Uniqlo owner stays put in Russia as Boeing suspends buying Russian titanium
Political pressure is building on companies to halt business in Russia, while operations have also been complicated by sanctions affecting everything from global payments systems to a range of high-tech products.
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Uniqlo owner Fast Retailing will keep its stores in Russia open, joining a small group of international firms that are staying put even as dozens of big brands temporarily shutter operations or exit the country over its invasion of Ukraine.
Political pressure is building on companies to halt business in Russia, while operations have also been complicated by sweeping sanctions affecting everything from global payments systems to a range of high-tech products.
Boeing Co on Monday said it had suspended buying titanium from Russia, since it had sufficient supply for plane production, while European rival Airbus said it was sourcing titanium from Russia and other countries in accordance with sanctions.
Large shippers have suspended container routes to and from Russia and many Western companies, from Nike Inc and home furnishings giant Ikea to energy majors BP and Shell, have closed shop or announced plans to exit the country.
Dutch technology investor Prosus will write off a US$700-million stake in Moscow-headquartered online platform VK Group, known for the VKontakte social network, Russia’s answer to Facebook. VK Group’s CEO Vladimir Kirienko was added to a US sanctions list after Russia’s invasion of Ukraine.
A spokesperson told Reuters the company had seen no noticeable impact on its supply chain or logistics in Russia, where Uniqlo has 49 stores.
“Clothing is a necessity of life. The people of Russia have the same right to live as we do,” said CEO Tadashi Yanai of Japan-based Fast Retailing, in remarks first reported by Nikkei, adding that every country should oppose war.
In contrast, Levi Strauss & Co suspended its Russian operations, including any new investments.
Some American companies are continuing to operate in Russia, including McDonald’s Corp and PepsiCo Inc, prompting New York state’s pension fund – a shareholder in the pair – to urge them and others to consider pausing their operations there.
The conflict may create opportunities, potentially including Europe scrapping a ban on several Brazilian meatpackers imposed in 2018 after a food sector scandal, sources said.
“The (Brazilian) industry is prepared to cover gaps and support the food security of nations that may be short-supplied by the likely suspension or decrease in exports of chicken and pork from Russia and Ukraine,” said Ricardo Santin, president of meat lobby ABPA.
ABPA, which represents companies including JBS and BRF in Brazil, the largest global exporter of chicken meat, said Russia and Ukraine compete with Brazilians in important markets in Asia, the Middle East and Europe.
Major global companies are continuing to join the exit from Russia. The Big Four accounting firms KPMG, PwC, EY and Deloitte moved one by one to cut their ties with Russia, as did credit card company American Express.
Mutual fund manager Vanguard Group has suspended purchases of Russian securities from its actively managed funds, the top mutual fund manager said on Monday.
Dairy cooperative Arla Foods, French yoghurt maker Danone and Belgian chemicals group Solvay also suspended operations or investment in the country, while the RIA Novosti news agency cited carmaker Nissan as saying it would halt production at its factory in St Petersburg.
Russia announced new “humanitarian corridors” on Monday to transport Ukrainians trapped under its bombardment – to Russia itself and its ally Belarus, a move immediately denounced by Kyiv as an immoral stunt.
Russia calls the campaign it launched on Feb 24 a “special military operation.” It denies attacking civilian areas and says it has no plans to occupy Ukraine.
After Russian President Vladimir Putin signed a new media law on Friday, Chinese-owned video app TikTok said it would suspend live-streaming and the uploading of videos to its platform in Russia. Read full story
‘Unjustified attack’
Many companies have strongly condemned Russia’s actions as they suspended services in the country.
“In light of Russia’s ongoing, unjustified attack on the people of Ukraine, American Express is suspending all operations in Russia,” AMEX said on its website.
Netflix, which had already temporarily stopped future projects and acquisitions in Russia, suspended its service “given the situation on the ground”, a spokesperson said.
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