Essity considering sale of Russian business, factories still working

MOSCOW. April 22 (Interfax) - Sweden's Essity, which produces health and hygiene products under the brands Libresse, Libero, Lotus, Zewa, and others, has said that it is leaving the Russian market and is considering among other options selling its business.

"The company Essity has commenced actions to exit the Russian market [...]. The exact means of exiting have not yet been determined and will be extensively prepared within the framework of the work begun. Essity is considering all options, including sale," Essity LLC CEO Karen Akopyan said in a statement circulated by the company's press service in Russia.

Essity's factories in Russia are continuing to operate as usual, and its 1,300 employees in Russia will continue to work and receive their salaries until a final decision is made, Akopyan said.

"We are continuing to sell our products in the territory of Russia. We are not considering parallel imports," he said.

Essity said on Friday that it was planning to leave the Russian market. The conditions for doing business in Russia have worsened, and as a result, the company has written off 1.4 billion Swedish kronor in asset impairments, around $147 million at the current exchange rate.

Essity's remaining assets in Russia are assessed at approximately 1.3 billion Swedish kronor and include accounts receivable, inventory, and cash assets and their equivalents.

Essity has three factories in Russia. It acquired a factory to produce sanitary and hygienic products in Svetogorsk in the Leningrad region in 1998. Today the factory produces an assortment of paper products for the brands Zewa and Tork. Two factories were opened in the Tula region in 2010, one in Sovetsk where paper products for the brands Zewa and Tork are produced and the other in Venyov where personal hygiene products are produced, including diapers for children for the brand Libero, adult diapers for the brand Tena, and Libresse sanitary pads.

According to the SPARK-Interfax analytical system, Essity LLC's revenue to Russian Accounting Standards rose 8% to 31.6 billion rubles in 2021, while it had a net profit of 2.23 billion rubles compared to 2.02 billion rubles in 2020.