As part of a major investement programme, Segezha Packaging has announced the start of construction of a new sack production plant in Saransk in Central Russia with a capacity of up to 400 million sacks per year. The total investment of the project will be almost 21 million euros, and the project is estimated to create 300 additional jobs.

The focus of the new plant will be sacks for the building industry. Production facilities for the manufacture of 100 million sacks of cement and other building materials will start in May 2008. The plant will be equipped with three production lines and a pre-printer from Windmöller & Hölscher.

Star location in ”the cement belt” of Russia and CIS
“The location of the plant was not chosen by chance,” says Daniel Matyukhin, general manager of Segezha Packaging for CIS. “The new operations will be situated in the very heart of “the cement belt” of Russia and CIS. The production site will be located in Saransk, which is 500KM South-East of Moscow. All necessary infrastructure is right here: heat and power supplies, local railways and good roads, water, gas supply and communications, and the production and management complex is in good condition. Proximity to key customers combined with the well-developed infrastructure makes Saransk the perfect location in compliance with our comprehensive expansion plans.”
The investment project is supported by the Government of the Republic of Mordovia.

According to Peter Buckley, CEO, Segezha Packaging Group, “this investment is further evidence of our company’s strong intention to build on our position as one of the key players in the global paper sack industry. This investment also consolidates our position as the market leader in the key Russian and CIS markets.”

Background information
Segezha Packaging is part of the major Russian forestry holding Investlesprom Holding – a group, which includes a range of forestry, wood processing and pulp & paper operations. Investlesprom is the world's second largest manufacturer of industrial paper sacks. It produces about 1.3 billion paper sacks annually in high-quality production facilities in ten countries, across Europe and Russia, and employs a total of 1500 people.

In mid September this year Segezha Packaging entered into an agreement to acquire the Turkish cement sack operations of Isiklar Ambalaj, with 2 sack plants in Turkey and a combined production capacity of 300M paper sacks per annum. The transaction will be finalized before the end of November 2007.