Ruukki sees Russia investment proceeding -CEO

HELSINKI, Jan 19 (Reuters) - Finland's Ruukki RUG1V.HE sees its plan to build a 1.1 billion-euro ($1.6 billion) pulp mill in Russia proceeding despite news of local government suspending the investment agreement, the head of Ruukki said.

The diversified group Ruukki, whose activities range from managed care to furniture making, signed the deal to build saw and paper mills in the village of Manturovo, 500 km (300 miles) northeast of Moscow, in May 2007.

Interfax news agency quoted on Friday regional governor Igor Slyunyayev in Russia’s Kostroma region as saying the local authorities were not happy with the deal and decided to change it.

“The plan is in process in the way it is supposed to be,” Ruukki Chief Executive Matti Vikkula told Reuters on Saturday.

“We have, as we’ve had all along, existing two investment agreements with Kostroma’s oblast. We also have priority status applications to be processed this month,” Vikkula said.

He said Ruukki continues to aim for the sawmill to be operational within 2008 and the pulp mill to be ready in 2010.

“I guess they (the local government) must have their reasons to come out with this type of publicity,” he added. (Reporting by Sami Torma; editing by Michael Roddy)