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Root NationNewsThe second wave: large manufacturing corporations are leaving Russia

The second wave: large manufacturing corporations are leaving Russia

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About a month after the start of the war, after the first wave of withdrawal from the Russian market, the second wave is coming. During April, it grew and became more obvious. And this time among the companies leaving the Russian market, there are many manufacturing companies, that have factories and productions primarily in the regions, and are often important or even key employers.

There were many manufacturing companies in the first wave, including the German carmakers Volkswagen, Mercedes-Benz, BMW and Daimler Truck, which stopped production in Kaluga and Nizhny Novgorod, in the suburbs of Esipov, Kaliningrad and Naberezhnye Chelny. But in the first days of the war, they announced the cessation of production, leaving open the question of the final exit from Russia.

So far, only Daimler Truck has taken such a step. On March 24, the truck and bus manufacturer announced that it had left the Daimler KAMAZ Rus joint venture. This was one of the first examples of the second wave that began. Its key feature is that Western investors, mainly industrial companies, are finally losing their production base in Russia.

The second wave

In fact, Daimler Truck simply dumped its equipment in the shops of KAMAZ, which faced Western sanctions for the production of military equipment, including one that was used during the invasion of Ukraine.

Also on March 28, two European brewing giants – the Dutch Heineken and the Danish Carlsberg – put up their Russian business for sale. For several weeks, it was thought that Carlsberg had a chance to sell its business to the world leader Anheuser-Busch InBev (AB InBev). However, on April 22, the Belgian concern announced that it was also leaving the Russian market.

Unlike brewers, the German company Dr. Oetker, known for its frozen pizzas, desserts and baking ingredients, did not wait long for a big money buyer – and on April 8 announced that it had sold its plant in Belgorod to its Russian leadership.

Two large French investors in the Russian economy followed a similar path. On April 11, the financial group Societe Generale, announcing the cessation of banking and insurance activities in Russia, and also announced the sale of Russia’s Rosbank to its longtime partner, the company of entrepreneur Vladimir Potanin Interros.

And on April 27 it became known that the automaker Renault “transfers” (apparently, for a purely symbolic amount or free of charge) its 68 percent stake in Russia’s largest carmaker AvtoVAZ in Togliatti to the Moscow Research Institute NAMI, and its plant Renault Russia in Moscow – to Moscow city authorities.

The German manufacturer of household chemicals, cosmetics and personal care products Henkel, is also considering the option of leaving the Russian market, and announced the adoption of this decision on April 19.

Essety

Here are a few more messages from the last one and a half to two weeks. For example, on April 22, the Swedish company Essety, which produces Zewa toilet paper, Libresse women’s pads and Libero baby diapers, announced that it wanted to sell three of its plants due to deteriorating business conditions in Russia. On April 26, Finnish processed cheese maker Valio announced it had sold its plant to a Russian meat company. On April 28, France’s Total Energies announced that it was simply shutting down its motor oil plant in the Kaluga region.

So the second wave of Western companies exodus is clearly happening – and we can expect more companies to leave the troubled market in May. As I said, it’s been three months since the German carmakers Volkswagen, Mercedes-Benz and BMW have stopped production. So sooner or later they will have to decide how long they intend to pay the forced downtime to their workers in factories in Russia’s regions.

You can also help Ukraine fight with Russian occupants via Savelife or via an official page of the National Bank of Ukraine.

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