Finnish Stora Enso divests two Russia sawmills to its managers

Stora Enso's Russian forest operations employs approximately 170 people and manages long-term harvesting rights in Russia, the group said.

Finland's Stora Enso has entered into an agreement to divest its two sawmills and their forest operations in Russia to local management, the group said on Monday, sending its shares down more than 5% in afternoon trade.

"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 Finnish forestry group said in a statement. Stora Enso's Russian forest harvesting rights cover around 370,000 hectares and have been the company's second-largest forest asset by country.

Stora Enso announced on 2 March 2022 that it would stop all production and sales in Russia until further notice due to Russia's war in Ukraine, and added the group was seeking a "sustainable solution" for its three packaging plants in Russia. The forestry group recorded an impairment loss of 70 million euros ($75 million) for the sawmill sites in Novgorod and Karelia in the first quarter and said an additional loss for the transaction would be around 60 million euros, to be recorded at the closing date, expected in the second quarter.

The sawmill sites employ approximately 330 people and have a total annual capacity of 350,000 m3 of sawn timber. Stora Enso's Russian forest operations employs approximately 170 people and manages long-term harvesting rights in Russia, the group said. Contacted by Reuters, Stora Enso declined to share further details on the transaction.

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