Offer to the investor
Total project cost: 1.1 bln RUB
Capital planned to be raised: 400 mln RUB and above
Investment purposes: Organization of oriented strand board production from unmerchantable wood
Available investment options: any possible investment options will be considered
Internal rate of return (IRR): 38%
Planned payback period: 4 years including construction period
Krasnoyarsk Region is one of the most forest-abundant regions of Russia. The forest fund territory of the region covers 158.7 mln ha. The total stock of vegetation of 11.7 billion cubic meters constitutes 34% of the total stock of the Siberian Federal District and 14.2% of the overall Russian wood resources. Forest industry is one of the most profitable industry branches of Krasnoyarsk Region. Around 7 mln m3 of forest industry wastes are produced in the region every year. The wastes are accumulated in the south, close to the wood processing sites.
The market volume is consistently growing at CAGR of 24%. Though the general Russian demand for OSB is also growing, the first domestic production opened only eight years ago, concentrated in the European part of the country. There is no regional production in the potential markets of Siberian and Ural Federal Districts. The potential markets feature high OSB use potential (126 thousand m3 per year in the SFD, 88 thousand m3 per year in the UrFD), and the demand is growing at a stable high pace.
The project implies organization of oriented strand board production from unmerchantable wood to be used in construction, furniture production, package, logistics and decoration.
If the project is approved for implementation, the production site may be installed practically in any location in Krasnoyarsk Region but, from the raw material supply perspective, the most effective solution would be the territory in the nearest proximity to the wood processing facilities in the south of the region.
At the moment, the project is at the idea stage. The oriented strand board production flowchart has been developed, the main sources of raw materials have been assigned, the basic financial parameters and the product sales channels have been identified.
Depending on the sufficiency of the assets and finance owned by the investor, Yenisey Siberia Development Corporation may offer the best fitting project financing plan involving the governmental financial support options.
The project was developed by Strategy Partners group with the support of Sberbank.