Evolution of comfort (formerly Essity in Russia)

History

2024: Change of company name to "Evolution of comfort" and Russification of brands in the Russian Federation

In June 2024, Essiti, which produces products in Russia under the Zewa, Libresse, Tork and TENA brands, changed its name to Evolution of Comfort. She also announced the transfer of her brands in the Russian Federation to names in Cyrillic.

2023

Sale of Russian business to New Technologies for $117 million, final withdrawal from the Russian market

On July 17, 2023, the Swedish company Essity, which produces goods under the brands Zewa, Libresse and Libero, announced its final withdrawal from the Russian market. Assets in the Russian Federation were sold to the New Technologies company, owned by entrepreneur Igor Shilov. The transaction cost amounted to 1.2 billion Swedish crowns ($117 million, or 10.6 billion rubles at the exchange rate as of July 17, 2023).

According to two sources familiar with the deal, Businessman"" the new owner of Russian assets Essity is likely to receive the right to use all brands present on the local market for a certain period.

Essity finally leaves the Russian market

By July 2023, Essity has three plants in, Russia including facilities in Svetogorsk, Leningrad Region Sovetsk and Venev. Tula region As explained in, Ministry of Industry and Trade after the transfer of control to Russian shareholders, Essity enterprises will continue to work. The ministry assured that this will not affect the range and volume of products and will not affect its cost. Jobs will also continue. In 2022, Essity sales in Russia accounted for only "2% of total consolidated net sales."

Economist Denis Raksha said that Russian citizens will not be left without toilet paper after the departure of the Swedish company Essity from the Russian market. According to him, after the sale of the Essity business, which, among other things, produced toilet paper of the Zewa brand, the factories will operate under new management. Raksha stressed that the same products will be available in Russia, but it will be produced under a new brand.

According to the SPARK-Interfax system, by mid-July 2023, New Technologies LLC is 94.5% owned by United Medical Group shareholder, the main owner of multidisciplinary clinics EMS Igor Shilov, and another 5.5% - by the general director of the network of clinics Andrei Yanovsky.

Pyotr Bobrovsky, executive director of the Association of Manufacturers of Perfumes, Cosmetics, Household Chemicals and Hygiene, calls Essity a significant player in the segment of sanitary and hygienic products. According to him, the Russian division has opportunities for further development in the market after the sale of business, taking into account the high level of localization.^[1]

Announcement of the transfer of Russian business to local shareholders

The Swedish manufacturer of hygienic products Essity, which produces, among other things, Zewa toilet paper and Libresse pads, transferred the Russian business to local shareholders. This was reported on June 10, 2023 by the Ministry of Industry and Trade. The department assured that jobs will be saved.

Essity decided to leave the Russian market and transfer the right to manage production facilities to Russian shareholders. The activities of the enterprise will continue, the Ministry of Industry and Trade said in a statement.

Essity transferred Russian business to local shareholders

The Ministry of Industry and Trade of Russia is aware of the situation and is closely monitoring the process of transferring rights and the further work of enterprises, being in constant contact with the new owners, they said.

Essity's website says the company has signed an agreement with the buyer, and the deal is now approved by the Russian authorities. The deal is expected to be completed in the second quarter of 2023.

The overall impact on profit will be reported after the sale is completed, but it is expected that it will not have a significant financial impact, the company noted.

Essity also clarifies that its withdrawal from the Russian market began in April 2022, while the company's assets in Russia over the past year were depreciated by about 1.7 billion Swedish crowns (approximately $157 million). The company also clarified that in 2022, Essity sales in Russia accounted for approximately 2% of its total sales.

Among the products Essity makes are Libero baby diapers, Libresse feminine hygiene products, TENA incontinence products, toilet paper, paper towels, Tork handkerchiefs and wipes, and antiseptic hand gels and soap. The company began working in the Russian Federation in 1994, about 1300 employees worked in the Russian division.^[2]

2022: Withdrawal from the Russian market

On April 22, 2022, Swedish Essity, which produces Zewa toilet paper, Libero baby diapers and Libresse pads, announced its withdrawal from the Russian market. The manufacturer has already begun to suffer losses, but losses due to the decision to curtail activities in the Russian Federation will be small, since sales in Russia account for only 2% of Essity's total revenue.

{{quote 'Conditions for doing business Essity in Russia have worsened. The company's assets in the country have depreciated by about 1.4 billion Swedish crowns (about $147 million). In addition, work has begun to exit the Russian market, - said the head of the company Magnus Grot, whose words are quoted in Essity's quarterly reports. }}

Toilet paper manufacturer Zewa: due to the deterioration of business conditions in Russia, we lost $147 million and are now leaving the Russian Federation

Groth also warned of rising prices for the company's products:

{{quote 'We have raised prices substantially and there will be further increases in the coming quarters. In addition, we agreed to increase prices with customers in Europe to compensate for the sharp increase in energy costs. }} By April 2022, the Russian division of Essity employs about 1,300 employees. At the same time, the company does not specify what will happen to this personnel after the shutdown of activities in the Russian Federation.^[3]

2021: Revenue in Russia 2% of total sales or $295 million

In 2021, revenue in Russia amounted to about 2% of total sales, which is approximately 2.8 billion kronor (295.32 million dollars).

2010: Opening of two factories in the Tula region

In 2010, two factories of the company were opened in the Tula region. Zewa and Tork products are produced in Sovetsk. And in the city of Venev there is an enterprise for the production of personal hygiene products (children's diapers of the Libero trademark, adult diapers of the TENA trademark and women's pads of the Libresse trademark).

1994-1998

Essity began operating in Russia in 1994. In 1998, the company acquired a factory for the production of sanitary and hygienic products in Svetogorsk, Leningrad Region. There is a wide range of paper products of the Zewa and Tork brands.

Notes