12 May 2022 09:59

Siemens announces plans to wind down business in Russia

MOSCOW. May 12 (Interfax) - Siemens will exit the Russian market because of the events in Ukraine, the German company announced in a press release.

The company said it has started proceedings to wind down its industrial operations and all industrial business activities in the country.

Siemens recalled that after the start of Russia's military operation in Ukraine the company put all new business in and international deliveries to Russia and Belarus on hold. The comprehensive international sanctions, as well as current and potential countermeasures, impact the company's business activities in Russia, particularly rail service and maintenance, Siemens said.

Siemens has "decided to carry out an orderly process to wind down our industrial business activities in Russia," company CEO Roland Busch was quoted as saying in the press release.

"We are evaluating the impact on our people and we will continue to support them to the best of our abilities. At the same time, we provide humanitarian assistance to our colleagues and the people of Ukraine and stand with the international community in calling for peace," Busch said.

Siemens' business currently includes operations particularly in automation and digitization for industry, smart infrastructure, transport, and distributed energy systems. Siemens spun off its energy division into a separate company, Siemens Energy, in 2020; as of the end of November 2021, Siemens was the largest shareholder with 35%.

There are thus two separate companies in Russia, Siemens and Siemens Energy. The latter is one of the main suppliers of energy equipment in Russia. The company owns Siemens Transformers and a 65% stake in a joint venture with Power Machines, Siemens Gas Turbine Technologies, and its division Siemens Gamesa is a partner of Enel Russia in renewable energy projects in Russia.

In addition, Siemens has a joint venture in Russia with Sinara Group, Ural Locomotives LLC, which builds the 2ES6 Sinara mainline electric freight DC locomotives and 2ES10 Granit locomotives with asynchronous traction drives, as well as Lastochka commuter trains and 2ES7 mainline electric AC locomotives.

Siemens Finance LLC, which is Siemens' leasing structure in Russia that provides solutions for acquiring equipment, vehicles, and machinery, said that it was in the "active stage" of negotiations regarding a change in ownership owing to the shareholder's decision to exit the Russian market.

Siemens Finance LLC is a Russian company, and it is one of the country's ten largest lessors.

"No changes are planned in the operations of the company's representative offices. All 24 offices, from Sakhalin to Kaliningrad, are operating as usual," the leasing company's Russian press service said in a statement.