Raute Corporation has received orders worth approximately EUR 55 million from Russia’s LLC Plitwood. The scope of orders includes all machinery and equipment for the production process of an entire plywood mill and also services related to the installation, commissioning and production start-up of the mill. The machinery and equipment will be delivered to a green field plywood mill to be set up in the Vologda area, which is situated 650 kilometers east of St. Petersburg.
The ordered machinery and equipment will be delivered during the end of the year 2021 and beginning of the year 2022, and the annual capacity of the new mill will be approximately 180,000 cubic meters of birch plywood.
The equipment will be engineered and produced in Raute’s units in Nastola, Shanghai and Kajaani, and also in the company’s partnership network. This order is one of the biggest single orders ever in Raute’s history.
LLC Plitwood is a company established in 2017 for this project. Its principal owners are AO CHFMK (Cherepovets Plywood-Furniture Plant) and LLC VLP (Group of Companies “Vologodskiye lesopromyshlenniki” – Vologda forest industry enterprises). Even though the company is new, it has more than 60 years’ strong experience in wood processing and plywood industry in its background.
The work resulting now in this order was already started in 2019 with the quotation process. However, main part of the work was done during the COVID-19 pandemic. Due to the exceptional circumstances, we were forced to carry out the negotiations. including technical solutions and contractual terms, almost entirely through remote connections. Succeeding in that required excellent flexibility from all involved, both at Plitwood and Raute. Further, succeeding in this shows that the “digital leap” forced by the pandemic is reality also for Raute and Raute’s customer base.
The orders now received have no impact on Raute’s outlook for 2020 but improve and strengthen outlook for 2021. Raute’s net sales for 2020 are expected to decrease compared to 2019 and operating profit is expected to weaken clearly year-on-year.