Hundreds of German companies continue to work in Russia – why don’t they give up?

Hundreds of German companies continue to work in Russia – why don’t they give up?

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From: Lisa Mayerhofer

Volkswagen has been looking for buyers for its factory in Kaluga for several months. File photo shows a worker at a factory in 2008. © Friso Gentsch/dpa

After the outbreak of war in Ukraine, many Western companies wanted to leave Russia. Nearly a year later, research shows that more than 90 percent are still there — not always voluntarily.

Munich – Since the Russian army invaded Ukraine several Western companies have withdrawn from Russia. Among them were many big, famous names from Germany, such as Siemens and Deutsche Telekom. It wasn’t until January that it became known that oil and gas company Wintershall Dea was also leaving Russia after almost a year of war – and thus was causing its parent company BASF to lose billions.

Only 8.5 percent of Western companies have withdrawn from Russia

One almost gets the impression that there are no more Western companies in Russia. But this is an illusion, shows a recent study of the University of St. “We were skeptical about the number of companies from Europe and the G-7 countries that have come from Russia,” says Simon Evenett, a study author and trade policy expert at the University of St. Gallen. Süddeutsche Zeitung (SZ). “Then we analyzed based on the data – and we looked at where the territories and subsidiaries were actually sold. And in the vast majority of cases we didn’t see any real withdrawal from Russia.”

According to the analysis, only 8.5 percent of Companies from G7 and EU countries withdrew from Russia and left the country and its subsidiary. According to the authors of the study, however, it was surprising that particularly low-profit companies had gone out of business in Russia.

Most – more than 90 percent – still hold in Russia: Many are still doing business, also because their industry is not affected by the sanctions, or they still have their national company there, but it is no longer working. . According to the analysis, there are a total of 1284 EU or G7 companies. According to the results, most of them are from Germany, around 250 companies.

Volkswagen has been looking for a buyer for its Russian plant for months

The reasons for this can be different – and they are not always related to the calculation of being able to continue doing business. The authors of the study also explain that many Western companies that want to sell cannot find a buyer who is willing to pay the required amount. And this despite the fact that Russia requires companies to sell at least 50 percent below market value.

This includes Volkswagen, for example: The German automaker has been looking for buyers for its plant in Kaluga for several months, reports SZ. In other companies, Russia would delay withdrawal, for example by preventing authorities from transferring earnings abroad.

The companies involved probably do not want to follow the example of Renault and Nissan: They have their production facilities in Russia. sold at a nominal price of one ruble. However, Renault had to write off two billion euros on the Russian business.

And material from dpa