American investors leave forests of Arkhangelsk
Many years of Russian-American partnership in wood processing is coming to an end as International Paper sells its shares in Ilim SA, the holding company of joint venture Ilim.
The deal is worth $484 million, the American company informs. Buyers are Russian business partners Zakhar Smushkin and the brothers Boris and Mikhail Zingarevich.
Ilim produces a significant share of its pulp and paper production in the north Russian region of Arkhangelsk. The processing plant in Koryazhma has an annual output of 1,2 million tons of pulp and employs 5,800 people.
In a comment, Zakhar Smushkin describes the partnership with International Paper as “one of the most successful examples of joint projects in the wood processing complex.”
Reportedly, production has doubled in the period of the partnership and the value of the company tripled.
Smushkin regrets that the cooperation is coming to an end. “We are happy with the results of the joint activities and would like to preserve our efficient partnership, but under the existing circumstances our partners made their decision,” he says to newspaper Kommersant.
Reportedly, Chinese investors were ready to buy the shares of the Americans, but negotiations never started.
The exit deal of the International Paper in Ilim is expected to be approved by Russian regulatory authorities. But uncertainties are on the horizon after another similar deal was halted in late 2022. The Austrian group Mondi has still not been able to sell its stake in wood processing company Mondi Syktyvkar.
The Ilim Group produces 75 percent of all Russian pulp, 20 percent of cardboard and 10 percent of paper. Total production amounts to 3,6 million per year.