Just a few weeks before the start of the conflict in Ukraine, this was the last inauguration of a French factory in Russia. In December 2021, Monin syrups were even supposed to bring a little sweetness to the Franco-Russian relationship. “We don’t do politics. We come where there is business. Full stop! » smiled then Olivier Monin, president of the family company which markets more than 3 million bottles of syrups per year in Russia, and had just invested 25 million euros for a production close to Moscow.
He then hoped for an annual growth of 20% and a return on investment from the fifth year. Two months later, the launch of “special military operation” of the Kremlin in Ukraine, according to the official understatement, put an end to these beautiful economic prospects. For Monin syrups. As for all the French companies having bet on the potential of Russia.
A year later, Monin and most French investors are keeping a low profile. The syrup factory is shut down and management is considering “every possible perspective”according to a source close to the company. “Continuation of activities, takeover by management, transfer to a third company… The French, perhaps more than other Europeans, procrastinate and zigzag in their strategy. With one priority: to stay off the media and political radar to avoid any external pressure that would scuttle the slightest project, maintenance or sale”confides an observer in Moscow, well informed on the situation of European companies, on condition of anonymity.
A “big mess”
Many branch managers speak up and share their blues. But none want to be quoted or their company name published. “One day or another, the war will end. There will be an after. You have to prepare it. In the meantime, it’s a double penalty…”thus grimaces among others a binational entrepreneur, torn between two cultures, saddened by “this big mess for economic cooperation between Russia and Europe”.
Far from the networks of fanatic supporters in favor of Vladimir Putin’s Kremlin, frolicking in the French community in Moscow, he strongly condemns the offensive. “What Putin did in Ukraine is horrible and ultimately against Russia’s interests”he regrets. “But in France, we are perceived as a bastard who agrees to stay in Moscow. And in Russia, we are seen as a traitor condoning Western sanctions”he notes, bitterly.
“The current stalemate in the war is the worst situation. Because there is no clarity. European companies are in a weak position. And the Russian authorities take advantage of it! », worries a subsidiary manager. The slightest transfer of activities by a Westerner must indeed receive the authorization of the special commission created by the government. The obstacles are more and more numerous, the deadlines longer and longer and… the discounts imposed ever higher. To give its agreement to the sale of activities, most often to a Russian buyer, the commission imposes discounts on the value of the asset. “At the beginning, it was 30%. Today more than 50%! In fact, companies are trapped and the government is doing everything to keep them in Russia”sums up this French entrepreneur, furious at the antecedents created by Société Générale and Renault.
Companies sold for a pittance
Although TotalEnergies was satisfied with the beginning of a downturn with a provision of 3.5 billion dollars in its accounts, mainly linked to the potential impact of international sanctions, Société Générale and Renault very early on took the decision to leave Russia.
The first sold its subsidiary Rosbank to the oligarch Vladimir Potanin. The second ceded its assets to the Russian state. In both cases, sales were made in a hurry for a pittance. “And, since then, in both cases, it’s time for the revenge of Russian executives who saw with a nasty eye the presence of French people in these flagship Russian companies”testifies a French leader, connoisseur of the files, skeptical about the prospects.
At Avtovaz, the Russian giant that Renault, after twenty years of industrial cooperation, sold in May to a government-led team, “It’s the return of the engineers who left when Renault arrived… Today, they can produce basic cars. But without all the modern options. »
Auchan and Leroy Merlin determined to stay
While Safran had to stop all its activities because, from the start of the conflict, aeronautics was the target of Western sanctions, departures keep coming: Engie, Five, Legrand, Decathlon… The Mulliez family, strong in results up, on the contrary confirmed the maintenance of Auchan and Leroy Merlin.
If the transfer to the management of Schneider Electric is effective, that of Air Liquide is dragging on all the more since, as a company in the strategic energy sector, it must receive the approval directly from the Kremlin. Saint-Gobain and L’Oréal are still there. Danone has certainly announced its departure but is struggling to find a buyer under the desired conditions. FM Logistic is also maintaining its presence. Just like, for example, suppliers of spare parts for Renault (now Avtovaz).
In total, of the 200 main French groups present in Russia in February, around thirty have left or have announced the firm intention of leaving. Or 15%. Don’t forget to add the “empty shells”such as those luxury companies that have closed up shop but keep their windows lit with a sign “temporary closure” and continue to pay their employees.
Europeans are also trying to take advantage
As for the fate of French SMEs, it is more uncertain. Most prefer to remain silent, sailing on sight to maintain often crucial activities in their overall accounts. “This is the dilemma of French companies. Leaving is not just shooting yourself in the foot and closing doors for the future. But also allow today to enrich a Russian, state or private company “, insists a branch manager. Opposed to the Kremlin offensive, he is offended by kyiv’s argument accusing European companies still in Russia of having blood on their hands. “Actually, the equation is more complex. We risk losing everything and the Russians gaining even more. Unsurprisingly, around us, there are many raptors to redeem us! »
Ces “boys” are not all Russians. “Unscrupulous Europeans are also ready to get their hands on cheap European assets”we recall within the association of European businesses in Russia. “Paradoxically, there is plenty of cash in Moscow at the moment. Thanks to the sanctions, rich Russians cannot take their money out to Europe and, more or less coerced and coerced, are ready to invest in Russia. All you have to do is team up with one of them to finance a takeover and make a juicy deal! », confides for example a French businessman. He is overflowing with enthusiasm for his plan to acquire a large service company, the French leader in its sector in Russia. As often in business in Russia, the misfortune of some is the happiness of others.