Smurfit Kappa purchase extends Russian presence

Paper and packaging giant Smurfit Kappa Group has extended its presence in Russia with the acquisition of a Moscow-based corrugated packaging company for an undisclosed sum.

The company already has three plants in St Petersburg which produce products for customers in Europe. The group said this move will establish it as the leading international corrugated packaging supplier in Russia and enable it to further strengthen its position in the region and broaden its offering to its multinational and local customers.

“Russia is an attractive growth market for us with exciting potential. We are pleased to expand our footprint in this market and, in particular, within the growing Moscow region,” said Pim Wareman, chief executive of Smurfit Kappa North-East Europe.

Smurfit Kappa Group’s share price which was already up by over 15% in the year to date rose over 1% yesterday on the latest news.

Earlier this month, on the back of a mixed set of first half results which included a 5% annualised rise in revenues but a 21% fall in pre-tax profits Smurfit Kappa Group said it will spend more than €400m this year.

However, in May after its AGM in Dublin, chief executive Tony Smurfit said the group was effectively back on the acquisition trail after integrating €186m worth of purchases in 2015.

He said the group could spend up to €1bn without damaging its balance sheet, but said this represented estimated capacity rather than a definite spend target.

Despite challenges seen in the first half of the year, Smurfit Kappa Group said in its interim results that trading has been helped this year by an improvement in corrugated prices in Europe and the Americas.