RUSSIA – Finnish consumer packaging company Huhtamaki has divested its Russian business to Espetina, a holding company owned by Alexander Govor and Iury Kushnerov for US$150 million.
The move follows the firm’s earlier announcement to stop all investments in Russia at the outbreak of the invasion of Ukraine.
The company had also previously suspended all investments in Russia in response to the conflict.
Huhtamaki president and CEO Charles Héaulmé said: “We consider that the current evolution of the situation and the long-term outlook in Russia will prevent the realization of our growth strategy and long-term ambitions in the country.
“We are pleased to bring to a close the subsequent review of our strategic options in Russia. As part of the process, we conducted extensive due diligence to find the best possible buyer and future partner for our local employees – the safety and wellbeing of whom remain important to us.”
As part of the deal, Espetina has acquired four manufacturing units in Russia, which employ a total of 724 people.
Héaulmé added: “We feel that Espetina will be a good and committed owner for the business and the future of our employees.”
The sale is not expected to have a significant financial impact on Huhtamaki in 2022, but the Espoo-based business did say it expects the transaction to boost its third-quarter revenues by approximately €15 million (US$15m).
Huhtamaki achieved sales growth of 31% in the first six months of 2022 to reach €2.2 billion (US$2.2bn).
In June this year, the company announced a new US$100 million project to expand its molded fiber product manufacturing capacity in Hammond, Indiana.
In 2021, Russian business accounted for 3% of the group’s total sales, approximately €108 million (Us$116m).
Other packaging firms that have announced plans to sell their respective Russian businesses to local management include Tetra Pak, a subsidiary of Tetra Laval International (TLI), Amcor and the Norway-based company Elopak.
In July, Tetra Pak announced that it would be withdrawing from all ongoing operations in Russia and divesting all business there to local management, claiming that increasing restrictions on Western exports to Russia have made the supply chain unsustainable.
Amcor also recently stated that it will sell its three factories in Russia, representing 2-3% of its total sales, with the transaction expected to be completed in the second half of its 2023 fiscal year.
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