Lesopromyshlenniki there are on IPOthis year at once two large Russian timber industry companies have declared intention to spend primary public placing of actions. It testifies not only about desire lesopromyshlennikov to involve money for business development, but also about readiness to share management with more skilled foreign companies. For the Russian wood business this phenomenon more than unusual.
the historical background
Any timber industry company did not leave till now on public placing of actions. And the investment companies which are engaged in the analysis of a timber industry complex from the point of view of its investment appeal, in Russia it is not enough. Experts of the market connect it that from - for widespread in wood sector of corporate wars and captures till now to speak about IPO it was impossible. However now process of consolidation of the enterprises of branch in large holdings is included into a maturity. Fears of principal shareholders concerning possible loss of control over the companies gradually are forced out by necessity of carrying out of public placings. The Russian companies are involved with a favorable conjuncture in stock market, possibility to receive more objective market estimation of business and to involve in the company larger sums of money in comparison with crediting or release of debt securities. Many Russian enterprises already had time to estimate advantages of carrying out IPO. Now them want to join and lesopromyshlenniki.
In concern “ Ylym Palp “ speak about exit plans on IPO many years. Three years ago primary placing of actions on Nju - Jorksky stock exchange was planned to carry out in 2004 - 2005. For this purpose the company has started to prepare the reporting under the international standards, literally one of these days have been consolidated in the separate company of Open Society “ Kotlas TSBK “ Open Society “ TSelljulozno - cardboard industrial complex “ Open Society “ Bratsk kompleksholding “ and Open Society “ ON ` Ust - the Ylym timber industry complex ` “. At first sight it should testify to desire of the company to spend IPO, however in August, 2006 the chairman of board of directors of company Zahar Smushkin has declared that the company still chooses between IPO and attraction of the strategic investor.
“ the corporation considers various variants of development and attraction of investments for realisation of the scale investment program. Variants as attraction of strategic investors in various directions of business, and carrying out of public loans are considered. The decision will be accepted in the near future. From IPO the company has not refused “ - has explained the director for the information and public relations “ Ylym Palp “ Elena Konnova. However, under the informal data, now attraction of the western strategic investor seems to a management of group of the enterprises of more interesting prospect. Anna Krylov, an analyst of timber industry branch of the company “ Antanta - the capital “ (recently conducted branch research), remembers that hearings that the strategic partner " recently went; Ylym Palp “ there can be concern International Paper. Officially in the company this information do not confirm.
group Mondi Business Paper, the owner “ Mondi Biznes Pejpa Syktyvkarsky LPK “ has more accurately defined the intentions. “ the decision about IPO is accepted, most likely, already definitively “ - tells a source close to the company. The group does not give comments on a current stage of preparation and on the plans, however in this case refusal of comments testifies about “ the silence period “ Which, according to rules of London stock exchange LSE, the company during the certain period before primary placing of actions should observe. Placing should occur till the end of the year.
what for to foresters IPO?
“ Ylym Palp “ explains necessity of attraction of the western money the scale investment program assuming increase of capacities on manufacture of cellulose and a cardboard at the existing enterprises in Siberia (almost to 1 million tons a year on everyone) and modernisation of the equipment for improvement of quality of production. The total sum of expenses should make about $700 million till 2011.
Elena Konnova explains attraction of foreign means necessity of scale complex modernisation of manufactures: “ Credits cannot be the basic source of investments, in view of relevancy of their necessary volume “. Besides, as consider in the companies, other ways - an exit on the public markets of the capital and attraction of the strategic investor, unlike credits, in itself are capable to provide the further growth of cost of the company. Public placing, as a rule, is accompanied by growth of a transparency of the company and corporate governance level that finally leads to increase in its cost.
if to speak about planned IPO groups Mondi, that, according to a number of experts, it only a part of actions passing now on re-structuring of mining corporation Anglo American which belongs now Mondi. In the summer in a number of the western mass-media there passed the information on basic refusal Anglo American from sale of the bumazhno - packing business to strategic investors - probably, in the mining company have considered that can involve more means by means of open placing, having given, thus, a small package portfelnym to holders and having reserved a management of the company.
with opinion that “ Ylym Palp “ and “ Mondi Biznes Pejpa Syktyvkarsky LPK “ involve money abroad under the big investment projects or want refinansirovat thus current debts under credits, it agree both the director for economy and Open Society finance “ Arkhangelsk TSBK “ Dmitry Zylev. He asserts that if the company international attraction of means in the West positively affects a credit history.
Anna Krylov considers that a basic difference between plans “ Ylym Palp “ On primary placing and attraction of the strategic investor is not present: “ In a case with this company attraction of the strategic investor, most likely, in any way does not contradict idea of attraction of means by means of IPO “. As the analyst believes, can quite be that the concern at first will involve the strategic investor who will incur management, will make the company of more transparent and will deduce it on new level of cost.
and here at “ Mondi Biznes Pejpa “ a situation another. According to Anna Krylovoj, Syktyvkar LPK the strategic investor is not necessary, “ and monetary resources on the further development are simply necessary. To speak about desire to transfer a management part here it is not absolutely correct - more likely placing of actions will cause its dispersion because in IPO investors who want to earn on increase of cost of the company usually participate, instead of to operate it “.
Nevertheless, despite all benefits which are promised to the companies by an exit on public level, experts doubt that large Russian lesopromyshlenniki will rush to place actions at the London stock exchange.
according to analysts, besides “ Mondi “ and “ Ylym Palp “ IPO it is represented perspective for Open Society “ Arkhangelsk TSBK “. But in most TSBK possibility of carrying out IPO deny. “ really, the fashion on IPO now exists - many companies go west behind rather cheap money though it is possible to involve them and in Russia, - Dmitry Zylev speaks. - Ways of attraction of long money Russian tselljulozno - the weight exists the paper enterprises and if to compare them with IPO at cost they are approximately identical. Our enterprise does not intend to spend yet IPO, and as to plans of the further development - we intend to invest in manufacture till 2017 more than $300 million Partly it will be our own means, partly - extra “.
As Anna Krylov considers, now for the Russian companies to involve means through IPO sense there is no it is expensive, risky and difficult. Wood sector in the country opaque, from - for it in company cost at placing of actions very big risks so, it will be enough low will be put. Such placing of actions will be favourable only when legislative obstacles for development of this business will be abolished.
analysts consider that today for the Russian wood companies it is better to involve foreign strategic investors, after all at an enterprise share issue in the open reference there is a risk that they are bought up by interested raiders. And oppositions in this business it is a lot of - to remember only topical examples about attack on TSBK “ Volga “ and Arkhangelsk TSBK from Oleg Deripaska`s structures (the company “ Kontinental Management “) . This business is very interesting to foreign strategic investors: Russia loses to the developed countries on technologies, but wins on expenses for work and raw materials.
the credit for purchase of the foreign equipment with a covering of the western agency when the transaction on equipment purchase is made by means of the Russian bank which involves money of the foreign financial organisation in crediting of the concrete project can be one more alternative IPO, according to Dmitry Zyleva, for the wood companies. There is an offer of money from the Russian banks, there are foreign banks which offer credits to the enterprises, but they usually do not have experience in Russia, and here there are complexities. Anna Krylov considering with most actual for the timber industry companies bonded loans and credits agrees with it also. They help to receive necessary means, but, unlike other ways, exclude today risk of absorption by unfriendly structures.
the largest investments of 2006 in LPK
Stora Enso (Finland) will construct in Russia the third factory on packing manufacture, project cost will make ˆ54 million Factory will be located in Lukhovitsy (Moscow Region). Capacity of the enterprise - 150 million in sq. m of the goffered cardboard.
“ Tetra Pak “ will construct in Moscow Region factory on packing manufacture. The new factory becomes one of the largest in Russia and the CIS of manufactures of packing materials for liquid foodstuff. The total sum of investments will make ˆ100 million
Foreign trade and investment bank and Open Society “ Corporation of development of Krasnoyarsk region “ have signed the agreement on the joint organisation of financing and attraction of investments into building TSBK in Boguchansky area of Krasnoyarsk region. It is supposed that the volume of the investments necessary for building TSBK, will make $0,8 - 1 billion
the Company “ Omnipak “ (Moscow) and administration of the Tver region have signed the investment contract on building in region of the enterprise for manufacture of cardboard packing for milk and juice in cost more than 400 million rbl. Start of the first stage of the enterprise is planned in August - September, 2007. A factory turn Company Georgia will make 1 mlrd rbl.
- Pacific Nordic (USA) the factory on manufacture of hygienic paper Lotus in cost more ˆ will construct in the Tver region 300 million Project assumes four turns of building on the area more than 70 hectares which will come to the end by 2018.
on the basis of Open Society “ Altajkrovlja “ (Altay territory) the enterprise for manufacture sanitary - hygienic products by capacity of 25 tons a day will be started. As initial raw materials of a new industrial line the paper for recycling, and bleached cellulose will be used not.
on Open Society “ Nemansky TSBK “ (Kaliningrad region) works on building of cellulose manufacture are finished. After input of new manufacture the industrial complex becomes the enterprise first in Russia which have passed to technology TCF - otbelki. Capacity of industrial complex will make an order of 120 thousand tons of bleached cellulose in a year. Total expenses for the project make more ˆ30 million
On Open Society “ Ust - Ylym LPK “ (“ Ylym Palp “) It is finished “ the Project - 630 “ - the first stage of modernisation of manufacture of the enterprise. Which volume of investments is estimated in $45 million
the Source: “ Lesprom indastri consulting “.
Analysts consider that today for the Russian wood companies it is more safe to involve foreign strategic investors, after all at an enterprise share issue in the open reference there is a risk that they are bought up by interested raiders
“ Ylym Palp “ the first among the timber industry companies has decided to leave on public placing of actions
Minpromenergo stimulates investments in LPK
the industry and power Ministry has directed in August, 2006 to the government of the Russian Federation the project of a series of measures co-ordinated with profile departments on increase of competitiveness of the domestic wood industry. Project substantive provisions have been considered during joint board RSPP and Minpromenergo in July of current year.
Following the results of board the minister of the industry and power Victor Khristenko has noticed that all presented materials will be finished, “ to fix the plan of action, a road map for the nearest period of time. We with pleasure will continue work in such format and on a wood complex, and on other branches “. Head RSPP Alexander Shokhin has underlined that the board has opened “ a new series of interaction of the state and business in the form of joint development of branch strategy in key sectors of the Russian economy “.
In Minpromenergo consider that a priority direction of development of a timber industry complex is stimulation of deep processing of wood on territories of Russia, reduction of dependence on import of finished goods and reduction of a share of raw wood in export lesobumazhnoj production.
Besides, the project of a series of measures prepared on the instructions of the president provides creation of favorable conditions for investments in lesopererabotku on the basis of the investment agreements focused on long-term strategic partnership in wood sector. And also stimulation of wooden housing construction, including development of manufacture wooden kleenyh designs, manufacture expansion lesozagotovitelnyh cars, development of an infrastructure with a view of development of new large forests, stimulation of application of energy carriers of a wood origin as alternative sources of fuel for municipal power. Also maintenance of consecutive decrease in rates of the export customs duties is planned for production of deep processing of wood and their stage-by-stage increase at separate kinds of round forest products, cancellation of rates on the hi-tech equipment for wood processing, accessories and spare parts for the cars which industrial production is supposed to be organised in Russia.
we will notice that today real lesozagotovitelnaja activity is conducted on 24 % of the areas of all wood fund. The others of 76 % do not get to a zone lesozagotovitelnoj activity from - for limited access. For example, in Siberia at correct lesopolzovanii it is possible to prepare 56 million cubic metre of wood a year without damage to the nature while in practice it is prepared hardly more 20 million cubic metre. As to timber cutting now on one worker in a year 500 cubic metre a year are necessary, and in the next Finland this figure reaches 6 - 7 thousand cubic metre. Settlement lesoseka the countries makes 800 million cubic metre, thus in a zone of transport availability are only 250 - 280 million cubic metre. In total LPTo occupies 4 % in total amount of manufacture of the Russian Federation.