Pavlovsk is a rural locality in the Russian Altai Krai and Altailes' new project will specialise in the production of MDF and HDF, creating one of Russia's largest MDF mills.

These plans have been recently confirmed by the Altailes company and some senior officials of the Russian Ministry of Industry and Trade. The new plant will be known as Pavlovsk DLC.

Ivan Klyuchnikov, CEO of Altailes, said that the company plans to focus on development in the domestic MDF market, due its “structuring in different directions, and the existence of unfilled niches".

According to Mr Klyuchnikov, Altailes intends to produce a high-density board, as well as some kinds of thin boards, which would be specially designed for Asian markets. These products, according to Mr Klyuchnikov, radically differ from those produced for the European market. The CEO also added that MDF produced in European formats is not currently competitive in Asian markets.

According to Altailes, the majority of the future production of the plant will be supplied to the Asia Pacific states and the Siberian market of Russia and will compete with imports from China and the EU region.

Part of the production will also be supplied to the markets of former Soviet states. The plant covers an area of 54ha, while the workshops alone will cover more than 30,000m2. The plant will produce E1 emissions class panels.

Construction of the plant began in March 2017 and is expected to be finished by September, 2018. The new plant will have the capacity to produce 250,000m3 of MDF and HDF, while the volume of investment in its building is estimated at seven billion rubles (US$100m).

The new combine will produce boards of three dimensions (2440x1220mm, 2440x1830mm and 2620x2070mm), with thicknesses ranging from 2.5 to 40 mm.

Altailes hopes for a stable demand for its products in the Russian market. An official spokesman for the company said the biggest market demand is currently seen for boards with thicknesses of 10-30mm, which are mostly used in the production of furniture.

With regard to raw material, the new plant will process a large volume of wood residues which have no commercial value.

Dmitry Loginov, commercial director of Altailes, commented: “The new plant will process low-quality wood, as well as wood residues from logging. To date, this raw material has not been processed, however its existence creates a serious problem for the region, in terms of fire safety. Large volumes of wood residues clutter forests and increase fire danger. In addition to wood residues, the plant will also use chips and sawdust as raw material for its production”.

To date, almost 90% of construction work has already been completed. This involved building three of the four blocks of the main workshop. Building of the fourth block is currently under way. According to Altailes, it will house the system for grinding chips and the resin production department. The new combine is equipped with a powerful central power unit which will generate thermal energy. It will also use chips, sawdust and felling residues as fuel for its operations.

The company is currently finishing installation of press equipment and foundations for the chip processing line. Mr Loginov believes that Pavlovsk DLC will be a unique enterprise for the entire Altai Territory, which will provide impetus for the development of related industries such as furniture, floor coverings, doors, etc.

The new project has already received support from the authorities of the Altai Territory. An official spokesman for Viktor Tomenko, the governor of the Altai Territory, said the commissioning of the new facility will almost fully meet the demand for MDF in the Russian Siberian Territory and will replace imports from the EU and China.

Mr Tomenko’s spokesman also added that all the raw materials and other components for the new production, except major production equipment, will be sourced locally.

At the same time, machinery for the new plant is being supplied from the EU. To date, Altailes has already signed a contract with the Belgian Sicoplan and German Holtec, which will supply the entire processing line, including the chip transportation line, for the new plant.

For Holtec, this is already the third major project jointly implemented with Altailes. In the past, it supplied equipment for the requirements of two sawmills owned by Altailes.

The continuous hot press and forming line is to be supplied by Siempelkamp of Germany. During the second stage of the project, laminated boards will be launched.

The authorities of the Altai region believe that implementation of this project will have strategic importance for the entire region, as it will result in the final creation of a “closed cycle of timber processing in the region and in Russian Siberia – from lumber to the production of high value-added products.

The payback period for the project is estimated to be 15 years. The new plant will create more than 200 new jobs in the initial phase, while during the second phase of the project, the number of jobs will grow "significantly".

Future production of the plant will be marketed under the ‘Altaidecor’ brand name. Currently, Altailes remains one of the largest woodworking enterprises in Russia.

It unites 15 enterprises, which specialise in lumber (annual volume of 1.4 million m3) and further wood processing. Financial results of the enterprise have not been disclosed. Pavlovsk DLC has already received the first orders for its products from Russia, Kazakhstan, and Iran.

Currently, there are two MDF enterprises in Russian Siberia, both of which are located in the neighbouring Tomsk region. One of them is the Latat plant (with a capacity 264,000m3) and the other is the Asinovsky timber industry complex (200,000m3), which is operated by the Chinese corporation AVIC-Forestry Co Ltd.

In the meantime, an official spokesman for Denis Manturov, the Russian Minister of Industry and Trade, who is directly responsible for the development of the panel industry in the Russian government, said the new project could be very promising for its investors.

According to Mr Manturov’s spokesman, with the launch of the Pavlovsky plant, the domestic MDF market will be close to saturation, while the share of the Siberian region in it could rise from 27% in 2012 to 50%. According to Mr Manturov, last year the production of MDF in Russia amounted to about 1,7 million m3, with the total design capacities of the industry of being around 2.5 million m3