Emigration from Russia continues, but not all companies go

Siemens’ presence in Russia began when it became a spare parts supplier to Moscow-St. The Petersburg telegraph line in 1851. And it ends 170 years later with the maintenance of the high-speed line between the same cities.

The German industrial giant announced on May 12 that it would withdraw completely from Russia due to its invasion of Ukraine. The company, which before the war had 3,000 employees in Russia, had already stopped making new investments in the country and had already stopped many activities there – apart from railway maintenance. But that branch is now ceasing to exist as well, as a result of sanctions.

After a first wave of company departures, immediately after the raid in late February, it is still seeping in with companies turning down or shutting down activities in Russia. On Monday, French Renault announced that it was selling its stake in Russian carmaker AvtoVAZ – known from Lada – to a Russian car research institute and the city of Moscow. McDonald’s also came that day with the news that they are selling its Russian branch. The restaurants in Russia were already closed.

The more companies leave Russia, the more it is felt whether a company is still active there. Who are they and why?

Also read: The EU wants a total ban on Russian oil

Since the beginning of the war, Yale University has been keeping a close eye on who has left, who has stopped some of its activities – and who has not changed anything at all about its Russian operations.

Those who look at the long list will be the first to notice: the number of big names active in Russia unchanged is limited. A large majority of the large Western companies have at least stopped some of their Russian activities. For example, a supplier such as the fine chemicals company DSM still maintains activities that it considers essential for the food supply in Russia, but it has divested a stake in a small Russian joint venture. Nestlé also only sells ‘essential’ products in Russia and no longer advertises there.

Among the companies still fully present – 217 of the approximately 1,200 that Yale follows – one finds mainly lesser-known and lesser-known names, such as the Greek glass manufacturer Frigoglass – just to name a few. It is also very much about relatively unknown Chinese companies, such as China Communications Construction Bank or China Life Insurance Company.

Hard Rock Cafe and Geox

Still, a dozen well-known western companies are on the list, ranging from Hard Rock Café to shoe manufacturer Geox. It is by no means always clear why they attach so much value to the Russian market. This applies, for example, to the clothing brands Lacoste, Armani and Diesel. According to analysts who have spoken to the British television station BBC, luxury brands such as Armani are often only a few percent dependent on the Russian market. Many competitors have stopped using it, such as the luxury group LVMH. Armani organized a silent fashion show in Milan to celebrate the war.

Some residents see a reason to stay in Russia – for example, a high turnover achieved in the country. This applies, for example, to perhaps the two most famous European stayers: the French DIY chain Leroy Merlin and the French supermarket chain Auchan. They received great international attention for their decision not to change anything about the Russian activities. Ukrainian President Volodymyr Zelensky, for example, urged them to leave Russia, as did the head of the Ukrainian branch of Leroy Merlin.

There are also three Dutch companies on the residency list: TomTom, Aalberts and JDE Peet’s

Both chains are part of the same French holding company, AFM. It is owned by the wealthy Mulliez family. So far, she has not wanted to know anything about leaving, possibly because both chains achieve high revenue in Russia: for Leroy Merlin, about 18 percent of worldwide revenue, with Auchan 10 percent. Together they have about 400 branches and thousands of employees. Decathlon, also owned by AFM, has left Russia but achieved a much smaller share of revenue there.

Sometimes there are also smaller stayers with a clear interest in Russia. The Belgian steel company Bekaert recently expanded a factory in Lipetsk, Russia.

And then there’s the Chinese taxi app Didi. He announced that he was traveling after the invasion, but returned to Russia under pressure from the Chinese government.

Also read: What do Dutch companies do with business in Russia?

Also on the list are three Dutch companies: TomTom, JDE Peet’s (parent company of Douwe Egberts) and the industrial group Aalberts. TomTom says in a response that it has terminated the relationship with some customers in Russia that the company “is looking at options for the few contracts we still have”. In Moscow, it still has 34 employees who will continue to maintain the navigation map of Russia.

Aalberts and JDE Peet’s did not answer questions on Monday NRC sent Friday. In 2020, according to its own annual report, Aalberts generated 11 percent of its revenue from the Eastern European region, including Russia. According to the annual report for 2021, JDE Peet’s gets 5 percent of its revenue from Russia and has a large production site in St. Petersburg.

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