Moscow temporarily nationalizes packaging giant’s assets
Russia has temporarily nationalized the assets of metal packaging manufacturer Silgan Holdings Austria. According to a decree signed by Russian President Vladimir Putin on Thursday, the Russian assets of the company have been transferred under state supervision.
All of the shares in two plants owned by the Austrian arm of the US company – Silgan Metal Packaging Stupino in Moscow Region, and Silgan Metal Packaging NM in Adygea – have been handed over to the Russian Federal Property Management Agency following the presidential decree.
Silgan Holdings is a Connecticut-based manufacturing company which produces consumer goods packaging and has more than 100 manufacturing facilities operating in North and South America, Europe, and Asia. The company’s annual net sales were estimated at about $6 billion in 2023.
In Russia, business activity at both plants has seen a steep decline over the past two years. In 2022, overall revenue slid to 3.6 billion rubles ($41 million) from 4.3 billion rubles ($49 million) in 2021. Last year, Silgan’s Russia-based plants with a total capacity of 350 million containers annually were essentially idle, according to financial records. The overall income totaled 15 million rubles ($171,000), while its net loss reached 312 million rubles ($3.5 million).
Silgan’s share in the Russian metal packaging market declined from 15% in 2021 to 10% in 2022, and manufacturing was completely stopped last year.
Last April, the Russian president signed a decree allowing for the temporary takeover of foreign assets deemed critical for the country’s security and national interests. The transfer of Silgan’s assets under the trusteeship means that the state agency will act as a shareholder and make management decisions.
Dozens of foreign companies have left the Russian market as a result of sanctions pressure since the start of the Ukraine conflict in February 2022. Like the sanctions themselves, the companies’ departure was intended to weaken the Russian economy.
However, the situation has played into the hands of Russian businessmen, especially due to divestment rules the government introduced last year. Firms exiting Russia are required to sell their assets at a 50% discount, while also needing to obtain government permission for the sale, and are required to pay a mandatory fee to the Russian budget.
