Segezha PPM (Investlesprom Group) is temporarily shut down

According to the order the heads of the departments are to provide twenty-four-hour watch by responsible persons, prepare equipment for maintenance which will be done in one-shift regime. Production staff and management are having idle time. During this period the staff will be paid according to existing at the Mill Collective Agreement and labor legislation. The workers are warned officially that they might be summoned in accordance with shift-working arrangement. Heat-and-power-engineering objects continue to function- those providing heat for the Mill and also two steam boilers providing Segezha city with heat and hot water. Woodyard and transport department are still accepting raw materials and shipping ready products to consumers.

Commentary of Vasily Preminin, executive director of JVC “Investlesprom” Pulp-and Paper production Division: - Short term halts, I’ll remind you, were organized in December last year. At that time while having deficit of financial resources and fuel we provided Segezha with heating without proper compensation of expenses from the budget. But due to insufficient financing we are unable to pay for raw materials and again have to halt the production temporarily. I’d like to say that the reason of financial resources deficit is not in the sphere of the Mill. On the contrary, the demand for our products is high and consumers are ready to pay good money for their quality. For example ,year 2011 became altogether record-breaking in respect of achieved profitability level and increase of gain for sold paper and paper packaging for the last ten years. And now at the end of January despite it is dull season for our products and also notwithstanding the second wave of crisis in the European economy , we have stock of orders for a month of twenty-four-hour work. But still we have to halt the production as our all floating assets today are confiscated for paying off former loans. Correspondingly not only investment projects but also day-to-day operation are no longer financed. We are actively engaged in negotiations with creditors and share holders and express hope that necessary solutions for Segezha PPM financing will be found.