CLT panels – a promising new market for Segezha

28/06/2019

What is CLT?

CLT panels are multilayer panels made from solid wood boards stacked crosswise and glued together. 

Cross-laminated timber or CLT is rapidly gaining momentum across the globe. A recent study by Research and Markets suggests that the global CLT market reached a value of USD 664 mn in 2018. The market value is expected to reach USD 1,457 mn by 2024, growing at a CAGR of 13.4% in 2019-2024. 

CLT usage geography

Throughout history, CLT has been largely used in European countries, primarily in the Alpine region. Now, demand is growing globally as stakeholders, including developers and architects, discover the advantages of using CLT alongside or instead of traditional materials. A report by Research and Markets notes China, Japan, United States, Canada, Australia and New Zealand as some of the countries where stakeholders are considering cross laminated timber as a building material for their projects.

Why is demand for CLT growing?

In the construction industry, CLT offers a more cost-effective alternative to traditional materials, such as concrete. Structures built using CLT require shorter construction periods, since the product is lightweight and quick to install. CLT is also a more sustainable alternative to traditional construction materials.

CLT is a very flexible product in terms of building design. The lightness makes it adaptive to various site conditions, proximity to other structures. The product can also be combined with a variety of other construction materials, which offers a range of design and architectural options.

Historically, CLT panels have been used in single-family residential constructions. Now, due to recent technological advancements, the panels can be used in the construction of multi-story buildings (up to ten floors), which opens up new opportunities for the construction of larger residential structures and commercial spaces.

CLT production at Segezha

In late June 2019, Segezha launched construction of a new CLT plant in Sokol, Vologda region. The production site (Sokol CLT), covering an area of over 10,000 sq m, will be located on the grounds of Sokol Wood Processing Combine, the leading Russian producer of construction and glulam beams. The capacity of the plant is expected to reach 35,000 cu m of ready products per year. The company has already acquired a full range of equipment from Ledinek Co. (Austria) for the future production site. The amount of investment into the manufacturing facility is over RUB 3 bn.

Sokol CLT investment project has been included in the list of Russia’s priority investment projects in the forestry sector. The plant will be the first in Russia to produce CLT panels, marking a move towards the development of wood-based multi-story construction.

Segezha aims to produce its first CLT panel by early fall 2020 and enter industrial production stage by the end of 2020. Early batches will be exported, which will contribute to strengthening of the Group’s presence in Europe and Japan. However, the company’s end goal is to start selling CLT panels in Russia. 

The Russian government is looking to increase demand for industrial-made wooden housing and has recently launched a pilot program for subsidizing loans for wooden home kits. Russia’s Ministry of Industry and Trade expects that the initiative will contribute to a two/three-fold increase in wooden housing production.

Segezha is already in talks with Sistema portfolio company Etalon Group, one of Russia’s largest residential real estate developers, on the construction of two pilot projects involving multi-story wooden construction: one office building and one residential building in Moscow.