RCIF makes first investment
Russian Direct Investment Fund’s Russia-China Investment Fund (RCIF) has reached a preliminary agreement to become a shareholder of Russia Forest Products (RFP), Russia’s second-largest forestry company.
RCIF’s investment will fund the company’s move up the value chain from producing primarily raw logs to higher value added products like veneer and sawnwood.
Completion of the transaction is subject to the satisfactory completion of regulatory approvals, as well as final approval according to corporate procedures of RCIF.
“This transaction ideally fulfils the mission of the Russia-China Investment Fund: we expect it to generate strong returns as well as to advance bilateral economic cooperation between Russia and China,” says Kirill Dmitriev, chief executive officer of the Russian Direct Investment Fund. “As a result of this transaction RCIF may invest over USD200m in RFP and become the largest single shareholder of the company. This investment will lead to creation of new jobs throughout Russia’s Far East and implementation of modern technologies in Russian forestry sector.”
Russia Forest Products, based in the Russian Far East, is a producer of wood and wood products. The company holds annual allowable cut rights of over 4.5 million cubic meters and maintains long-term leaseholds on 6.4 million hectares of forest. Russian Forest Products sells most of its production to China, and the company accounts for approximately 10 per cent of total timber export from Russia to China.
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