Another major Finnish firm exits Russia

Forestry giant UPM has announced the sale of all its operations in the sanctioned country

Finnish forestry holding UPM-Kymmene has finalized its withdrawal from Russia, according to a statement published on the company’s website on Monday.

The firm, which engages in the production of paper, fiber and biofuel, said it had sold all its Russian operations, including the Chudovo plywood mill in Novgorod Region. The buyer of the assets was named as Gungnir Wooden Products Trading, although details of the transaction were not disclosed.

UPM suspended its Russia operations, including deliveries and wood procurement, and halted work at the Chudovo mill in March 2022, citing changes in the geopolitical situation resulting from Russia’s military operation in Ukraine. The company said at the time it feared that sanctions may impact UPM’s business and transactions in Russia, as well as those of its customers.

According to a UPM statement last year, it employed 800 staff in Russia, most of whom worked at the Chudovo mill. The company’s Russian assets made up less than 1% of its total operations. In 2021, roughly 10% of UPM’s wood sourcing to Finland originated from Russia, while sales to Russia and Ukraine brought roughly 2% of its revenue.

UPM’s exit follows the withdrawal of numerous Western companies over the past year, under pressure from their governments as part of Ukraine-related sanctions. Just last month, three Finnish companies – Valio, Paulig, and Fazer – announced their intention to quit the Russian market, claiming that sanctions would negatively affect their operations.

READ MORE: Finnish companies leave Russia amid predictions of significant sanctions impact

According to Yale University calculations, more than 1,000 foreign companies have left Russia since February 2022. They include automakers (Ford, Renault, Toyota), energy majors (ExxonMobil, Shell), banks (Deutsche Bank, Sociеtе Gеnеral, Citi), consulting firms (McKinsey, KPMG), retailers (IKEA), restaurant and hotel chains (McDonaldʼs, Starbucks, Marriott), and clothing brands (H&M, Nike), among others.

Find more stories on economy and finance in TROIB business