Russian Sveza Group to acquire Tyumen plywood plant

Sveza has already signed an agreement to acquire 100% of the business of the Tyumen Plywood Plant with its owner Almira Karimova, Sveza said in a statement. Tyumen plant produces large-format birch plywood, which is used in construction, engineering, aircraft building and shipbuilding. The deal should be approved by the Federal Antimonopoly Service of the Russian Federation, where Sveza filed a request.

Sveza continues to strengthen its leading position in plywood production in Russia and in the world. After the acquisition of the Tyumen plant, the share of Sveza in the Russian plywood production (3.76 million m3 in 2016) will grow to 36.5%. In 2016, the Tyumen Plywood Plant produced 82.4 thousand m3 of plywood. The production of the Sveza in 2016 amounted to 1288.6 thousand m3 of plywood. Sveza reports that "in the coming years" intends to increase plywood production at the Tyumen plant to 120 thousand m3.

Photo: Sveza Novator plywood production (Vologda Region, Russia)

Plywood production in Russia has been growing for the seventh year in a row and since 2004 it has grown by 69.3%. Plywood is the most exported product among wood panels, in 2016, exports from Russia amounted to 2.5 million m3. More than 90% of this volume is polished and laminated birch plywood, the rest is practically in equal shares - LVL and coniferous plywood. In January-September 2017, the volume of plywood supplies abroad, according to the Federal Customs Service, was 1.6 million m3 (-0.8%).

Russia has extensive resources of birch logs, which gives a natural advantage to local producers of plywood. The fall in the exchange rate of the Russian ruble against the US dollar at the end of 2014 increased the competitiveness of Russian plywood producers. High demand for birch plywood is observed in Europe and the U.S. At the same time, demand in Russia is constrained by weak economy of the country, as well as the growing substitution by the OSB. The main export destinations for Russian plywood are Egypt, the U.S. and Germany. According to Poyry, in 2020, plywood production will grow to 4.2 million m3 per year.