RUSSIA – Russian President Vladimir Putin has signed a decree ordering the temporary seizure and nationalization of Silgan Holdings’ production sites.
This prominent metal packaging manufacturer owns two plants, one in the Moscow region and one in the Adygea Republic, now under the Kremlin’s state supervision.
This action follows an earlier decree signed in April, allowing the government to control any foreign business deemed necessary for state security and national interests.
The initial move under this decree involved seizing two energy firms, one headquartered in Germany and another in Finland.
Silgan Holdings, based in Connecticut, US, operates over 100 packaging and consumer goods manufacturing facilities across North and South America, Europe, and Asia.
The company’s annual net sales were estimated to be roughly US$6 billion in 2023. However, its Russian operations have significantly declined since the outbreak of the war in Ukraine.
While Silgan’s Russian plants have a potential production capacity of 350 million containers per year, they were reported to be almost entirely inactive by last year.
Revenue dropped from 4.3 billion rubles (US$49 million) in 2021 to 3.6 billion rubles (US$41 million) in 2022.
Overall income plummeted to just 15 million rubles (approximately US$171,000), and the company incurred a net loss of 312 million rubles (US$3.5 million). Between 2021 and 2022, Silgan Holdings’ Russian shares dropped by 5%.
Since Russia invaded Ukraine in February 2022, numerous packaging companies have exited the country. Mondi sold its remaining facility in Syktyvkar for €775 million (US$826 million).
Russia’s anti-monopoly agency and its government commission in charge of foreign investments approved the Sezar Invest deal, which was completed in December.
Other companies, including Huhtamaki and Smurfit Kappa, have also exited the country. Huhtamaki sold all its operations for €150 million (US$150 million), and multiple forestry standards associations retracted certifications from Russian-sourced fiber materials.
In a statement, Huhtamaki commented, “Huhtamaki considers that the current evolution of the situation and the long-term outlook in Russia will prevent the realization of its growth strategy and long-term ambitions in the country.
“Huhtamaki will continue to prioritize investments that capture the significant growth opportunities in the rest of the world, in line with its global ambitions and 2030 Strategy.”
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