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Baikal pulp mill should be modernised, closed in 10 years-official

May 18, 2012, 10:24 UTC+3

According to the modernisation scenario proposed by the BPPM leadership and the Sibgiprobum Institute will require some 5 billion roubles

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IRKUTSK, May 18 (Itar-Tass) — It will take at least 10 years to wind down the operation of the Baikal Pulp and Paper Mill (BPPM) require, according to the external manager of the company Alexander Ivanov. During this period, he estimates, it is possible without serious budgetary funding to recycle all the waste accumulated over 45 years of work, as well as to settle the social problems of the Baikalsk company town.

“We see the following scenario: the BPPM is modernised, continues to work for some time, and during this period all the waste is recycled. In my view, this period cannot be limited to 2 - 3 years, it will take at least 10 years,” Ivanov told Itar-Tass on Friday. He suggested that the logical conclusion of the program for the development of BPPM, which since the end of 2011 is developed by the Russian government, should be closing the plant. But during the period when the company in the south of Baikal continue to work, its “operation should be made maximally safe for the environment,” he said.

According to the modernisation scenario proposed by the BPPM leadership and the Sibgiprobum Institute (the mill’s designer), the enterprise’s transfer to a closed water cycle and chlorine-free bleaching technology will require some 5 billion roubles. It is planned to take as an example the Swedish company Domsjo Fabriker. According to Ivanov, it is not ruled out that the loan funds for the BPPM modernisation will be provided by Vnesheconombank (VEB) such a possibility was discussed by the Russian government.

Ivanov believes that it is possible to dispose of more than 6 million tonnes of lignin sludge (main waster of cellulose production) only while the mill works. "From our point of view, the waste disposal when the mill is stopped is not real, because when the plant stops the waste treatment facilities will also stop, so it will be necessary to build new treatment facilities to dispose of waste, after which they would be no longer needed and abandoned," he explained.

In addition, a working mill will make it possible to repay the main debt of 2 billion and 850 million roubles within a year to 101 creditors, the main of which is Alfa-Bank. According to the changes to the external administration plan that was adopted on Thursday, for the debt settlement by July 2013 the company will need to attain the production capacity of 82-84 thousand tonnes of bleached pulp by the end of 2012, as well as to launch in September the second production flow of unbleached pulp, with the capacity of 100 tonnes per year. The launch of the second flow, according to Ivanov, will require an additional 600 million rouble sin investment. The BPPM market will still be provided by China to which, the external manager confirmed, about 95 percent of the Baikal pulp is currently exported.

“But the whole program should have a clear-cut deadline for shutting down the mill,” said the external manager.

The BPPM was commissioned in 1966. The mill’s 49 percent of shares are held by the state represented by the Federal Agency for State Property Management (Rosimushchestvo), 51 percent by the Kontinentalinvest investment company. From December 2010 to June 22, 2012 the external management procedure was established at the paper mill. The creditors of the Baikal Pulp and Paper Mill intend turn to the arbitration court with a request to extend the external management procedure for another six months, and then also for the same period.


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