The number of companies ‘cutting off’ their business in Russia is increasing.
Hyundai Motor Company sold a factory in which it invested hundreds of billions of won for 10,000 rubles (about 140,000 won), and Samsung Heavy Industries stopped supplying equipment for liquefied natural gas (LNG) carriers under a contract with a Russian shipyard. The concerns of Korean companies that still have business assets left in the region are deepening.
According to ‘Leave-Russia’ operated by KSE Institute under the Kiev University of Economics in Ukraine on the 28th, there are about 40 major domestic companies operating in Russia. Among these, Hanwha Ocean, Hanjin, Korean Air, HMM, and Hyundai Motor Company closed their local businesses and withdrew.
However, Hyosung, LX Pantos, Hyundai Wia, GS Caltex, Lotte, Hyundai Construction Equipment, POSCO, and SK Enmove are still holding out in Russia. Samsung Electronics and LG Electronics halted operations at their Russian factories last year, but still own these factories. The position is that it will operate again at any time once the war is over and the international community’s sanctions against Russia are lifted.
An official from a company operating in Russia said, “Since the Russia-Ukraine war, local business has virtually been closed,” adding, “However, we cannot give up on business in Russia right away, so we are maintaining our reputation.”
In this situation, trade with Russia is shrinking further. On the 26th, the Ministry of Trade, Industry and Energy expanded the number of export-controlled items to Russia from 477 to 1,159 through the revision of the ’33rd Strategic Materials Export and Import Notice’. Accordingly, export routes for items likely to be used for military use, such as heavy construction equipment, secondary batteries, machine tools, and aircraft parts, are blocked.
Russia immediately warned of trade retaliation. In a briefing on the 27th, Russian Foreign Ministry Spokesperson Mariya Zakharova referred to Korea’s decision to ban Korea’s strengthening of export controls, saying, “It is an unfriendly measure at the request of the United States, and will cause damage to the Korean economy and industry.” He added, “We reserve the right to take non-symmetrical measures on this, so Korea should not be surprised.”
An industry official said, “It is difficult for the risk to be resolved in a short period of time due to the tense positions of the West and Russia,” and added, “A variety of support measures are needed not only for large corporations but also for small and medium-sized enterprises that have suffered damage after entering Russia.”
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.