Doing business with Russia – Only 2 domestic companies have withdrawn


Immediately after the outbreak of the Russian offensive war in Ukraine, numerous Western companies announced their withdrawal from operations in Russia – including some from Austria. Research by the Kyiv School of Economics (KSE) shows that only two domestic companies have actually taken this step. Austrian companies are therefore still considerably more loyal to Russia than companies from other countries.

The balance sheet almost a year after the start of the invasion paints a truly devastating picture: of the 63 Austrian companies mentioned, only two have left the Russian market since February 24, nine have announced an exit, 43 want to stay. Only the packaging company MM Packaging and the energy company Petro Welt Technologies have completely left the country.

The other companies are mainly active in the construction and architecture, consumer goods and clothing, finance and payment services sectors.

Operations support the Russian economy
The background to the Ukrainian study is an investigation into voluntary “self-sanctions” by Western entrepreneurs, which experts see as a relevant factor for Russia’s future economic prospects. An open-source database from Kiev University recorded 3,078 international companies with Russian operations, of which five percent have left Russia in recent months and 38 percent plan to do so.

According to Ukrainian experts, 39 percent of all international companies surveyed currently want to remain in the warring state. For companies from Austria, the latter applies to 65.6 percent.

Planned exits with little effect
According to the KSE Institute, in 2021, 63 Austrian companies provided jobs for at least 20,945 people in Russia and generated an annual turnover of 2.4 billion dollars (about 2.4 billion euros), paid 124 million dollars (124 million euros) in taxes . They also had $2 billion in capital and $27 billion in assets.

However, the effect of the other nine planned exits on the Russian economy is rather small. Together they employed only 1781 people in 2021 and generated an annual turnover of 127 million euros.

WKO advertised an event in Moscow
Also a social event of the Foreign Trade Center of the Austrian Federal Economic Chamber (WKO) in Moscow, located at the Austrian embassy, ​​illustrated that Austrian companies are still present. A cross-country skiing event was held in the Moscow area on January 27: “All Austrian companies with their own presence or business interest and their local partner companies are welcome!” read the chamber’s website – the event was canceled after criticism in the social media Media but has now been taken offline again.

As a sponsor of equipment and trainers, Fischer Sports Russia was named – a company that also has plans to exit the market, according to the listing. NEOS MP Helmut Brandstätter described the event on Twitter on Wednesday as “an embarrassment for Austria” and announced parliamentary inquiries at the Foreign Ministry and the Economics Ministry.

Local businesses are still welcome
Despite Austria’s status as an “unfriendly state”, domestic companies are sometimes treated very well: for example, in 2022, the largest bread combination in Sochi in southern Russia ordered goods on a larger scale from backaldrin International The Kornspitz Company, with its top manager Wolfgang Mayer honorary consul of the Russian Federation in Upper Austria.

Source: Krone


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