OREANDA-NEWS. April 15, 2011. Positive profitability of a pellet mill in Russia is impossible with existing raw timber prices, as RusForest’s CEO Martin Hermansson said at Russian Forest Products 2011 conference held by Adam Smith Conferences in Moscow.

According to Hermansson, producing one ton of pellets requires 2,500 cubic meters of raw wood. ‘If we take Segezha pulpmill for instance, wood costs not less than Eur 30 per cubic meter, while one ton of pellets in Europe sells at Eur 110-120. So, production cost is much higher than market product price’.

‘A new pellet mill in Norway does not work. A mill in Vyborg will soon be launched, but there is no raw wood at prices needed for at least zero profitability’, Hermansson concluded.