Some plastics firms leave Russia over Ukraine crisis

As the Ukraine crisis continues, plastics-related firms are making decisions on how they do business with Russia.

Russia invaded neighboring Ukraine on Feb. 24. The conflict is now in its fourth week, as Ukrainian forces have offered stiff resistance. Many Western countries have provided Ukraine with military support.

The conflict is also affecting plastics firms by driving oil and natural gas prices higher, which likely will lead to higher resin prices as well.

LyondellBasell Industries of Houston, a major global resin supplier, has said it will turn down new business opportunities with Russian state-owned entities and plans to discontinue existing business with those entities as well. The firm is also donating $220,000 to relief efforts in Ukraine. LyondellBasell has two offices in Russia but no production sites.

More recently, materials firm Nova Chemicals of Calgary, Alberta, donated to the Canadian Red Cross Ukraine Humanitarian Crisis Appeal and announced that it will match employee donations up to an additional $25,000.

"While we do not have colleagues or operations in Ukraine, many throughout our Nova family are of Ukrainian and Eastern European descent and are concerned about friends and loved ones in the region," Senior Vice President Mona Jasinski said.

Industrial firm Teijin Ltd. of Japan also said it will donate more than $80,000 through the United Nations Children's Fund and the U.N. High Commissioner for Refugees as humanitarian assistance to Ukraine.

Other plastics-related firms are making different responses to the crisis. Global packaging firm Greif Inc. of Delaware, Ohio, has temporarily closed its Ukraine plant but is continuing to operate in Russia, officials said in a statement sent to Plastics News.

"We are extremely upset and aghast by the aggressive actions of the Russian government," they added. "While we condemn the actions taken by the Russian government and have frozen all further investment in Russia, we remain in full support of our 540 Russian colleagues, many of whom are long tenured.

"Their livelihood is important to us, and we continue to operate in Russia as a means of safeguarding their well-being. We have established an internal task force that is meeting multiple times per week to stay abreast of unfolding events in the Ukraine. We will continue to assess the situation."

Greif was one of 27 public firms identified by Yale University's School of Management as "defying demands for exit or reduction of activities" in Russia. Yale also identified more than 400 firms that have exited or reduced their operations there.

Plastics and chemicals firm Evonik Industries is also remaining in Russia for the time being. Officials with Evonik in Essen, Germany, said earlier this month that the firm plans to continue selling material to Russia, which accounts for only 1 percent of its sales. Plastics-related products made by Evonik include nylon resins and specialty foams.

CEO Christian Kullmann said Evonik would follow sanctions that have been implemented, which have not covered many chemical products so far.

"In view of sanctions … we can still do business with Russia [and it] will continue," he added. "These are businesses with feedstock, which are needed by the population of Russia, and they are not our enemy. That is the Russian regime. … We will continue to care for and deliver goods to the Russian population to the extent it is allowed."

Plastics-related firms identified by Yale as having reduced their business in Russia include Avery Dennison, 3M, Clorox, Honeywell International, Lego, Bosch, Kimberly-Clark and Procter & Gamble.

• Solvay SA of Brussels is suspending operations and new investments in Russia. Officials said that the firm "is deeply concerned by the dramatic humanitarian crisis that is unfolding as a result of the hostilities in Ukraine." Solvay is also suspending dividend payments from Rusvinyl LLC, an independent PVC/caustic soda joint venture in Russia. Solvay owns the firm jointly with Russian petrochemicals firm Sibur.

The Solvay Solidarity Fund has donated $1.1 million to the Belgian and International Red Cross in support of relief efforts for civilians impacted in Ukraine.

• Dow Inc. of Midland, Mich., has reduced its operations in Russia. The firm has suspended all purchases of feedstocks and energy from there and has reduced its product offerings in the country. Dow has stopped all investments in the region and is only supplying "limited essential goods," including food packaging, hygiene, cleaning and sanitation products and household goods. The firm's actions will include its polymer dispersions plant in Ramenskoye and its polyurethane systems plant in Vladimir, a JV with Russian petrochemicals firm Izolan.

Dow officials added that the firm is providing evacuation support, financial assistance, shelter and other support to employees and their families in Ukraine and Russia. Dow and the Dow Co. Foundation are contributing $275,000 to help meet humanitarian needs. Officials said this funding will support the International Red Cross Movement through CAF America, with $25,000 of that amount matching employee contributions.

• Oil and gas leader Shell plc said it would exit all of its Russian operations, including a major liquefied natural gas plant. The London-based firm said in a statement it will exit the Sakhalin 2 LNG plant in which it holds a 27.5 percent stake and is 50 percent owned and operated by Russian gas giant Gazprom.

• Plastics and chemicals giant BASF SE of Ludwigshafen, Germany, has donated $1.1 million for relief efforts to the German Red Cross, which is already working in the Ukraine region. BASF said the German Red Cross is supporting its sister organization, the Ukrainian Red Cross, in relief efforts.

• ExxonMobil Corp. plans to exit its Russian operations, CEO Darren Woods said. The energy giant's ExxonMobil Chemical unit is a major resin supplier.

• Plastics and chemicals maker DuPont Co. of Wilmington, Del., is "closely monitoring" the situation in Ukraine. DuPont employs about 50 in Russia and operates an innovation center in Moscow. The innovation center hasn't been affected by the crisis, a spokesman said.

• Auto supplier Rehau Group — with corporate headquarters in Switzerland but operations based in Germany — is suspending operations in both Russia and Belarus. Belarus has supported the Russian invasion. "We have seen the development of the crisis and the suffering of the people in Ukraine with shock and great concern," officials with Muri, Switzerland-based Rehau said.

"As a company that operates in Ukraine, as well as in Russia and Belarus ... we strongly condemn the attack on Ukraine and its people. It is a war against humanity, the freedom of all of us and peace in Europe. And thus against the values for which we as Rehau Group stand," they added.

• Uponor Corp., a global supplier of plastic pipe and other plumbing products, has suspended all exports and imports to and from Russia. Finland-based Uponor has a manufacturing facility and sales office in Russia, employing around 90. The firm has four sales employees in Ukraine. Uponor has also made a donation of $110,000 split equally between UNICEF Finland and the Finnish Red Cross.

• Canada-based Magna International Inc. has halted its operations in Russia, where it has six plants and 2,500 employees.

"Like most in the international community, we remain deeply concerned with the very unfortunate situation in Ukraine," spokeswoman Tracy Fuerst said in a statement.