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May 9, 2022

Elopak considers divestiture of packaging facility in Russia

The company has suspended production in Russia while continuing some domestic manufacturing in Ukraine.

Norway-based carton packaging and filling equipment supplier Elopak is seeking a buyer for its Russian packaging plant, Reuters has reported.

The news comes after the company suspended its operations in Russia in early March due to the country’s invasion of Ukraine.

Elopak’s plant in St Petersburg previously supplied milk carton packaging to customers in Russia.

Elopak CEO Thomas Körmendi told Reuters: “We are exploring all opportunities of what we can do, including selling the plant.”

Körmendi did not provide additional details on the plan but said that the company had been ‘compensating the production shortfall in Russia with increases elsewhere’.

At the time of suspending its Russian operations, Elopak committed to continuing to pay its 336 employees who were directly affected by the suspension in Russia.

The company recently revealed that it has resumed some domestic production in Ukraine to maintain supplies of essential goods in the country.

Its businesses in the two countries reportedly account for 9% of its total revenue.

At the time of publishing Elopak’s first-quarter (Q1) results for 2022, Körmendi said: “The financial impact from the crisis was limited in Q1, but we have made an impairment of €22m and expect to see further effects in the near term.”

The company has joined a long list of firms that have halted all operations in Russia or are actively seeking a buyer for their assets in the country.

Last week, Mondi decided to sell its Russian assets in response to the crisis, having previously suspended all its operations and significant capital expenditure projects in the country on a temporary basis.

Elopak currently produces 15 billion carton packages a year in total.

The company recently entered a joint venture with Indian company GLS in an effort to increase its annual production.

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