Firms close operations in Ukraine, assess impact of sanctions on Russia
FILE PHOTO: Cans of Carlsberg beer are seen in a pub. REUTERS/Danish Siddiqui
Brewer Carlsberg, Japan Tobacco and a Coca-Cola bottler were among companies that closed factories in Ukraine on Thursday after the Russian invasion, while UPS and FedEx Corp suspended services inland and abroad. outside the country.
Ukraine closed its airspace as Russian forces attacked in the early hours, leaving low-cost carrier Wizz Air to attempt to evacuate its Ukraine-based crew, their families and four planes stranded in Kiev and Lviv.
Many companies exposed to Russia are waiting for more clarity on Western sanctions and are assessing the impact of those already announced.
Washington on Thursday announced a wave of measures that hamper Russia’s ability to do business in major currencies, as well as sanctions against banks and state-owned companies. He imposed sanctions on the company behind the Nord Stream 2 gas pipeline while European Commission chief Ursula von der Leyen said Brussels would block Russia’s access to key technologies and markets.
Denmark’s Carlsberg, which holds 31% of Ukraine’s beer market, suspended production at its three breweries in the country, while Coca-Cola HBC said it had triggered contingency plans, including closing its beer plant. ‘traffic jam.
Japan Tobacco has closed a cigarette factory in Kremenchuk, central Ukraine.
Japanese auto supplier Sumitomo Electric Industries, which employs some 6,000 people in Ukraine to manufacture wire harnesses, said it suspended operations at its factories from Friday. A spokesman told Reuters the company was talking to customers about the possibility of replacing supplies from other locations.
Global shipping giant Maersk halted calls in Ukraine until the end of February and closed its main office in Odessa on the Black Sea coast while Danish freight forwarder DSV announced it had closed operations in the country.
Europe’s aviation regulator has expanded a safety warning triggered by the attack, advising airlines to ‘exercise caution’ when flying over parts of Russian airspace controlled by regional hubs in Moscow and Rostov.
titanium and neon
Shares of German utility Uniper, which has significant interests in Russia and $1 billion exposure to the recently suspended Nord Stream 2 project, plunged on Thursday and its majority shareholder, Finland’s Fortum, also took a hit.
Fortum said the two companies together own 12 power plants in Russia and employ 7,000 people there, but since power generation has not been sanctioned, their operations have not been directly affected.
Another of Nord Stream 2’s backers, Wintershall Dea, said the fact the project was suspended for political reasons meant its operator could seek compensation.
Shares of German chemicals company BASF, which co-owns Wintershall with Russian billionaire Mikhail Fridman’s LetterOne investor group, and other Nord Stream 2 backers OMV and Engie, were also hit.
Britain’s biggest national bank, Lloyds, warned it was on heightened alert for cyberattacks from Russia, while some firms said supplies of key raw materials could suffer.
Jet engine makers Rolls-Royce and Safran said on Thursday they had increased their titanium supplies. The use of titanium, supplied largely by Russia, has exploded in recent years as aircraft manufacturers attempt to lighten jets.
“We have been observing this situation for several weeks and have decided since the beginning of the year to increase our titanium stocks, in particular via distributors in Germany,” Safran CEO Olivier Andries told the press.
The French company is also looking to diversify its sources of metal, as is Britain’s Rolls-Royce, which said 20% of its titanium comes from Russia.
Major chip companies have said they expect limited supply chain disruption from the dispute for now thanks to stockpiling and diversified sourcing, but some industry sources have said that there could be a longer term impact.
Ukraine supplies more than 90% of America’s semiconductor-grade neon, essential for lasers used in chip manufacturing.
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