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27 Mar, 2023 14:43

IKEA completes sale of Russian factories

All of the company's production facilities in the country have been acquired by local entities
IKEA completes sale of Russian factories

Swedish furniture giant IKEA has completed the sale of its last remaining production site in Russia, a furniture factory in Novgorod Region, the company announced on Monday. The facility was purchased by a local firm, Invest Plus. The parties did not disclose the price tag for the factory or any details about the terms of the deal.

Ikea Industry Novgorod was IKEA’s largest Russian factory, with a production capacity of more than 500,000 cubic meters of polished chipboard and over 7 million cabinets and kitchen furniture units per year. According to Invest Plus’s press service, the company plans to relaunch production at the site within the next 2-3 months.

The process of concluding the deal was not easy and quite lengthy… Our goal is to return the highly popular and quality production of the Novgorod factory to Russia's furniture market as quickly as possible,” Invest Plus CEO Vadim Osipov said in a statement about the deal.

Two other IKEA factories in Russia, in Leningrad and Kirov Regions, were acquired by the Russian timber company Luzales earlier this month. According to the Kommersant newspaper, the total value of the three acquisition deals amounted to roughly 15 billion rubles ($196 million).

All of the deals were made with the approval of the Russian government, which is currently a requirement for any company from an ‘unfriendly’ country – referring to those that imposed Ukraine-related sanctions against Russia – that wishes to exit the Russian market.

IKEA joined a number of international companies in halting business activities in Russia due to the sanctions imposed on the country in March of last year. The company then pledged to sell all of its property in the country, including its factories. Last summer, it briefly reopened its stores for an online fire sale.

With the factories now sold, IKEA no longer has any production sites in Russia.

For more stories on economy & finance visit RT's business section

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