RCIF buys 42% stake in RFP Group

Unquote.com, 18.10.2013

The Russia-China Investment Fund (RCIF) has acquired a 42% stake in forestry holding company Russian Forest Products Group (RFP).

The capital provided for the GP's acquisition of the 42% stake will be used to back RFP's strategy to develop value-added wood processing. RFP aims to open a new manufacturing facility. Moreover, the capital injection – as well as debt financing – will be used to open a further sawn-wood plant by 2015.

The GP invested in RFP as it aims to introduce modern forestry technology and create new jobs in Russia's Far East. Furthermore, RCIF seeks to improve RFP's operations, financing and corporate governance as part of the transaction.

RCIF is a joint private equity fund set up by the Russian Direct Investment Fund (RDIF), one of the Russian government's investment vehicles, and China Investment Corporation (CIC), China's sovereign wealth fund. RCIF manages around $3-4bn, with $1bn each provided by RDIF and CIC, as well as $1bn provided by other investors. Russia's state development bank Vnesheconombank is the fund's strategic partner.

RCIF promotes cross-border transactions between China and Russia, aiming to strengthen both economies with investments in infrastructure, transportation, utilities, real estate, agriculture, forestry, business services, manufacturing, TMT, healthcare and natural resources.

Company: RFP is a forestry holding company based in Khabarovsk Krai. The firm manages 5 million hectares of forest, harvesting more than 4.6 million cubic meters every year.

RFP claims to be the largest exporter of forestry products in the Asia-Pacific region. RFP manages 10% and 15% of all wood exports to China and Japan respectively.

The group was founded in 2005 and currently employs more than 6,000 staff.