OREANDA-NEWS. April 25, 2014. RusForest AB announces the first shipment of wood pellets from the Company’s new pellet mill in Arkhangelsk, Russia. RusForest recently shipped more than 6,000 tons of wood pellets produced at the Company’s LDK-3 pellet mill in Arkhangelsk.

The pellets are expected to be used as fuel for a European coal-fired power plant. The pellet mill passed the production testing phase successfully and is now running at full capacity of 100,000 tons per year, as the company said in the press release received by Lesprom Network.

The initial production from the pellet mill will be shipped to the European industrial market on a monthly basis. Due to the high-quality wood chips and sawdust used for pellet production, the Company expects to be able to sell pellets at a higher value in the future to European municipal and home heating markets.

Matti Lehtipuu, the Company’s Group CEO, commented, “The start of pellet sales is a turning point for our Arkhangelsk operations and gives us an opportunity to achieve positive EBITDA in the local business unit. There is strong demand for pellets in Europe, and we look forward to providing an alternative bioenergy source for European consumers.”

Total investment for the pellet plant was approximately Euro 12 million, including value added tax (“VAT”), with approximately 70% financed by local bank facilities.

RusForest is a Swedish forestry company operating in Eastern Siberia and the Arkhangelsk region of Russia. The Company controls long-term timber leases and utilizes these resources to produce a wide range of sawnwood products and wood pellets.