Segezha Group launches pellet production facility in Sokol

Segezha Group, a leading Russian vertically integrated holding company in the forest industry performing a full cycle of operations from logging to advanced wood processing (MOEX: SGZH) and part of Sistema PJSFC, is continuing the construction of a pellet production facility to turn by-products and wood waste into biofuel pellets at its Sokol Woodworking Plant. The new facility will produce 65 thousand tons of pellets annually and has received around RUB 1 billion in investment.

The production site is currently being fitted with essential equipment supplied by Hekotek, an Estonian company. The buildings’ foundations are in the final stages of construction, with electrical and sewage pipes being laid and the facility’s structure starting to be erected.

Dmitry Rudenko, Segezha Group Vice President: “Once operational, this new facility will make our site fully circular. Pellets come from deep wood processing, and are currently experiencing high demand on the global market. Once up and running, the new production line will improve product margins and help us produce a greater volume of eco-friendly products, which, in turn, will make Sokol Woodworking Plant one of the “greenest” manufacturing enterprises in Russia.”

The new facility is expected to launch this fall, with all products from the new manufacturing line fully compliant with international standards. The manufacturing process is fully automated.

Segezha Group’s only other facility for manufacturing pellets is Lesosibirsk Sawmill No.1., with an annual capacity of ca. 111 ths t. Its products are fully compliant with demanding European standards such as SBP and ENPlus A1. These pellets are made from the by-products of softwood sawn timber production, that is – sawdust and a small amount of wood chips. The fuel pellets are sold onto Russian and European consumers, and are used in automated boiler rooms that provide central heating to public buildings and private homes. Once the Sokol facility is operational, the Group’s total production capacity will increase to ca. 176 ths t per annum.

Biofuel is an important pillar of Segezha Group’s environmental protection policy. Fuel pellets are manufactured using high pressure and no chemical adhesives. They represent an environmentally friendly renewable resource, and while their calorific value is comparable to that of coal, fuel pellets emit a significantly lower volume of sulfur compounds. Making the switch to biofuel in our boiler rooms reduces greenhouse gas emissions and provides a clear environmental benefit.