Evaluating the situation in the Russian economy, State Duma Chairman Vyacheslav Volodin said that 75.9 percent of foreign companies remain in Russia.
“This decision speaks volumes: they believe in good prospects for the development of our country’s economy, they are satisfied with the business environment. Those who left suffer billions of dollars,” wrote Volodin on his Telegram channel.
He also stated that the vacant gaps were filled by domestic companies, increasing their production volumes.
According to the Chairman of the State Duma, the production of clothing in Russia increased by 42 percent, and the production of medicines by 15 percent.
“It is important that the business world is nationally oriented, that the funds earned remain in the country and are used for the development of the country,” said Volodin.
In August, a spokesperson for the lower house of parliament reported that about 77.6% of foreign firms remaining in Russia remained. According to him, a total of 1382 people worked in the country.
On January 8, President of the Chamber of Commerce and Industry, Sergey Katyrin, said that only a quarter (25%) of Russian companies that lost their Western partners leaving the market were able to find new ones. At the same time, according to him, the sanctions negatively affected the work of more than 60% of domestic companies.
He called for expanding legal support for entrepreneurs and helping businesses find new partners in foreign trade. In particular, he talked about a recent business mission in Iran with the participation of 100 representatives of various companies from the Russian Federation.
How many companies left the market?
After Russia declared a military operation in Ukraine and imposed sanctions on Moscow, foreign companies began to withdraw from the Russian market. In particular, McDonald’s, Coca-Cola, Apple, Siemens, H&M, Lego, IKEA, Mercedes, Ford, Toyota, Nokia, Electrolux and other large companies announced that they are withdrawing or suspending their activities.
According to the report of the Center for Strategic Studies “The picture of foreign business: you can’t go, you can’t go”Organized in October from the 600 largest foreign companies operating in Russia (with revenue of 5.7 billion rubles), 34% restricted activities in the country. Another 15% decided to leave the Russian market by transferring the business to its new owner, and 7% announced that they had withdrawn completely without selling the business.. It is worth noting that the report does not take into account the situation after the declaration of mobilization and only includes data up to September 2022.
According to the report, the oil and gas, banking, automotive and food sectors were the most affected by the withdrawal of foreign companies. Microelectronics, business and IT services suffered the least.
Experts state that 61% of the companies that announced their withdrawal are engaged in the production of technologically simple goods and services, and the remaining 39% are complex production. Analysts note that it is difficult to produce these goods and services in Russia due to the lack of technology, raw materials and professional competence.
Many foreign organizations suffered financial losses as a result of the restriction or withdrawal of their activities. According to the CSR, company exit in terms of GDP is the largest over the economies of Finland (minus 2% of GDP), Sweden (minus 1.5%), the United Kingdom (minus 1.3%) and Denmark (minus 1). has had an effect. %).
The authors of the report recalled that in order to minimize losses due to the “hard” exit of foreign companies, Russian authorities announced parallel imports of goods from the list created by the Ministry of Industry and Trade. However, according to CSR calculations, the brands of 25% of large foreign companies that have decided to exit the Russian market are not included in this. In total, there are more than 100 such brands.
The volume of goods imported into Russia through parallel imports exceeded $20 billion, FCS reported in December. Most often, cars, machine tools, equipment, technological lines and light industry products were imported into Russia through parallel imports.
Affected sectors
The departure of foreign companies had a significant impact on the work of the automotive industry. In 2022, 45 automobile brands left the country. Currently, there are only 14 manufacturers operating in Russia, three of which are domestic and 11 are Chinese.He draws attention to the newspaper “Izvestia”.
According to the Russian Association of Automobile Dealers, by the end of 2022, about 20-30 thousand new cars of foreign brands remained in the warehouses of Russian car dealers. Basically, these are expensive Chinese cars. He said the biggest deficit was seen in Korean, Japanese, French and German mid-range cars (Kia, Hyundai, Toyota, Renault and Volkswagen).
In 2022, retail real estate set a record. The total area of shopping centers opened annually in Russia has become minimal in the last five years.
While summarizing the results of the year, Ivan Fedyakov, General Manager of the INFOLine consulting agency, drew attention to the decline in retail trade. Compared to 2021, the decrease in the physical food segment was 4.3% and in the non-food segment, 14.3%. The most significant decrease is observed in the household appliances and electronic goods category by approximately 30%, and in the clothing and footwear category by over 20%.
At the same time, as reported by the Retail Business Association, domestic food manufacturers shelved one of every seven imported brands.