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PACKAGING BOARDS CORRUGATED BOARD BUSINESS IN RUSSIA<br />
Generating successful business in Russia<br />
<strong>Stora</strong> <strong>Enso</strong>’s corrugated board business in Russia is experiencing good growth. Demand for consumer goods<br />
and transport- and consumer-related packaging is increasing strongly, and the Group has made preliminary<br />
plans to expand its business in Russia on the back of this development. Despite growing competition,<br />
<strong>Stora</strong> <strong>Enso</strong> remains the market leader in corrugated packaging board in the Moscow region.<br />
<strong>Stora</strong> <strong>Enso</strong> has two corrugated packaging<br />
plants in Russia: the Balabanovo<br />
plant, located some 100 kilometres<br />
south-west of Moscow, and the<br />
Arzamas plant, around 400 kilometres<br />
east of Moscow. Both units produce the<br />
same grades, although Arzamas specialises<br />
in larger packaging. The two plants<br />
produced a total of 215 million m² of<br />
corrugated packaging board during 2005,<br />
and had 450 employees.<br />
Close to the market<br />
The majority of <strong>Stora</strong> <strong>Enso</strong>’s corrugated<br />
board output in Russia is sold to customers<br />
based in the Moscow region. The<br />
Balabanovo plant also sells products elsewhere<br />
in European Russia, such as the<br />
St. Petersburg area, while the Arzamas<br />
plant sells to customers in the Nizhni<br />
Novgorod and Volga regions. As corrugated<br />
board is normally not transported<br />
long distances, production needs to be<br />
located close to where the board is used.<br />
Some 70 % of sales in Russia come from<br />
customers in the food, beverage, and cigarette<br />
industries, representing both international<br />
and Russian brands.<br />
The secret of our success<br />
“Our strengths in Russia are well-trained<br />
Russian personnel, effi cient processes,<br />
and modern production facilities,” says<br />
Veli-Jussi Potka, Senior Vice President,<br />
Industrial Packaging. “We also offer our<br />
customers short delivery times, product<br />
innovations, and high quality.”<br />
Entering the Russian market<br />
<strong>Stora</strong> <strong>Enso</strong> decided to build its fi rst corrugated<br />
board plant in Russia at the end of<br />
the 1990s. Due to the relatively low initial<br />
investment involved, the risk of<br />
entering the market was seen as limited.<br />
The decision was also infl uenced by the<br />
fact that growth opportunities in the<br />
corrugated packaging market in Finland<br />
and Sweden had levelled off, and the<br />
Group had already experienced successful<br />
expansion in the Baltic countries.<br />
The fi rst corrugated board plant started<br />
operations in Balabanovo in 1998,<br />
and was followed by the Arzamas plant<br />
in 2004. Both plants have been expanded<br />
since the initial investment. Continued<br />
growth in the corrugated board business<br />
has led to further investments in<br />
other Central and Eastern European<br />
countries, such as Hungary and Poland.<br />
Future plans<br />
The Russian market is growing by an<br />
average of 8 % a year, and the Moscow<br />
region is expanding even faster. As the<br />
demand for high-quality packaging is<br />
continuing to rise, the Group is exploring<br />
additional growth opportunities in<br />
the corrugated packaging business<br />
in Russia. •<br />
Demand for consumer packaging is increasing strongly in Russia. <strong>Stora</strong> <strong>Enso</strong> is the market leader in corrugated packaging board in the<br />
Moscow region.<br />
STORA ENSO COMPANY 2005• 23
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