RusForest AB, a Swedish forestry company with operations in Russia, has engaged AS Hekotek, a mechanical engineering company, to build a wood pellet production facility at the Company’s Magistralny sawmill in Eastern Siberia.
RusForest has signed a contract with Hekotek for delivery of equipment to construct a wood pellet plant with an annual capacity of 30,000 tons at the Company’s Magistralny sawmill in Eastern Siberia.
The new pellet plant will ensure utilization of all sawmill residuals and improve the long-term profitability of RusForest’s Magistralny unit. The Company plans to produce premium pellets for the European and South Korean markets.
The total investment is estimated to be approximately EUR 4.4 million before value added tax (“VAT”). Completion and launch of the new pellet plant is expected by the end of 2015.