As a source close to Basic Element told Vedomosti, in January the company proposed to the management of Arkhangelsk Pulp and Paper Mill to discuss the possibility of supplying timber from two timber industry enterprises located in Arkhangelsk Oblast and controlled by Continental Management – Lukovetsky LPH and Dvinskie Lesopromyshlenniki. Raw materials from these enterprises are supplied to APPM, but through companies of the Titan Group, which was previously headed by State Duma deputy Vladimir Krupchak. “Negotiations are currently underway on the price and volume of supplies,” the source told Vedomosti. He did not rule out that Basic Element structures would give APPM timber for processing and then independently sell the resulting products.

Andrey Korobko, a member of the APPM board of directors from Basic Element, confirmed to Vedomosti the information about the negotiations on raw material supplies, but refused to provide details. “They have not been accepted, but they have not been rejected by the management of the PPM,” Korobko explained. According to him, Basic Element has developed a set of measures to increase the efficiency of the plant. In particular, Korobko says, today the APPM board of directors will discuss the sales policy of APPM, whose exclusive trader is Arkhbum. At the end of last year, Korobko proposed Kingsington Limited as an alternative trader. In addition, Korobko claims that Continental itself and other companies, which he declined to name, are interested in becoming a trader for the plant.

Timur Sokolov, a member of the board of directors of the plant from Pulp Mill, did not rule out that the proposal of "Basel" on raw material supplies will be considered. And the chairman of the board of directors of APPM Heinz Zinner told "Vedomosti" that last Friday he held "constructive" negotiations for the first time with the vice-president of "Basel" in charge of the forestry business, Pavel Vasiliev. "I am confident that we will be able to agree on joint work at APPM for the benefit of all shareholders," Zinner says.

Krupchak claims that he knows nothing about the negotiations with Bazel. According to him, Titan purchased timber from Lukovetsky LPH and Dvinskie Lesopromyshlenniki long before they switched to Bazel. In total, according to Krupchak, the pulp and paper mill buys about 3.5 million cubic meters of hardwood per year, and both Continental timber industry enterprises supply Titan with about 400,000 cubic meters.

Managing Director of Lesprom Industry Consulting Alexey Bogatyrev says that direct timber supplies to the mill should increase its efficiency. “The fewer intermediaries in raw material supplies, the better for the enterprise,” he notes. However, Director of the Public Relations Department of RAO Bumprom Sergey Vetchinin believes that Bazel’s proposals are part of the company’s strategy in the fight for control over the pulp and paper mill. “Raw materials and sales are the main levers through which the mill can be influenced,” he notes. “Having them in its hands, Bazel will be able to strengthen its position in negotiations with shareholders.”

The same is being said at Basel. A source close to the company reminds us that gaining access to APPM profits in proportion to a 30% share is only an intermediate goal of Basel. And Korobko adds that the ultimate goal of Basic Element is to purchase a controlling stake in the enterprise.

Truce in exchange for timber