MDF Plant Co-financed by EDB Launched in Tomsk

Tomsk, 16 December. Today, a medium-density fiber (MDF) board plant built by LPK Partner-Tomsk and co-financed by the EDB was officially opened. Experts forecast that after the plant achieves its designed capacity it will control about 25% of the Russian market and become one of the top three manufacturers in the MDF segment in Russia.

To implement this project, in 2008 the EDB arranged a syndicated loan which was structured jointly with Nomos-Bank of Moscow using leasing and direct debt financing schemes and the services of the export credit agency Hermes (Germany).

“To date, investments in this project total about $250 million, including $90 million provided by the EDB in a ten-year loan – our Bank financed construction of the facility and purchase of equipment”, said Gennady Zhuzhlev, Deputy Chairman of the EDB Executive Board. “Due to EDB’s financial resources, despite the global financial crisis, the borrower is granted long grace periods in respect of both the principal and interest of all the credit products provided under the project. Repayment will be commenced after the facility reaches its design capacity”.

The Tomsk plant will fabricate medium-density fiber boards, the main material for furniture and finishing work in construction. It will achieve its design capacity of 264,000 m3 of MDF boards a year in the first half of 2011, employing 850 people by that time.

Experts estimate Russia’s demand for MDF boards at 1.2 billion m3 a year. Of this figure, 20-25% is being imported, and the Tomsk plant intends to take on this niche. The company will first enter the markets of Siberia, the Ural region, Central Russia and Kazakhstan and commence export to Uzbekistan and Iran.