Stora Enso has divested three of its corrugated packaging plants in Russia. The company’s Lukhovitsy, Arzamas and Balabanovo packaging plants have been divested to local management.
Stora Enso’s assessment is that due to the uncertainties in the Russian market, local ownership and operation will 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 EUR 35 million was recorded in the first quarter result. The additional loss on the transaction under IFRS will be approximately EUR 55 million, consisting mainly of currency translation adjustments to be recorded at the closing date. The expenses are considered as items affecting comparability.
The divested sites are located in Lukhovitsy, Arzamas and Balabanovo employing approximately 620 people and have a total annual capacity of 395 million m² of corrugated packaging. The sites primarily produce corrugated packaging for grocery, home improvement, confectionery and pet food segments in the domestic Russian market.
The company announced on 2 March of this year that it would stop all production and sales in Russia until further notice. On 25 April, Stora Enso had announced the divestment of its two sawmills and forest operations in Russia to local management.