Russia to Learn to Make Сardboard

Russia to Learn to Make Сardboard

Photo: https://programlesprom.ru/

European sanctions have complicated the work of the Russian pulp and paper industry but companies continue to implement investment programs and climate strategies.

Sanctions are no Reason to Look on Dark Side of Things

In the spring of 2022, the Russian timber and pulp and paper industries faced difficulties caused by restrictions on the supply of products from the West. The European Union introduced a ban on the import of certain types of pulp and paper products from Russia as part of the fifth package of sanctions, approved on April 8.

The entire group of wood products, uncoated kraft paper and kraftliner in rolls or sheets were blacklisted. The EU also banned the export of almost all types of paper, cardboard and pulp to Russia. In fact, trade in paper and cardboard between the countries has come to a halt.

However, it turned out that domestic producers were not only not upset, but also full of optimism. For example, Nizhny Novgorod Paper Mill will receive a loan of 1.5 billion rubles ($25.86 mln) for the production of paper for packaging. The Formabox enterprise for the production of corrugated cardboard and corrugated products was opened in the Vladimir region.

“Western sanctions had a favorable effect on the domestic packaging market. They freed some niches from competitors. If previously the sales issues were very serious, and some of the products were exported, today Russian enterprises more than satisfy the demand for packaging products. All different manufacturers, from confectionery to machine-building industry, buy it,” said Natalia Alekseeva, Formabox’s CEO.

Arkhangelsk Pulp and Paper Mill, where it is planned to modernize the paper-making machine № 6, the press part and the transport-packaging line of the pulp drying machine by the end of 2028, replace the energy infrastructure facilities (boiler units, turbines) and switch the energy sector from coal to gas.

Ilim Group plans not only to modernize the existing pulp mills in Bratsk and Ust-Ilimsk in the Irkutsk Region, but also to create a new pulp and paper mill with a capacity of 600,000 tons of cardboard per year. The project was launched in 2018, and the plan is to start production in the spring of 2022. However, the situation with the COVID-19 pandemic and the special military operation made adjustments, pushing it back to 2023.

Nizhny Novgorod Pulp and Paper Mill is Adding Capacity

The Volga Paper and Pulp Mill, based in Nizhny Novgorod, and the Russian Industrial Development Fund have entered into a loan agreement worth 1.5 billion rubles for the modernization of production facilities. Using the funds provided at a preferential rate of 1% per annum for seven years, the company will modernize production and start up paper-making machine (PMM) No. 6, which was stopped in 2015.

After modernization, PMM No. 6 will produce corrugated paper and testliner (multilayer pressed cardboard). The company plans to expand the line of packaging paper types that are in demand on the market, including for export.

Experts believe that these products will find consumers even in conditions of stagnation as the transition to renewable raw materials in packaging production has become widespread.

The launch of additional capacities will allow the Volga Paper Mill to increase its output by 140,000 tons of paper per year (almost half of its current capacity), creating 172 additional jobs. Previously, the mill was expected to be modernized by spring 2023, but now the investment project has been pushed back to 2024.

Yuri Lakhtikov, Chairman of the Board of Directors of RAO Bumprom, believes that the new volumes of Volga Paper Mill products will find buyers both in Russia and on the international market.

“In modern conditions logistics is complicated. There is a reorientation of supply chains from Europe to Asia and Africa. In the domestic market, demand for these products is not growing, as the economy itself stays on the same level.

Nevertheless, the market of containerized paper is the most stable in the Russian pulp and paper industry. It corresponds as much as possible to the global trend of transition to the production of packaging from renewable raw materials, the essence of which is the rejection of the production of packaging made of plastic, metal and glass and reorientation to packaging made of paper, cardboard and cellulose pulp. This applies to both transport and consumer packaging. Therefore, Volga Paper Mill's products will definitely be in demand,” he said.

Vladimir is Striving to Become Industry Leader

On August 2, 2022, the production of corrugated products and Kraft paper bags of the Formabox company was opened in Vladimir. About 4 billion rubles ($68.97 mln) were invested in the new production facility with an area of 12,000 square meters.

After reaching the designed capacity it is planned to produce not less than 140 million square meters of corrugated cardboard of different brands and profiles and up to 100 million pieces of Kraft paper bags, as well as sleeves and bobbins per year.

The company is going to take 50% of the Vladimir Region market and enter the regions located within a radius of 1,000 kilometers, according to Dmitry Karimov, operational director of Formabox. “The packaging market is growing from year to year. It is environmentally friendly, there is a constant demand for it, because there is a shift from plastic to cardboard packaging,” Karimov said.

However, the Vladimir Region’s government is not going to stop there. A cardboard plant with a capacity of 150,000 tons per year will be built in Gorokhovetsky District of Vladimir region by 2025, the amount of investment will be about 15 billion rubles ($258.63 mln.) It is planned to create 200 jobs at the enterprise.

“The Vladimir Region is just beginning to develop the pulp and paper industry but I believe that high-quality products from our region will be in demand and take a worthy place in the Russian market. The launch of cardboard production plants is not only new jobs, but also the establishment of industrial cooperation with food industry enterprises and other industries that use cardboard packaging for their products,” said Vladimir Region governor Alexander Avdeev.

All the suppliers of raw materials are Russian companies. Production will be non-waste, and it is decided to use recycled raw materials as well.

Waste Paper is Still Valuable raw Material

At this time, the Nizhny Novgorod Region is an example of a cyclical economy that allows us to drastically reduce the amount of waste from commodity production and reduce the environmental load.

A sort of cluster of cyclical paper production was formed here, in which everyone is involved – residents of the region, collectors, sorters and recyclers of waste paper.

“Waste paper has become a sought-after raw material with the growing demand for paper packaging for growing end markets,” said Denis Kondratyev, CEO of the analytical agency Center for System Solutions.

This is basically why the pulp and paper industry has taken the leading position in the Russian economy in terms of cyclicality. Now more than 60% of the paper and cardboard waste generated is involved in economic turnover. More than that only in metallurgy, where traditionally up to 80% of scrap is recycled annually from the total volume of generated recycled metal waste.

According to calculations of the Center for System Solutions now the country generates up to 8 million tons of waste paper and cardboard, of which about 7 million tons are suitable for processing, and only 4.5 million tons of waste paper is collected.

At the same time, production capacity is now enough (in addition to the remaining new ones built) for processing more than 5.5 million tons of waste paper per year, and within three years the producers plan to increase it by another 1.4 million tons.

The main problem is that although the collection and sorting chains for waste paper seem to be built, there are no effective production links.

“As a rule, regional waste handling providers do not consider the collection of recyclables as a business. It is only important to get a stream of utility payments from municipalities for them. This means that they are not interested in separate collection, which would create a mass of raw materials for the sorters. The latter, in turn, are not always able to give out the grade of waste paper that is needed to the nearest processor. The latter is not always flexible in its production processes,” said Kondratyev.

Without the economic interest of the parties and technological connections, it is impossible to create a profitable chain of recycling from these links. As a result, at least 2 million tons of waste paper now rots in landfills, and how much more of it lies in the barns of the population cannot be counted.

That is why environmental experts consider the experience of the Nizhny Novgorod Region to be a model, where public utilities, sorting companies and paper mills managed to find a symbiosis identical to the cyclical economy, beneficial for all parties.

For reference

In 2021, Russia was one of the world's top 20 exporters of paper and paperboard, and even ranked third in newsprint trade volume. Almost 90% of Russian enterprises plan not only to expand the range of packaging, but also to increase production volumes by 2024.

Production of pulp along with this could grow from 8.2 million tons in 2019 to 14 million tons by 2030, and paper and cardboard from 9.2 million to 11.8 million tons, respectively. The pulp and paper industry itself should increase its contribution to the country's economy by that time, and from 697 billion rubles in 2019 to 1.14 trillion rubles by 2030.

‘I Cleaned old Weapon Myself’: Prigozhin Tells Journalists how Wagner Group was Founded Island of Heroes