Russia nationalizes Silgan Holdings Austria assets to seize packaging production facilities
16 Jul 2024 --- Russian President Vladimir Putin has signed a decree ordering the temporary seizure and nationalization of Silgan Holdings production sites. The prominent metal packaging manufacturer owns two plants, one in the Moscow region and one in the Adygea Republic, which are now under the Kremlin’s state supervision.
The move follows an earlier decree, signed in April, allowing the government to take control of any foreign business when deemed necessary to state security and national interests. The move began with the seizure of two energy firms, one headquartered in Germany and another in Finland.
Silgan Holdings is based in Connecticut, US, and has over 100 packaging and consumer goods manufacturing facilities across North and South America, Europe and Asia. The company’s annual net sales were estimated to be roughly US$6 billion in 2023. However, its Russian operations have declined significantly since the outbreak of war in Ukraine.
While the company’s Russian plants have a potential production capacity of 350 million containers per year, by last year they were reported to be almost entirely inactive.
Revenue dropped from 4.3 billion rubles (~US$49 million) in 2021 to 3.6 billion rubles (~US$41 million) in 2022. Overall income is estimated to have plummeted to just 15 million rubles (~US$171,000), and the company incurred a net loss of 312 million rubles (~US$3.5 million).
Between 2021 and 2022, Silgan Holdings’ Russian shares dropped by 5%.
Since Russia invaded Ukraine in February 2022, numerous packaging companies have exited the country. Mondi sold its last remaining facility in Syktyvkar for €775 million (~US$826 million), Huhtamaki sold all its operations for €150 million (US$150 million) and multiple forestry standards associations retracted certifications from Russian-sourced fiber materials.
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