Stora sells Russian packaging operations
Richard Stuart-Turner, 17 May 2022
The company’s three corrugated packaging plants in Russia Lukhovitsy, Arzamas, and Balabanovo have been divested to local management. The divested sites employ around 620 people.
Stora Enso said its assessment was that, due to the uncertainties in the Russian market, local ownership and operation would provide “a more sustainable long-term solution” for these businesses and their respective employees.
The transaction will have no material impact on Stora Enso’s annual sales and operational EBIT. Due to reduced business prospects for these businesses, an impairment loss of €35m (£30m) was recorded in the first quarter result.
The additional loss on the transaction under IFRS will be approximately €55m, consisting mainly of currency translation adjustments to be recorded at the closing date. The expenses are considered as items affecting comparability.
The divested sites employ around 620 people and have a total annual capacity of 395 million square metres of corrugated packaging. The sites primarily produce corrugated packaging for grocery, home improvement, confectionery, and pet food segments in the domestic Russian market.
Stora Enso said in early March that it would stop all production and sales in Russia until further notice due to the invasion in Ukraine. In late April it then entered into an agreement to divest its two sawmills and forest operations in Russia to local management.
A few days later the business reported its highest quarterly EBIT in some 20 years and an all-time-high margin in its Q1 results.