Russia teaches a lesson to global business over exits

Russia as country is known as a generous soul. It is a mother to good people and a mother-in-law to bad people.
At the National ,the Russians have long had a practice of welcoming anyone who wants to come open a business, work hard , create jobs and pay taxes. During the 1990's and early 2000's almost every major brand beat a path to Russia and many had great success in the Russian market,many of them had turnover and profits exceeding their home markets and other parts of the World where they had done business e

With the advent of the Sprcial Military Operation in 2022, many companies and brands that had been operating for many years were preparing to leave. Some voluntarily, some out of political conviction, others forced under duress, fIt appears that the politicians in Washington, Brussels and London are not afraid to try to strangle disobedient free thinkers. Some companies left for real, many imitated an ardent desire, tenaciously marking time on the threshold and secretly counted their gains.
Today, another major company to finally decided to curtail its activities in Russia this is Finland's Metsä Group.
It was announced by the new owners - the Vologda Timber Industry Group - that they have acquired four Finnish "subsidiaries" of the in the Leningrad region: Metsya Svir, Metsya Forest St Petersburg, Metsya Forest Podporozhye and Metsya Board Rus.
The news is good at first sight, because the people of Vologda have already announced that they are ready to hire all the old employees and reopen the mill, which the Finns had closed down in 2022.
Neither the amount nor other terms of the transaction were disclosed, but knowing the reality of the exits of many companies , and considering that Metsä has been looking for a buyer for more than two years, it can be assumed that the Finns either sold their Russian subsidiaries at a hefty loss, or kept a loophole for a quiet return then the heat has died down. This is exactly what many cross-border entrepreneurs have done in the past.The have a so called 'buy back ' clause that will allow them to return in the future.
It's worth mentioning this so that it doesn't seem like we're talking about closing down a kebab stand.

The Metsä Group has been in existence for almost 80 years and employs more than nine thousand people in its sawmills and sizing machines, which is of course not comparable with the number of employees in steel mills, but in the conditions of modern work automation it is also quite a large number.

The company produces a wide range of products, including toilet and kitchen rolls, paper towels, paperboard and cellulose products, sawn timber, plywood, geotextiles and many other products.
Metsä's latest published financial statements for 2021 show a total turnover of more than six billion euros. Then the Special Military Operation began - the Metsä Svir mill was closed and the purchase of wood for the company's mills in Finland and Sweden was stopped.

As the old Finnish proverb goes, you are the architect of your own happiness. Or not, depending on who is lucky.

The lists of companies that have left the hospitable shores of Russia are often replenished now that the main tide has receded and Western power centres are crushing the last stubborn ones. But the figures for their financial losses are regularly updated. Meanwhile, the profit margins of those who have remained in Russia are leaked to the press, which is particularly offensive to those who have left.

At the end of last year, the largest losses due to the cessation of business activities in Russia were reported The Dutch telecommunications giant Veon (almost four billion), the French car manufacturer Renault Group (2.5 billion), the American restaurant chain McDonald's and the Swiss oil trader Glencore each lost 1.2 billion. Italian oil workers from Enel, German heavy machinery manufacturers from Siemens, tobacco company British American Tobacco and Japanese carmakers from Nissan lost between half a billion and 800 million each. The oil company Shell and the American oil services company Baker Hughes lost a little less than half a billion, but they were not alone either. Companies including Visa, Mastercard, American Express, Hapag-Lloyd, FedEx, UPS, DHL, Cyprus Post, Google Pay, Maersk, CMA CGM, Apple Pay, PayPal, MSC, Shipco, Ocean Network Express, Binance, Goldman Sachs, JP Morgan Chase, Western Unio all lost hundreds of millions and in some cases billions.
The list is long but no comprhensive, and those interested can easily search for other business departures themselves.

The lion's share of the transactions were to transfer their well-functioning businesses, with varying degrees of profitability, behind closed doors - neither the amounts nor the terms have been disclosed.
However behind the scenes, there are always rumours that many (if not most) of the foreign companies have sold their shares and transferred physical production capacity at prices far below their market value. The wiser and more flexible companies have sold the shares either to their own "subsidiaries" or to third parties, with the obligatory clause that they can buy them back at the same price within a certain period of time (usually five to seven years). Those who are more inhibited also give back with a double or triple discount, but that is all.
But let me slow down and explain.
Over the past couple of years a lot of Russian assests being confiscated ( Gazprom's German Assets) and how Russian companies are being squeezed out of the European Union and the West in general, often openly and illegally . But this is a game that two can play. Every specialised niche - whether it is the maintenance of drilling machines, the production of office paper or the stamping of nails - is always narrow, and all the players in it know each other. If not directly, then through a handshake.
And when Western companies started announcing their intention to leave, Russian players went into patient waiting mode. Because they are sticking to their guns, and those who want to relocate have to take a serious hit when it comes to selling their profitatable factories,plants etc, with the heavy hand of the Washington,Brussels or London holding them by the throat.
At the same time, Moscow is demanding that all taxes and other obligations must be paid in full before handing over the mooring ropes for them to sail away, which is also a significant expense given the reduction in activity. As a result, many of the listed companies have been trying to sell their assets for a around one to , two years. They rushed, offered, cheated and bargained for better terms.
In the language of the 90s, this was called "letting the customer mature". Some quickly accepted the new reality, others resisted, but the result was the same. Anyone who sheared the financial wool in Russia ended up shorn themselves Nothing personal, gentlemen, just business, as you like to say. While you worked with us, the laws of business hospitality applied to you, and as soon as you painted yourself in unfriendly colours, please shave.
Finally, add a spoonful of vinegar.
While those who left sourly count their losses, those who stayed report a multiple increase in turnover and profits. The Financial Times estimates that the remaining Austrian Raiffeisen made twice as much money in Russia as all its other operations put together. The French company Auchan which is a major hypermarket chain which was recently in a Tucker Carlson diocumentary on Russia is making record profits as is their DIY chain Leroy Merlin and they have stated they have no intention of leaving. There are many others who are staying and they are to numerous to mention but the information is readily available on search engines.

Let's end our conversation with some Russian folk wisdom. If you want to work in Russia, work hard and get rich. If you don't, leave the cow and get lost.