Timber holding Segezha Group, a leading force in industrial paper bags and lumber production in Russia, has sold its European subsidiary, Segezha Packaging, which brings together seven factories across the continent. The move was reported by RBC, citing comments from Mikhail Shamolin, chairman of Segezha Group. Shamolin answered a RBC inquiry but did not disclose the deal’s price or other terms, stating only that the transaction reflects market conditions.
The Segezha Packaging facilities are spread across Denmark, the Netherlands, Germany, the Czech Republic, Turkey, Romania, and Italy, where they focus on paper packaging production. Collectively, these operations contributed around 1% to the group’s operating income before depreciation and amortization. The report notes that the combined capacity of these European facilities stands at approximately 700 million paper bags per year, while Segezha Group’s total annual bag production capacity reaches about 1.6 billion bags. Last year’s output was around 1.4 billion bags, implying that the European agreement could allow the company to reduce its global production by nearly half if operations are consolidated as planned, according to the source.
In Europe, Segezha Group supplied paper to local factories that produced bags and related packaging products. Since July of the previous year, however, the European Union has imposed a ban on the import of Russian timber products as part of its fifth package of sanctions. This regulatory development has influenced how Segezha Group’s European subsidiaries source materials and manage supply chains, an aspect closely watched by industry observers and market analysts alike. The strategic decision to divest or restructure assets in Europe appears aligned with broader efforts to adjust to evolving sanctions regimes while maintaining the company’s core manufacturing footprint in other regions. Attribution: RBC report referencing Mikhail Shamolin.
Market observers are assessing the implications for Segezha Group’s global production network, particularly how the disposal of European assets may affect capacity utilization, cost structure, and future reallocation of capital toward markets outside the European Union. Analysts point to potential shifts in supplier relationships, currency exposure, and logistics planning as the company reorganizes its European presence in light of sanctions and market dynamics. The broader context includes Segezha Group’s role within the Russian timber and paper sector, where shaping long-term strategy requires balancing domestic strengths with international regulatory realities. The company remains focused on sustaining output levels and leveraging remaining production sites across its international footprint. This ongoing development highlights how global players adapt operations in response to regulatory changes and market conditions, while continuing to pursue efficiencies that support long-term profitability. Source: RBC, with remarks from Mikhail Shamolin.