International Paper to Explore Strategic Options for Ownership Interest in Ilim Group

March 11, 2022 - International Paper today announced its intention to explore strategic options, including the possible sale, of its 50% ownership interest in Ilim Group.

International Paper said that it "has no intention to seek suspension of operations or initiate any liquidation or bankruptcy proceedings with respect to Ilim Group."

Editor's note: History of the JV

In October of 2006, International Paper and Ilim Pulp announced the signing of a letter of intent to establish a 50-50 joint venture, which would be created through International Paper purchasing a 50 percent equity interest in Ilim Holding. At that time, Ilim Pulp, a subsidiary of Ilim Holding, was the largest operator of pulp and paper mills located in the European and Siberian regions of Russia.

The creation of the joint venture, which would operate as Ilim Group, was finalized in October of 2007, when International Paper purchased 50 percent of Ilim Holding for approximately USD 620 million, following the approval earlier that year from the Russian Federal Antimonopoly Service in June and the partners signing a definitive agreement in August.

A key element of the joint venture strategy was a long-term investment program in which the joint venture would invest, through cash from operations and additional debt, approximately USD 1.5 billion in Ilim's four mills over approximately five years.

Today, Ilim Group operates major Russian pulp and paper mills in the Arkhangelsk, and Irkutsk Regions, having branches in Koryazhma, Bratsk and Ust-Ilimsk, as well as forestry branches, procuring raw materials to the production facilities, and two corrugated cardboard plants in the Leningrad and Moscow Regions.

According to information on Ilim's website, the company produces 2.2 million tons per year (tpy) of pulp; 967,000 tpy of board (kraftliner); 320,000 tpy of paper (uncoated and coated grades); and 120,000 tpy of corrugated packaging. Ilim's central office is in Saint Petersburg.

SOURCE: International Paper, Ilim Group