Russia’s Sberbank Ready to Invest in P&P Mill Modernizations and Conversions

Sberbank, a major Russian state lender, plans to invest in new pulp and paper projects as well as in the modernization of existing enterprises, the bank’s managing director of corporate business development Alla Sbitneva said during the Russian PAP-FOR Business Forum taking place virtually in late November.

Sperbank sees no shortage of possible projects, as many mills are still operating on a foundation dating back to the Soviet period and require modernization. In addition, producers of newsprint in particular are looking to convert their production and manufacture paper grades with better demand prospects, as the graphic paper industry is registering declines of six to seven percent annually, Sbitneva said.

Illustrating this point, the general director of Mondi’s Syktyvkar mill, Klaus Peller, said during the forum that the mill plans to increase packaging paper output to up to 60 percent of its total product mix, while lowering the amount of graphic paper output to some 40 percent of the total.

When selecting the projects to help finance, Sberbank will evaluate factors including the balance of supply and demand in a given market as well as raw material availability. However, the P&P industry is very capital intensive, and companies should have a clear strategy and some funds of their own with which to finance such projects, according to Sbitneva.

PPI Europe reported earlier that Sberbank has a project pipeline for the P&P sector amounting to some Rouble 600 billion ($7.8 billion) which it is reviewing.

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