RusForest reports startup of Russian pellet mill

By Erin Voegele | February 24, 2016

On Feb. 22, Sweden-based RusForest released preliminary fourth quarter results, announcing its 30,000-ton-per-year pellet mill in in Magistralny, Russia, began operations during the final quarter of last year.

According to the RusForest, the facility is gradually ramping up production, with 1,847 metric tons of pellet produced during the fourth quarter. The company also indicated 1,772 metric tons of wood pellets were sold from the Magistralny pellet plant during the three-month quarter.

“RusForest finished the year on a strong note in terms of production, with increased sawmilling and harvesting in Q4 2015 compared with the same period in 2014,” said the company in a statement. “Both the new pellet mill in Magistralny and the new harvesting operations in Ust-Ilimsk were launched in Q4 2015 and are working to gradually ramp up production. At the same time all of our sawnwood markets except for Japan were very challenging in Q4 2015, with a year-on-year decline in average price received as a consequence. Price visibility further into 2016 for all markets remains difficult. The Russian rouble continues to be weak, however, domestic prices are slowly catching up to the new currency environment through increased price inflation, especially in imported equipment and materials.”

As of the end of the year, RusForest had an unaudited cash balance of approximately $8.4 million, of which approximately $4.9 million was held at the corporate level and included restricted cash balances in the amount of $200,000, connected to the synthetic buyback program. The company also indicated it had corporate debt of approximately $100,000 from zero coupon bonds denominated in SEK and maturing in May 2018.