which French companies have maintained or ceased operations in Russia? – Dismissal
3 weeks ago
Question asked by Bertrand on April 30, 2022
A little more than two months after the Russian invasion of Ukraine began, the position of foreign companies established in Russia remains under close scrutiny. In particular, those who decide to continue their activities there are always accused of helping Vladimir Putin to finance him. “special military operation”. In this context, you are asking us about the fate of French companies.
All around “Russia has established 700 French subsidiaries in various fields, including 35 CAC 40 companies”, counted in the Ministry of Economy and Finance before the war. France, according to the same source, would even look like a “Russia’s largest foreign employer with more than 200,000 employees”. At a point published in March 2021, the state treasury calculated “160,000” people working in 500 French companies operating in Russia. He then stated this “French companies have performed particularly well in the agri-food sector, finance, distribution, energy, the automotive industry, construction and urban services, transport, aeronautics, space and pharmaceuticals.”. According to the State Treasury, Russia was France’s seventh largest market outside the European Union in 2020, with Russian exports reaching 5.2 billion euros that year (at the height of the Covid-19 pandemic).
How did these groups react to the ongoing conflict on Ukrainian soil? Given the number of companies interested, it is impossible to be complete on this issue. However, the calculation of the American university gives an idea of the positions that occupied the main. The list, maintained by a group of Yale University researchers, reflects consistent reports from multinational companies present in Russia of all nationalities.
The list, first published on February 28, four days after the offensive began, has been updated daily since then. The research team claims to be founded “Both in public sources”Media specializing in economic issues, in particular, and “non-public”for example, the company’s internal sources. Originally divided between groups that remained in Russia or left the country, this census is now divided into five categories to better reflect the specific situations of each group.
According to this estimate, which cannot be considered exhaustive and evolving, it appears that eight French companies have so far left Russia completely, while 19 others have suspended all or almost all of them, all but returning. Other French companies have made less radical decisions: four have cut back some of their operations, and twelve have postponed their investment or development projects. Finally, Yale has 23 companies that have not changed anything.
Societe Generale abandoned Rosbank
Among the companies that have officially left, we find, in particular, the French financial player, one of the most popular in Russia today: Société Générale, present through its subsidiary Rosbank, a heavyweight company in the Russian banking sector with 12,000 employees. On April 11, six weeks after the invasion of Ukraine began, the bank announced its withdrawal from Russia, selling its entire stake in Rosbank to a Russian oligarch. After that, in mid-March, Crédit Agricole and BNP Paribas (two much lesser-known players) decided to suspend their activities, and the pressure on Société Générale intensified. Other groups have announced the cessation of operations in Russia: Publicis communications specialist on March 15 or Atos IT leader on April 5.
Renault and Michelin are among the companies that have temporarily left, leaving the door open to resume operations. The former, according to the Russian Minister of Trade and Industry, is negotiating the sale of its stake (68%) in AvtoVAZ, the first Russian manufacturer to produce Lada cars, a leading brand in the Russian market. In 2021, Russia was the second largest market of the Renault Group in the world after Europe, selling almost 500,000 cars (including about 100,000 produced by the French automaker, to which were added 400,000 cars of its subsidiary Avtovaz). As for the Michelin group, on March 15 it announced the cessation of production at its plant in Davidov near Moscow and exports to Russia. With rates far from Renault’s rates: Russia accounts for 2% of Michelin’s total sales and 1% of its world production. The tire manufacturer in the country employs about 1,000 people, including 750 at its production site, who will continue to be paid.
“Start output” for TotalEnergies
TotalEnergies, for its part, has started “Beginning of retreat”, while the energy company is one of the most represented French companies in Russia, a state that accounts for almost 16.6% of its hydrocarbon production (and even 30% on gas alone). The group is a shareholder in 19.4% of Russian gas giant Novatek. It is also involved in Russia through its 20% stake in Yamal LNG, a liquefied natural gas project that began production in 2020, and 10% in the Artic LNG 2 project, which is due to begin delivery in 2023. He has been widely criticized for staying in Russia. On April 27, TotalEnergies announced a $ 4.1 billion asset depreciation, including for Arctic LNG 2. Prior to this recent decision, the group began distancing itself from Russia in March, saying it would abandon from all purchases of Russian oil, diesel fuel and petroleum products no later than the end of the year, and that he will no longer provide capital for new projects on Russian soil.
Saint-Gobain is also one of the companies that has decided to reduce its activities. “Local activities continue to operate, but independently: there are no more import or export flows, products are sold in the local market”, provides a group of building materials. One of the motivations of the companies not to leave Russia for good is the hope to develop there in the coming years. Saint-Gobain, which has eight production sites in Russia and 1,500 employees, announced last year an investment plan of 70 million euros and the opening of four new plants. Looking forward to better days “All these projects are stopped”.
Danone “meets the food needs” of civilians
Other groups, among those still present in Russia, have contented themselves with pushing the boundaries under their investment projects. As well as BlaBlaCar, as stated in a press release on March 10 “put an end to their investment in the country”. The travel distribution company has 25 million Russians. From Danone we explain to support “Currently, activities for the production and distribution of fresh dairy products and baby food, in order to meet the basic food needs of the civilian population”as indicated Release in a recent article. With 7,200 employees in the country and thirteen production sites, the agri-food company generates 6% of its turnover in Russia. If Air Liquide admits it “All options are currently being considered, including the cessation of activities in the country”, a specialist in industrial gas has just suspended its investments and development projects. The company, which has 710 employees and manages 18 industrial facilities in Russia, says that part of its activities cannot be stopped until alternative suppliers are found (among other things, it supplies hospitals with medical oxygen).
The last category of companies: those that continue their normal activities without much change. Lactalis is one of 23 companies listed as such at Yale University. The agri-food group justifies its choice to stay in Russia by filling the shelves of shops where civilians receive supplies. Therefore, its 2,000 employees remain mobilized on the production lines. However, Lactalis has reduced production on certain references, such as whipped cream.
Decathlon closes its stores
Distributors Leroy Merlin and Auchan also rely on their “responsibility” to their Russian employees and civilians. These signs, both owned by the Mullier family holding company, are the main employers among Russians (45,000 employees and 113 stores for Leroy Merlin, 30,000 employees and 232 stores for Auchan). Instead, Russia is a significant market for them (18% and 10% of world sales, respectively). Their detention in the country of Vladimir Putin brought them a rain of criticism from France and Ukraine, President of Ukraine Volodymyr Zelensky went so far as to qualify them as “sponsors of war”. In late March, Decathlon sports equipment specialist, also owned by the Mulliez family, announced that it was closing its 60 stores in Russia, but citing a purely commercial reason: the brand will face supply problems due to “international sanctions”. Decathlon has pledged to continue paying salaries to its 2,500 Russian employees.
In general, according to Yale University researchers, French companies have been more restrained – slower and less sharp – than many of their American or European counterparts. The British oil company BP was the first multinational company to announce its withdrawal from Russia on February 27 (just three days after the Russian invasion) under pressure from London. Then, in early March, it was the turn of American groups to suspend their activities in Russia: Apple, Boeing, Disney, ExxonMobil, General Motors … For many weeks, the Russians no longer had access to products. from Coca-Cola, Starbucks and McDonald’s fast food chain (by then with 62,000 employees and 850 stores nationwide).
Across the European Union, some companies had no choice but to suspend all their exports to Russia due to sanctions imposed by the Twenty-seven. Starting with the luxury giants, forced to embargo on goods for 300 euros and more, introduced in mid-March by Brussels.