International Paper to Offload Stake in Russian Ilim Group

SEATTLE (Scrap Monster): International Paper (IP)- the Memphis, Tennessee-headquartered pulp and paper company announced plans to sell its 50% stake in Ilim Group- the leading Russian forest products company.

The press release issued by the company said that it intends to explore strategic options, including possible sale, of its 50% ownership interest in Ilim Group. It further stated that it has no intention to seek suspension of operations or initiate any liquidation or bankruptcy proceedings with respect to the Russian forest products major.

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It was in 2007 that the company had acquired stake in Ilim Group via a $650 million deal. As part of its commitment to long-term investment program, IP had invested around $3.2 billion in enhancing the group’s production over the ten-year period following the stake acquisition. It must be seen that majority of the remaining 50% ownership of the ILim Group is held by billionaire entrepreneur Zakhar Smushkin.

It must be noted that International Paper was criticized by a leading British environmental group for continuing investments in Russia, especially at a time when Western companies are leaving Russia in retaliation to Russia’s invasion of Ukraine. IP’s reputation as an ethical company was questioned due to its partnership with the Ilim Group.

Ilim Group produces over 3.6 million tonnes of pulp and paper products per annum and employs approximately 17,000 people.