Yesterday (3 March) UPM said that it would “cease deliveries to Russia for the time being”.
In a statement, the Finland-headquartered group said the rapidly evolving situation had “wide-reaching human, political and economic implications in Europe”.
“As a result of Russian aggression against Ukraine, the geopolitical situation in Europe has permanently changed,” UPM stated.
“Our primary concern are the people suffering from the war. UPM is providing support to its employees in the affected areas. We have also started providing humanitarian and material support to Ukraine this week.”
UPM Raflatac has a distribution terminal in the Kyiv region of Ukraine with 13 employees, which has been closed until further notice.
UPM employs 800 people in Russia, most of whom work at its Chudovo Mills plywood and veneers site to the south-east of St Petersburg. UPM said the business, which makes 155,000m3 per annum of plywood and veneer for building, furniture and interiors, was “currently running as usual”.
Compared to Mondi, UPM’s sales in Russia and Ukraine are relatively small, making up approximately 2% of UPM group sales last year.
Less than 10% of UPM’s wood sourcing to Finland originates from Russia.
“While the forest industry is not directly targeted by the international sanctions at the moment, sanctions against the financial sector may impact UPM’s or its customers’ businesses and transactions in Russia,” UPM noted.
Meanwhile, Mondi Group is under increasing pressure to take action over its Russian business.
Today’s Tempus column in The Times said that yesterday’s analyst conference about the Mondi year-end results was “spattered with questions about the situation”.
Columnist William Kay said that in in the present political climate “the company may face calls to suspend, shut or sell Syktyvkar, any of which could have a severe impact [on Mondi’s results].”
Justin Hobson, marketing manager at Fenner Paper, has also called on the industry to message Mondi executives including CEO Andy King and chairman Philip Yea en masse urging them to press pause on their Russian business. Fenner said people should stop buying Mondi’s products until the group takes affirmative action.
“In my opinion we should all be putting Mondi under pressure to suspend production in Russia. It is only by large corporates like Mondi (turnover £5.5 Billion!) exerting pressure such as this on the Russian Government that could make a difference,” Hobson said in a blog post.
Hobson told Printweek: “I’m not anti Mondi, in fact they are a nice company to work with but they should be making a stand, just as Ikea, Toyota and Stora Enso are.”
The situation has resulted in a sharp drop in Mondi’s share price despite the group’s strong financial performance.
Stora Enso announced it was stopping production and sales in Russia earlier this week.
