Ilim Group provides update on USD 1 Billion strategic investment projects at Pulp Mills in Russia

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Ilim Group said that its CEO Kseniia Sosnina and Senior Vice Presidents have visited the Bratsk and Ust-Ilimsk Mills in Russia. The key focus of the visits is the delivery progress of the strategic investment projects envisaged in the Company’s Business Plan, with a value of USD 1 billion.

Bratsk Mill

By the end of 2021, the Bratsk Mill of Ilim Group will have implemented a number of strategic projects with a total value of USD 700 million, including the KLB Line rebuild and pulp line upgrade. The KLB Line Rebuild will be completed by September 2019 to deliver 135,000 incremental tons of products per year.

HW Line Rebuild will be completed in November 2020, which will increase pulp output by additional 173,000 tons per year. Thus, by 2021, the total production output of the Bratsk Mill will reach 1.5 mln tons per year. The Bratsk Mill will account for 50% of the national pulp production volumes.

As part of Kseniia Sosnina’s visit, capital project managers updated the CEO on the project delivery progress. Installation of foundations is currently in progress for the Caustic Plant Rebuild project which aims to increase the plant capacity to support incremental volumes.

Another additional project within the framework of the large-scale upgrade is the extension of the finished products warehouse to store KLB inventory, which will be created so that the clients will not experience supply problems during the project period.

As regards construction of the new woodyard (three lines with a total capacity of 5 million m3 of chips per year), initial groundwork has been fully completed and partial equipment installation has been launched. A new state-of-the-art production line will bring the following economic benefits: reduce wood losses and electric energy consumption and increase finished product output.

Ilim has a special focus on environmental projects. Ilim management has assessed the progress under the upgrade of the lime kiln waste gas treatment system project. Three Lime Kilns are being equipped with modern precipitators, which apart from minimizing the adverse environmental impact, will provide an economic benefit — lime accumulated by filters will be reused. Preparation of the site for laying of the foundations is in progress.

Installation of main process equipment is underway at the “Construction of Vacuum Evaporation Plant 8” project site. By the end of the next year, Ilim plans to commission the facility with evaporation capacity of 980 tph, while EVAPs 6&7 are scheduled to be shut down for an upgrade. This project aims both to minimize discharge and emissions by putting them back into the process cycle and to drive a significant improvement in energy efficiency. Moreover, construction of a new evaporation station is essential to support the increase in the pulp and KLB output volumes.

Ust-Ilimsk Mill

The total value of the strategic investment projects implemented in Ust-Ilimsk exceeds $300 million. The first facility visited by the delegation was the new woodyard, which was started up in June 2018. The second woodyard line is almost fully ramped up. The total woodyard capacity is 4 mln m3 of chips per year.

Another completed project is an upgraded evaporation plant, which was ramped up in October. The Evaporation Plant is to ensure efficient and safe operation of recovery boilers, as well as create opportunities to increase current pulp lines productivity.

Management has then inspected the facilities under construction within the framework of the “Oxygen Delignification” project with a new oxygen plant to be built and the oxygen delignification plant to be prepared for start-up. This facility has a significant envirnmental and economic relevance. After the upgrade the Mill will significantly reduce its adverse environmental impact and minimize chemicals consumption.

The Upgrade of Recovery Boiler 3 project is in progress: equipment installation is nearing completion, utilities installation is underway. Rebuild covers 95% of the facility, i.e. this will basically be a new boiler. And it will be the world’s most advanced boiler both in terms of higher capacity and safety.

These projects are technologically and functionally fundamental to perform a large-scale upgrade of the current pulp line with an annual increase of production output by 130,000 tons and launch of a new KLB Line with a capacity of 600,000 tons per year. As a result, by 2022, the Ust-Ilimsk Mill will acquire the status of “a million-ton mill” with an annual capacity of 1.5 million tons.

“At present, our strategic project investments exceed USD 1 billion,” said Sosnina. “We have entered an active stage of project implementation and we are keeping up the pace. Next year will be even more challenging. We will have to execute the second stage of the total upgrade of our mills and simultaneously start our ‘Big Ust-Ilimsk’ project.

“These projects will be executed without interrupting the operations, so we will focus on making sure that the construction work does not affect the mills’ current operation.

“Demand for both pulp and packaging products is growing. We are expecting record high financial results this year. This will give us an opportunity to invest, expand our production capacities, and keep growing,” Sosnina concluded.

The key consumer of Ilim’s products produced by its Siberian mills is China. In 2018, Ilim Group management held a number of meetings with Asian partners. There was a conference in Zhengzhou (Henan, China) in April and in Baodin in September. These meetings are aimed to expand the client portfolio, improve customer service quality, and optimize supply.

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