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Metsä-Botnia's sawmill in Russia inaugurated

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7 June 2006


Metsä-Botnia, who is responsible for the pulp business of the Metsäliitto
Group, has built a modern sawmill in Russia, on the banks of the river Svir
near the town of Podporodzhye, approximately 300 kilometres east of St.
Petersburg. The sawmill, inaugurated on 7 June 2006, is operated by OOO Svir
Timber, a Russian subsidiary of Metsä-Botnia. The total investment amounted to
55 million euros, and the sawmill employs 130 persons. 

"The Svir Timber sawmill is an important part of Metsä-Botnia's fibre strategy.
The aim is to get experience from forest industry investments in Russia and to
create a basis for possible future investments", says Erkki Varis, President
and CEO, Metsä-Botnia. 

The main part of the personnel is Russian, in addition there are Finnish and
Estonian employees. The personnel has been trained at the owner companies,
Metsäliitto Group's and UPM-Kymmene's sawmills. Special attention was given to
work and fire safety and environment care. 

The Russian wood procurement organisations of the owner companies take care of
the wood procurement to the sawmill. In the future, wood is also obtained from
Svir Timber's own cutting rights. 

The yearly capacity of the sawmill is 200,000 cubic metres of dried sawn spruce
for building industry, distribution chains and further processing. The main
markets are Central Europe, Mediterranean, Great Britain, Japan, Finland and
Russia. 

"The production was started at the beginning of the year and the operations
have commenced well. At the moment the production level is 14,000 cubic metres
per month, which corresponds to about 75 percent of the nominal capacity. The
market situation is reasonably good at the moment", states Eero Smolander,
General Manager of the sawmill. 

The final investment decision was made in September 2004, whereafter an
investment agreement was signed with Leningrad Oblast. The main suppliers in
the project were the Finnish companies Lemcon, YIT, Heinolan Sahakoneet Oy,
Tekmawood Oy, Valon Kone Oy, Wärtsilä Biopower Oy, the Estonian company Hekotek
and the Russian companies Spetsstroimehanizatsiya and Lenenergo. 

Further information: Jukka Laitinen, Senior Vice President, Metsä-Botnia, tel.
+358 500 691927

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