This document provides an overview of International Paper's wood supply operations in Russia. It discusses IP's forest leases in Russia which cover 360,000 hectares of state-owned forest. IP consumes over 2 million cubic meters of wood annually from over 60 suppliers. The wood is delivered via truck and railroad. IP's Russian mill sources wood from leased forests and implements sustainable forest management practices like reforestation. The document compares factors of wood supply between Russia, the US, and Finland such as forest ownership, management practices, yields, and growth rates. It identifies opportunities to strengthen the competitiveness of Russia's forest industry through improved sustainable forest management.

1. Saint-Petersburg08th of July, 2013
IP Russia wood
supply
Presentation for
EFI summer school
Grabar Fedor
Deputy forest director
IP Russia

2. IP at a glance
2
08th of July, 2013
source: http://www.ipaper.com/US/EN/Company/Investors/RoadshowHandout.html
Founded in 1898
One of the world's largest
producers of paper and
packaging
2 Key Platform
Businesses: Uncoated
Paper and Packaging,
complemented by Xpedx
(distribution)
Manufacturing operations
across the globe:
North America
Latin America,
Europe,
Russia,
Asia
North Africa.
60,000 employees in over
20 countries

3. IP EMEA
Revenues in 2010 - $3.7 billion
Manufacturing operations
in 8 countries
3 uncoated paper mills
2 recycled board mills
25 box plants
Production capacity of
> 3.8 MM metric tons
of paper and board products
9,000 employees
(over 30,000 including Ilim)
3 ILIM Group JV mills:
Forest management and wood supply
Integrated Paper mill Offices
Foodservice Europe Ilim GroupShorewood Packaging Europe
Canary Islands,
Atlantic
Guadeloupe,
Caribbean Sea
Box plantRecycled containerboard mill
Ilim Group JV
in Russia
3source: IP

4. IP Russia and Svetogorsk mill:
major milestones in our corporate history
Finnish Enso village. Paper &
board mill
1887 1929 1936 1961
1972 –
1990
1995
Декабрь
1998
1999
2001-
2002
2004 2007 2008 2010 2011
Chlorine mill
Reconstruction
Soviet government
implements
large-scale modernization
of the mill
The mill joins Swedish
company Тetra Laval
IP purchases OAO
Svetogorsk
Launch of sheeting facility
PM4 and PM1
rebuilt
Launch of A4
facility. Speed up
of PM4
Launch of BCTMP plant
Group ILIM is set up
Groundbreaking
ceremony for CHP with
Governor Serdykov
ZAO International Paper
Liquid glass mill
4source: IP

5. Trees Pulp Finished products
Hardwood
Softwood
Packaging
Print & Writing
-Rolls
-Cut size
Tissue
 BCTMP/Mechanical
(chemical + mechanical)
 Kraft pulp
(chemical process)
 Bleached pulp
(white)
 Un-bleached pulp
(brown)
Finished products
5source: IP

6. 6
Sustainability Goals
source: IP

7. Wood supply
7source: IP and state forest inventory data
Annual consumption: > 2 MMm3.
Specie: softwood, birch, aspen.
Delivery: truck, railroad.
Suppliers: > 60.
Purchasing: at gate, at railway landings,
at roadside storage or remote wood
yards.
FSC COC: 100%.
Measurement - by stick scaling, results in
solid m3 under bark.
Target inventory - 30–45 days of
consumption.
Snow storage of aspen to guarantee
supply of fresh aspen in Q4.

8. Forests
8
Forests are state owned.
IP leases forests for long term.
Square: 360 th. Ha.
FSC FM: 100%.
Employees: 160.
Harvesting method: CTL (harvester +
forwarder).
Operations: logging - partly by own capacity,
trucking, loading, road construction – by
contractors.
Two shifts truck delivery due to road and
weather conditions.
Reforestation: 85% seed-tree or sprouting
methods; 15% planting with seedlings.
source: IP and state forest inventory data

9. Wood supply key issues
Country
Factor
Russia
(Northwest)
USA
(Northeast)
Finland
(South/central)
Forest land ownership 100%
government
72% private
28%
government
65% private
35%
government
Modern forest management Low High High
Saw log yield (%) 30 50-70 53
Volume from thinnings (%) 3 30 27
Forest road density, km/1000
ha
1 10 12
SW Growth rate, m3/ha/yr 2.1 4.4 4.4
SW Rotation cycle, years 85+ 55 70-90
SW yield, m3/ha/year 0.1-0.2 2.3 2.1
Source: Government publications, technical articles, professional estimates. 9
Driving toward sustainable forest management practices is good opportunity to strengthen
a competitiveness Russian forest industry in terms of wood supply.
Wood supply are influenced by:
Consumption conditions (specie,
specs etc)
Logging and trucking capacity
Condition of forests
(tended/untended, road density etc)
Forestry regulation
Monetary policy

10. Thank for your attention!
www.ipaper.com
fedor.grabar@ipaper.com
10