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. Last Updated: 07/27/2016

Revolt Gives Ailing Mill a 2nd Chance

SOVIETSKAYA, Western Russia -- Workers at a paper factory in the Leningrad region are hoping to get the mill running again after they seized control of the plant from foreign management and got some help from state lawmakers.

Workers at the Vyborg Paper and Cellulose Mill, shut down since February when unpaid employees went on strike, are counting on the Aug. 10 registration of the plant as a public enterprise -- which gave them a 100 percent stake in the mill -- and promised tax aid from the parliament to put the factory back on its feet and start generating revenue.

The latest events -- particularly the parliament intervention and the altering of the factory's ownership -- have added a new wrinkle to a story not uncommon throughout Russia in the days following the privatization of former state-owned enterprises.

The saga began last year when Nimonor Investments Ltd., a little-known Cyprus-registered company, offered to bail out the debt-ridden plant, Alexander Vantorin, the 48-year-old director elected by the trade union during this year's strike, said in an interview last Friday.

Vyborg, located 140 kilometers northwest of St. Petersburg, controlled more than 60 percent of the regional market in candy wrappers, wrapping paper, toilet paper and other paper products in the late 1980s, he said. Even in 1993, the mill posted a turnover of $60 million.

But by 1997, Vyborg had fallen on hard times and owed $8.1 million in wage arrears and $83 million in federal tax debts, Vantorin said.

Then along came Nimonor, which through its Russian representative, British citizen Mark Rhodes, closed a deal on the factory and signed an agreement with the workers to keep all 2,100 jobs and pay off Vyborg's back wages and tax debt.

Despite strong financial assurances, further investigation would show that Nimonor was registered in Cyprus only three weeks before the sale of the factory, Vantorin said.

Rhodes was unavailable for comment when attempts were made to contact him.

After the deal, Vyborg workers say they began growing angry when wages still went unpaid, and the final straw came in February when management began to lay off employees.

Furious, they went on strike, joining forces with local villagers to lock Nimonor out of the factory. They then threatened to block the main highway running through Sovietskaya from Finland, the route used by international importers from northern Europe to Russia.

The outraged workers caught the attention of the parliament, which offered to help workers by providing funds to restructure the mill's $83 million tax debt.

Then on Aug. 10, Vyborg employees got the mill registered as a public enterprise.

Now, even though it is uncertain what role Nimonor will play in future operations, the national attention gained in the strike and the Duma's assistance has brightened the factory's future considerably, Vantorin said, adding he is determined to get production going again, perhaps as soon as this fall.