China accelerates investment in timber processing park in Russia's Tomsk region as EU announces sanction process following Crimea's reunification; US$250M investment to date in complex including three mills, power plant, forecast to reach US$380M by 2022

LOS ANGELES , April 17, 2014 () – Chinese investors are planning a timber processing park in Western Siberia's Tomsk region that will include three mills and a dedicated power plant, Russian news service Ria Novosti reported on April 17.

The complex is part of the Chinese government's strategy to strengthen business ties with Moscow as Russian's relationship with the EU becomes increasingly strained following Russia's annexation of Crimea and Sevastopol, according to Boris Kaznacheyev, Deputy Director General of the Roskitinvest project.

Kaznacheyev said investment in the project had reached 9 billion rubles (US$250 million) to date, and was expected to reach 30 billion rubles ($830 million) by 2022.  The scope of the investment includes timber logging, processing and the development of related infrastructure  

The Russian-Chinese JV launched a timber mill and veneer plant in the Asinovsky region near Tomsk In 2011, but the launch of the plants was postponed because of uncertainties over funding and concerns that building codes may have been violated. The region's deputy governor Leonid Reznikov said a working group would now be established to progress operations as officials want the project to be launched in the shortest time possible.

Russian Deputy Prime Minister Arkady Dvorkovich said on April 16 that China is also interested in developing alternative energy projects in Russia's newly-annexed Crimea and Sevastopol regions. Russian Prime Minister Dmitry Medvedev has also said that cooperation with China is a top priority for Russia. President Vladimir Putin is expected to visit China next month, where he is expected to sign agreements including one on the supply of Russian gas to China.

Meanwhile, Europe has announced a sanction process against Russia, which has been described by the Russian Foreign Ministry as inappropriate and counterproductive.

The primary source of this article is RIA Novosti, Tomsk, Russia, on April 17, 2014. The original article can be viewed here.

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