Stora Enso divests its sawmills and forest operations in Russia
By Stora Enso
By Stora Enso
Stora Enso has entered into an agreement to divest its two sawmills in Russia. The company’s Nebolchi and Impilahti sawmills will be divested to local management. In addition, the divestment includes Stora Enso’s Russian forest operation which through its harvesting supplies wood to the sawmills.
Stora Enso’s assessment is that due to the uncertainties in the Russian market, local ownership and operation can provide a more sustainable long-term solution for these business operations and the employees working there.
The transaction is, pending necessary approvals, expected to be concluded within Q2 2022 and will have no material impact on Stora Enso’s annual sales and operational EBIT. Due to decreased business prospects on these businesses, an impairment loss of EUR 70 million has been recorded in the first quarter result. The additional loss on the transaction under IFRS will be approximately EUR 60 million, consisting mainly of currency translation adjustments to be recorded at the closing date. The expenses are considered as items affecting comparability.
The sawmill sites are located in Novgorod and Karelia employing approximately 330 people and have a total annual capacity of 350,000 m3 of sawn timber, including 55,000 m3 of processed timber and 65,000 tonnes of pellets. Stora Enso’s Russian forest operations employs approximately 170 people and manages long-term harvesting rights for around 370,000 hectares.
Stora Enso announced on 2 March 2022 that it would stop all production and sales in Russia until further notice. The group is in a process to find a sustainable solution for the future of its three packaging plants in Russia.