Orange with Media Services, published on Sunday, March 27, 2022 at 07:00
LANDMARKS. According to Bercy, France is the largest foreign employer in Russia, with some 160,000 employees.
Since the beginning of the Russian invasion in Ukraine, some of them have decided to withdraw, but this is far from the case for the majority.
Should French companies leave Russia? Before the Russian invasion of Ukraine, more than 500 French companies (including 35 CAC 40 groups) operated in Russia, according to the French Ministry of the Economy, while the Franco-Russian Chamber of Commerce and Industry claimed “more than 400 members” on its website. In 2020, in the context of Covid-19, exports to Russia reached 5.2 billion euros, making Russia France’s 7th largest market outside the European Unionaccording to Bercy.
Always from the same source, France is the first foreign employer in Russia, with some 160,000 employees, certain groups being particularly present there, like the Renault group, a 67% shareholder in the manufacturer AvtoVAZ (Lada brand).
During his speech to the French Parliament on Wednesday March 23, Ukrainian President Volodymyr Zelensky has asked French companies to leave the country of Vladimir Putina choice that few of them have decided to make so far.
Renault suspends its activities in Russia
While since the beginning of the conflict Renault had not questioned its presence on the spot, the car manufacturer announced in the wake of suspending the activities of its Moscow plant and evaluate “the possible options concerning his participation” in AvtoVAZ, while he has invested heavily in this subsidiary and fears a forced nationalization in the event of departure.
TotalEnergies renounces Russian oil
Another CAC 40 group with a significant Russian footprint, TotalEnergies produces 16.6% of its hydrocarbons in Russia, and even 30% for gas alone, with strong involvement in the Yamal gas field, in the far north of the country. TotalEnergies holds a 20% stake in Yamal LNG, a liquefied natural gas project which started production in 2020, and 10% in Artic LNG 2, which should begin deliveries in 2023. The group also holds 19.4% from the Russian gas giant Novatek.
The CEO of TotalEnergies, Patrick Pouyanné, clearly stated on Wednesday that his group could not give up Russian gas, explaining that it had signed “25-year contracts”. But the group has however announced that it will give up all purchases of Russian oil or petroleum products by the end of 2022.
The environmental candidate for the presidential Yannick Jadot accused the energy company of “complicity in a war crime”, an accusation to which the group responded with the announcement of a defamation complaint against the MEP.
Still in energy, the Engie group, which co-financed the Nord Stream 2 gas pipeline, warned that it risked losing up to one billion euros in this suspended project. On the other hand, it is not present on Russian soil but is a 9% shareholder in the Nord Stream gas pipeline in operation.
Leroy Merlin remains
Another major local employer, Societe Generale, majority shareholder of Rosbank (12,000 employees), a heavyweight in the Russian banking sector. On March 16, its managing director Frédéric Oudéa simply recalled that his subsidiary had “been organized and managed independently after the events in Crimea” in 2014, without giving any indication of the future of the group’s presence in the country. .
On the services side, several brands owned by the Mulliez family are very established in Russia, starting with Leroy Merlin, which is the second largest market behind France, but also Auchan, which generates more than 10% of its sales in Russia, or again the sports brand Decathlon.
Adeo, Leroy Merlin’s holding company, said on Wednesday that it was maintaining its activity in Russia, but was going to “suspend” its new investmentsevoking in a statement to AFP the risk of an “expropriation which would strengthen the financial means of Russia”, if she left the country.
The French pharmaceutical giant Sanofi announced, also on Wednesday, “to stop any new expenditure which would not be directly linked” to the supply of its “essential drugs and vaccines in Russia and Belarus”.
Several sectors have made the opposite choice, such as luxury and fashion. At the beginning of March, Hermès, quickly followed by Chanel, LVMH and Kering, announced the closure of its stores in Russia, certain managers of their brands such as Balenciaga (Kering group) even taking up the cause of Ukraine in the conflict.
But the difficulty is elsewhere for the companies, because Russia has decided to increase the pressure on the foreign groups which would be tempted by a withdrawal, not hesitating to agitate the threat of a nationalization of the assets on the spot.