Business 4 March 2022, 2:45pm

Putin says Russia will even benefit from foreign partners pulling out

Portfolio

Russian President Vladimir Putin had once said "the breakup of the Soviet Union was the greatest geopolitical tragedy of the 20th century." On 24 February, he ordered Russian troops into eastern Ukraine on a "peace-keeping" mission, which has quickly turned into an all-out invasion of the country, with indiscriminate attacks on civilian areas and the shelling of Europe's largest nuclear plant. If he really longs for the 'good ole' days' and wants to revive the Soviet Union, he is doing a good job. Western sanctions are crippling the Russian economy and global companies covering virtually every sector from finance, through shipping to social media and entertainment, are pulling out by the dozen.

Putin envisions benefits as world shuns Russia

Eight days after Moscow sent forces into Ukraine, President Vladimir Putin on Friday urged Russia's neighbours not to escalate tensions.

We will still solve the tasks that are before us and in the end we will benefit from this, as we will acquire additional competences,

the Russian president said, speaking via videoconference at a ceremonial raising of the national flag to mark the opening of a new ferry in Kaliningrad.

PUTIN HAS COMPLETELY IGNORED THE UNDENIABLE FACT THAT WESTERN COUNTRIES ARE IMPOSING SANCTIONS ON RUSSIA BECAUSE OF RUSSIA'S INVASION OF UKRAINE.

Here's a list of the enterprises that are pulling out of Russia, cutting links with their partners or selling assets there. And this story is still unfolding as Putin - who appears to be completely unhinged and seemingly no longer in touch with reality - claims his country does not have “any bad intentions towards our neighbors” while also warning them “not to escalate the situation” or impose further restrictions.

Airbnb is suspending its operations in Russia and Belarus. Airbnb CEO Brian Chesky, whose Twitter account currently displays the blue and yellow Ukrainian flag, announced on Friday.

Italy's largest insurer Generali is closing its Moscow office and will wind down Europ Assistance in the country, and Intesa Sanpaolo, Italy's largest bank, is reviewing its presence in Russia.

“The war in Ukraine has both a huge human impact and is resulting in serious disruptions to supply chain and trading conditions, which is why the company groups have decided to temporarily pause IKEA operations in Russia,” the Swedish furniture giant said in a statement on Thursday.

The decision has a direct impact on 15,000 IKEA co-workers.

Under the decision

IKEA will pause all export and import in and out of Russia and Belarus;
it will pause all IKEA Industry production operations in Russia. (This also means that all deliveries from all sub-suppliers to these units are put on hold.);
Ingka Group will pause all IKEA Retail operations in Russia, while the shopping centre Mega, will continue to be open to ensure that the many people in Russia have access to their daily needs and essentials such as food, groceries and pharmacies.

IKEA Foundation, funded by Ingka Foundation, has today announced an immediate donation of €20 million for humanitarian assistance to those who have been forcibly displaced as a result of the conflict in Ukraine.

In addition, Inter IKEA Group and Ingka Group are initially granting €10 million each to provide support in products and other assistance to UNHCR, Save the Children and other organisations working in the local markets.

Business software giant Oracle said on Wednesday it has suspended all operations in Russia.

Rival SAP SE announced it would pause all sales in Russia. SAP in a blog post on Tuesday called economic sanctions against Russia "an important mechanism in the efforts to restore peace."

"We are stopping business in Russia aligned with sanctions and, in addition, pausing all sales of SAP services and products in Russia," Chief Executive Christian Klein wrote.

H&M, the world's second-biggest retailer, has said it is temporarily suspending all sales in Russia due to the invasion of Ukraine. In an official statement, the Swedish retailer said it stands "with all the people who are suffering".

Spotify has followed the example of other US tech giants, closing its Russian office and removing Russian RT and Sputnik content from its platform. However, it added that “it’s critically important to try to keep our service operational in Russia to allow for the global flow of information.”

Netflix has shut down four of its projects in Russia, including content production and put acquisitions on hold.

As of 1 March, Netflix was to be legally obliged to broadcast 20 free-to-air Russian television stations if it wanted to continue to operate in the country. It declined. “Given the current situation, we have no plans to add these channels to our service,” the company said.

Japanese car makers have also taken action, with Honda suspending exports of cars and motorcycles to Russia after difficulties with delivery and payment.

Toyota, the leading Japanese car brand in Russia, is also suspending its sales in Russia. Its plant in St Petersburg, which produces 80,000 vehicles a year and employs around 2,600 people, will also close.

Among other Japanese brands, Mazda Motor Corp, which sold 30,000 cars in Russia last year, said exports of parts to its joint venture plant in Vladivostok would end soon.

Mitsubishi Motor Corp may suspend production and sales in Russia, it said, citing potential supply chain disruptions as a result of sanctions on Russia.

Nissan Motor Co , which sold 53,000 vehicles in 2021, said it was continuing operations in Russia for now while monitoring the situation there.

Volkswagen announced on Thursday that it would not only suspend sales but also production in Russia, with immediate effect. Volkswagen has plants in Kaluga and Nizhny Novgorod.

U.S. oil giant ExxonMobil has announced on Tuesday that it will discontinue its operations at a major liquefied natural gas export facility in eastern Russia (Sakhalin-1) and halt any new investments in the country. Exxon's Russia assets were valued at USD 4.055 billion in its latest annual report, filed in February.

Boeing will suspend the supply of spare parts, maintenance and technical support to Russian airlines and shut down its Moscow operations, the company said. One of the world's largest aircraft manufacturers announced a day earlier that it was suspending operations at its training centre in Moscow.

Airbus has also stopped supporting Russian airlines and is no longer sending parts to Russia, but added that it was still investigating whether its engineering centre in Moscow could provide services to local customers under Western sanctions.

Harley-Davidson is halting its motorcycle shipments to Russia. The full statement from a company representative reads: “In light of the crisis in Ukraine, Harley-Davidson has suspended its business in Russia and all shipments of its bikes to the country. Our thoughts continue for the safety of the people of Ukraine and those impacted by the crisis.”

Harley did not respond to a request for additional details on the suspension or the size of its operations in Russia. Russia's President Vladimir Putin has been photographed riding Harley-Davidson bikes, and joined a gathering of bikers in Ukraine in 2010.

Europe is Milwaukee-based Harley's second-largest market for retail sales of bikes after the United States.

Ford, which has 50% stakes in three Russian plants, told its joint venture partners that it is suspending its operations in Russia. It said it aims to minimise the impact on its operations and maintain worker safety.

“The situation has compelled us to reassess our operations in Russia. In recent years, Ford has significantly wound down its Russian operations, which now focus exclusively on commercial van manufacturing and Russian sales through a minority interest in the Sollers Ford joint venture. Given the situation, we have today informed our JV partners that we are suspending our operations in Russia, effective immediately, until further notice.”

Ford Fund is also making a $100,000 donation to the Global Giving Ukraine Relief Fund for humanitarian aid to assist Ukrainian citizens and families who have been displaced during this crisis.

After recently stopping Apple Pay service in Russia after a US sanction on Russian banks, Apple has also halted all sales of its products in Russia. The company does not have any physical stores in Russia and normally ships its phones, computers and tablets through its online stores, and also sells products through third-party retail stores there.

When it comes to Apple, however, Russia is likely even less relevant. According to estimates, Apple’s Russia revenues in 2020 reached 266 billion rubles, or about $2.5 billion. While this could seem like a huge number to many companies, it represented less than 1% of Apple’s total sales that year, The Street reported.

Nike Inc said on Thursday it would temporarily close all its stores in Russia, joining a slew of Western brands that have suspended their businesses in the country following Moscow's invasion of Ukraine.

Warner Bros, Disney and Sony have halted the release of films in Russian cinemas, after the invasion of Ukraine. The announcements mean the releases of major movies The Batman, Turning Red and Morbius will now not go ahead as scheduled in the country.

Global bank HSBC, France’s Société Générale and South Korea’s Shinhan Bank have all wound down their relationships with a host of Russian banks, putting Western sanctions on interbank messaging system SWIFT into practice.

U.S. payment card firms Visa Inc and Mastercard Inc have blocked multiple Russian financial institutions from their network, complying with government sanctions imposed over Moscow's invasion of Ukraine.

The government sanctions require Visa to suspend access to its network for entities listed as Specially Designated Nationals, a source familiar with the matter told Reuters. The United States has added various Russian financial firms to the list, including the country's central bank and second-largest lender VTB.

Maersk announced on Friday it is “keeping a close eye on developments and making necessary adjustments in line with the latest restrictions.”

Off the back of newly imposed sanctions, Maersk has now temporarily suspended new intercontinental rail bookings without exception both east and westbound between Asia and Europe until further notice.

It has also suspended all new air bookings to and from Russia and Ukraine until further notice.

Singapore-headquartered container shipping company Ocean Network Express (ONE) on Monday suspended bookings to and from Russia.

Hapag Lloyd announced last week that it was temporarily suspending bookings to Russia and has also stopped flights to Ukraine.

Major car and truck manufacturers, including Volvo and General Motors, have also stopped exports to Russia, even though the two companies together only sell around 12 000 vehicles a year in Russia.

Daimler Truck has suspended all cooperation with Kamaz, Russia's largest truck manufacturer. No more trucks will be built and no more parts will be supplied under their joint partnership.

Mercedes-Benz Group is also exploring legal options to sell its 15% stake in Kamaz as quickly as possible.

German automotive supplier ZF Friedrichshafen has also stopped all deliveries to Russia.

Google is blocking YouTube channels connected to state-affiliated media outlets Russia Today (RT) and Sputnik across Europe.