By 2024 Ilim Group plans to triple its KLB volumes delivered to Shandong region

On April 11, 2019 Ilim Group representatives met with the largest regional packaging manufacturers in Qingdao, Shandong province (China).

К 2024 году «Илим» планирует увеличить поставки картона в регион Шаньдун более чем в 3 раза

The conference was co-organized by TC International Investment Corporation, Ilim Group’s partner and distributor of pulp and paper products in the People’s Republic of China since 2006. The meeting was attended by representatives of more than 50 box plants and providers of transportation and logistic services in the region. Totally there were more than 100 participants.

Alexander Lykhin, Vice-President, Asia, head of JSC Ilim Group representative office in China, spoke on the global situation in the pulp and paper market and Ilim's plans for the next 5 years.

“Tightening regulations on packaging safety, ban on fluorescent substances and expected shortage of fiber for testliner manufacturing due to restrictions imposed on imported waste paper and closure of old and environmentally unfriendly plants will cause a shortage of packaging materials in China in general and in the region in particular. We have taken the market environment into account and developed an investment program in line with the growing demand for packaging. In particular, in 2019 we will complete the KLB line upgrade at our Bratsk Mill and will increase its capacity by 110 thousand tons. In 2021 we will start up a new KLB mill in Ust Ilimsk with a capacity of 600 thousand tons. The KLB quality will meet world class requirements,” said Alexander Lykhin at the meeting.

Conference participants also discussed development of logistic infrastructure. Before the conference, Ilim Group SCM leaders held several meetings with the representatives of Chinese transport companies and visited product storage facilities.

Ilim Group plans to increase its export to China by almost 1 m tons to reach 2,4 m tons per year. In particular, export volumes to Qingdao region will triple by 2024. This plan requires an optimal supply chain, which will allow to deliver products to end customers on time and without failure. For this purpose Fintrans GL (Ilim Group subsidiary) plans to invest in the development of the existing logistic infrastructure and increase its rolling stock increase.

“We are absolutely confident about Ilim Group product quality and our distribution capabilities. Long history of our partnership allows us to face the future with confidence and optimism. I am sure that our partnership will be beneficial not only for Shandong industrial players, but also for the Chinese pulp and paper industry in general,” summarized Zhang Da Yound, TC International Investment CEO.

Reference information:

Qingdao (Shandong province) is a major economic center in China with representative offices of banks, multinational companies and manufacturing facilities of many large companies. In 2016, Qingdao ranked 12th among Chinese cities in terms of GDP (CNY 1, 001 trillion ) with an annual growth rate of 7.9%. Qingdao is also one of the five largest Chinese ports involved in foreign trade. There are large state-owned companies in the city (Haier and Hisense, manufacturers of household appliances and electronics, Yizhong tobacco corporation, Two stars shoemaker, Tsingtao brewery corporation, etc.) Tax revenue from these companies amounts to 50% of the total revenue of Qingdao region

Over the 23 years of its presence in China, Ilim Group has built a reputation of a reliable supplier. Ilim products are known for high quality, wide range of basis weights and FSC and ISEGA international certificates for export food packaging. Efficient distribution system, own office in Beijing, geographical proximity of the plants to customers create a competitive advantage for Ilim Group. In 2019 Ilim Group has already held several meetings with potential and existing clients located in the south -west and in the north-east of the country (Sichuan, Yunnan, Guizhou, Liaoning and Heilongjiang provinces). By 2024, Ilim will supply its products to all regions in China.

Fintrans GL, subsidiary of Ilim Group, has operated in the logistic services market since 1998. It ships 8,6 m tons per year. Fintrans GL manages 11 regional divisions, 250 km of own railway lines, 3 container terminals and 30 locomotives. Fintrans GL has increased its fleet of railroad cars (both own and leased) up to 4200 pcs. to minimize shipment risks.