IP, Ilim Group to invest $1.5B in Russian mills

Business Materials 7 October 2007 13:22 (UTC +04:00)

International Paper Co. and Ilim Holding S.A. have completed a joint venture, the largest foreign-domestic alliance in the Russian forest sector, which will operate as Ilim Group.

International Paper purchased 50% of Ilim Holding S.A. for $620 million. The Russian Federal Antimonopoly Service approved the deal in June and the partners signed a definitive agreement in August.

Part of the joint venture's strategy is to invest $1.5 billion in Ilim's four mills over the next five years, increasing production capacity and allowing for new product development.

IP's pulp and paper mill in Svetogorsk, Russia is not part of the joint venture.

Paul Herbert, former IP senior vice president, has been named the joint venture's chief executive officer.

Based in Memphis, International Paper is the world's largest pulp and paper producer, with total capacity of 17.2 million tons and 69,000 employees in operations across 40 countries. It employs approximately 2,500 people in the Memphis area. ( bizjournals )