Finland's Ruukki to Make 2nd Bid for Mill

NEW YORK -- Ruukki Group Oyj, a Finnish wood supplier, said the company would make a second bid to develop a new mill in Russia after a prior proposal was rejected.

"If we're not able to finalize the overall agreements and priority-investor status by the end of this year, I'll be very disappointed," CEO Matti Vikkula said in an interview at the company's annual general meeting today.

The company is mainly considering sites for a new plant west of the Ural. A shortlist will be made in the second quarter, Vikkula said. Companies with operations here have approached Ruukki on possible joint ventures, he said.

Ruukki and Finnish papermakers Stora Enso Oyj and UPM-Kymmene Oyj are seeking footholds in Russia as new tariffs drive up the cost of wood imports. Ruukki, which raised 337 million euros ($533 million) in 2007 in a share sale, is seeking further funds to finance expansion. Vikkula said today he might sell homebuilding and healthcare assets in the first half.

"The only risk is the country, Russia," said Pierre Moncheur, who controls about 5 percent of Ruukki Group through his Geneva-based investment company. "The money is still here, and if something happens before it's invested, that's just a delay. Everyone is very confident."

The company elected board members from VTB Group, Russia's second-biggest lender, and Kermas Group, which owns Samancor Chrome. Samancor, is one of the world's two largest ferrochrome producers and has operations in Russia.

Finnish investor Ahti Vilppula currently controls about 17 percent of the company, including shares held by his Procomex investment group. JPMorgan Chase, VTB and Kermas each control 10 to 12 percent of the company.