch test production of OSB in the city of Torzhok in the Tver region by the end of the current year.

The volume of investments is estimated at 13bn rubles (US$300m). The new plant will create about 1,000 new jobs. It is planned that, in addition to supplying the domestic market, production of the new plant will also be exported.

Implementation of the project has had the personal oversight of Andrey Shevelev, the governor of the Tver region. He has listed the project as one of strategic importance to the region, mainly because of regional government plans for the development of modern housing in the region and for added-value wood processing. At present the Russian Upper Volga region (of which Tver is the largest city) is known for its large volumes of low-grade wood, processing of which requires the establishment of additional plant and capacities.

The majority of equipment for the enterprise will be supplied by the German company Dieffenbacher.

Successful implementation of these projects will allow a significant reduction in the volume of OSB imports into Russia. At present almost 25% of these imports come from Canada.

Among the largest importers of OSB to Russia in 2014 were Kronospan, Bolderaja and Louisiana-Pacific.

Finally, it is possible that a new OSB plant may soon be built in Ust-Ilimsk, a town in Russia’s Irkutsk region, located on the Angara River. According to Vladimir Tashkinov, mayor of the city, the authorities of the region have already started a search for investors in the building of the plant; the total volume of investment needed for the project is estimated at five billion rubles (US$120m).

According to Tashkinov, the opening of the factory will create about 1,200 new jobs and will create conditions for the building of economy housing.

Currently the Kalevala woodworking plant in Karelia, between Finland and the White Sea, remains the largest producer of OSB in Russia. In 2014 the volume of its OSB production reached 230,000m3.

The company plans to commission a second line for the production of OSB in the second half of the current year. This will increase the capacity of the plant to 500,000m3 of OSB per year.