Finnish forest industry group UPM and Russian SVEZA have signed a letter of intent to form a joint venture company, and to make a final investment decision after finalising the feasibility study on a state-of-the-art forest industry facility in the Vologda region of Northwest Russia. Each party would hold 50 percent of the joint venture's share capital.

The planned industrial complex includes a modern pulp mill, a sawmill and an OSB building panels mill in the community of Sheksna, in the southern part of Vologda. The planned capacity of the pulp mill would be 800,000 metric tonnes, the sawmill 300,000 cubic meters and the OSB mill 450,000 cubic meters.

The total investment in the facilities would exceed EUR 1.0 billion. When fully operational, the new Sheksna mills would employ approximately 650 persons, while the indirect employment benefit in the region would total thousands of jobs.

Sheksna is located in the southern part of Vologda, a region of abundant forest resources. The Vologda forests have a growing stock of close to one billion cubic meters of sustainable capacity. Sheksna enjoys good logistics, with access to the Volga-Baltic waterway and the northern railroad extending from St.Petersburg to Perm. The products of the Sheksna mills would be mainly intended for domestic Russian markets.