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Finnish pulp and paper manufacturer Stora Enso has offloaded its corrugated packaging plants in Russia as the country’s invasion of Ukraine continues.
The company has sold three of its packaging plants located in Lukhovitsy, Arzamas and Balabanovo to local management.
The sites specialise in producing corrugated packaging for Russia’s grocery, home improvement, confectionery and pet food markets.
Around 620 people are employed across the plants, which produce 395 million square metres of corrugated packaging a year.
Stora Enso said that the decision was taken based on the results of an assessment that found that the businesses and their employees require a ‘more sustainable long-term solution’ amid the current ‘uncertainties in the Russian market’.
The report said that this solution could be offered by local ownership and operation.
Stora Enso said that its annual sales and operational earnings before interest and taxes will not be impacted by the divestment.
In its first-quarter results for 2022, the company registered an impairment loss of €35m because of decreased business prospects for the three plants.
Under International Financial Reporting Standards (IFRS), around €55m will be an additional loss on the deal, primarily including ‘currency translation adjustments to be recorded at the closing date’.
The divestiture is the latest move Stora Enso has undertaken after Russia announced its ‘special military operation’ in Ukraine.
In March, the company suspended all its production and sales in Russia in response to the invasion.
Stora Enso has also divested two sawmills and forest operations in the country to local management.
Earlier this month, paper and packaging firm Mondi decided to divest its assets in Russia.
The company’s board had previously evaluated all options for the group’s interests in the country, including legal separation due to the conflict.
Last month, Finland-based sustainable packaging provider Huhtamaki also announced its decision to divest its operations in Russia.