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. Last Updated: 07/27/2016

International Paper Upgrades Svetogorsk Plant




SVETOGORSK, Western Russia -- The world's leading paper manufacturer, International Paper, has opened a $35 million production line at its recently acquired plant in Svetogorsk, about 200 kilometers northwest of St. Petersburg.


International Paper Svetogorsk's new line specializes in standard A4 paper for both Russian and foreign markets. It will be packaged under the brand name Ballet, officials said.


"For six years now we've wanted to start something in Svetogorsk because we wanted a place in the Russian market," David Bailey, head of International Paper for Eastern Europe, said at the grand opening of the line last week.


"Our most important objective is to make world-class paper here in Russia," he said.


The plant, which employs 3,200 workers and is one of Russia's 10 largest in terms of production, also makes cellulose, food cartons and other forms of paper.


Government leaders attending the opening of the line praised International Paper for sinking funds into Russia despite the economic tumult.


"Today, we are seeing more investment being made in the economy of the Leningrad region," acting Leningrad Governor Valery Serdukov said. "We welcome International Paper's courage and pragmatism investing in Russia."


"International Paper has shown that despite the general belief that Russia is stricken by crisis, it is still possible to make investments in Russia," added Deputy Economics Minister Boris Masly.


International Paper in turn applauded the region's "forward policy-making" for paving the way for fresh investment. The region, under a law passed in 1997, offers one of Russia's most attractive tax holidays: New investments are free from most local taxes until the project breaks even.


"This investment in production came about due to the market opportunity, and because of the forward policy-making of the government of the Leningrad region in creating a favorable investment climate," said Robert Amen, general director of International Paper Europe.


The tax policy has helped the region win an influx of some $600 million in direct foreign investment over the past two years. In addition to International Paper, other major international players with production in the region include Philip Morris, which will soon complete a $335 million tobacco plant; Swedish company AssiDoman, which has invested about $50 million in a pulp and paper mill; and Caterpillar, the U.S.-based heavy-equipment giant, which is completing a $50 million plant.


Ford Motor Co. is also finalizing plans to begin work on a $150 million assembly plant.