27 Jan 2023 13:03

France's Legrand leaving Russia, plant in Ulyanovsk to continue operations

ULYANOVSK. Jan 27 (Interfax) - France's Legrand Group, a leading manufacturer of electrical equipment, is exiting Russia, but the plant it built in Ulyanovsk will continue to operate.

"In view of recent developments, including rising operational complexity and uncertainty, Legrand has decided to divest its Russian operations and is currently reviewing options for transferring their control in a timely and orderly manner," the group said in a statement on its website.

Legrand said its activities in Russia accounted for approximately 1.5% of full-year sales in 2022. "As of December 31, 2022, the Group's balance-sheet exposure to Russia, including currency translation reserves, amounted to approximately €200 million, of which close to €150 million will be booked in respect of its 2022 consolidated financial statements as an assets impairment, with no impact on the Group's adjusted operating profit," the company said.

"Legrand believes this disengagement is the best option to ensure its ongoing compliance with all legislation and regulations as well as the long-term continuity of local operations for its employees and customers," the company said.

Ulyanovsk Region Governor Alexei Russkikh held a meeting with the head of Legrand in Russia and the CIS, Pascal Decons and the director of Legrand subsidiary JSC Kontaktor, Lyudmila Nekrasova.

"Under the pressure of sanctions French company Legrand is forced to leave Russia. Despite the external political circumstances, the plant in our region will continue to operate as usual. The staff will be retained," Russkikh said on his Telegram channel.

"We discussed all these aspects in great detail, receiving a number of guarantees," the governor said, adding that negotiations are now being held with a number of potential investors. The Ulyanovsk plant has enough reserves of materials for several months, he said.

Legrand built the Ulyanovsk plant to manufacture low-voltage switching equipment in the Zavolzhye industrial park at a cost of about 1.5 billion rubles. The company planned to move part of the production from the Kontaktor plant, which Legrand acquired in 2007, to the new facility.