Materials firms pulling some business in Russia as Ukraine conflict continues

LyondellBasell Industries will turn down new business opportunities with Russian state-owned entities, and plans to discontinue existing business with those entities as well.

Houston-based LyondellBasell also is donating 200,000 euros ($220,000) to relief efforts in Ukraine.

"We are closely monitoring the Russia-Ukraine situation as it continues to evolve," officials said in a statement sent to Plastics News. "LyondellBasell condemns the unprovoked attacks on Ukraine, and we are taking action to support the humanitarian efforts as a result of this conflict.

"In addition to abiding by all sanctions, effective immediately, LyondellBasell will not enter into any new business transactions or relationships, and to the extent legally possible, intends to discontinue business relationships with Russian state-owned entities. We are in the process of assessing how this will impact our operations, including feedstocks, utilities, supply chain providers, and customers."

Officials added that although LyondellBasell doesn't have operations in Ukraine, the firm has seen the rising number of refugees and dislocated families and is supporting the humanitarian crisis through its global corporate citizenship program, Advancing Good.

Half of LyondellBasell's donation will go to the United Nations High Commissioner for Refugees to provide shelter, emergency relief items, cash assistance and mental health support. The other half will go to the International Medical Corps to support their mobile medical units programs.

LyondellBasell ranks as a global leader in production of polyethylene and polypropylene resins and as North America's largest plastics compounder. The firm has operations in more than 100 countries — including Russian offices in Moscow and Togliatti — and posted sales of $27.7 billion in 2020.

LBI is not alone. Other firms with plastics and chemicals businesses have taken action as well.

Oil and gas leader Shell plc said it would exit all 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 which is 50 percent owned and operated by Russian gas giant Gazprom.

"We are shocked by the loss of life in Ukraine, which we deplore, resulting from a senseless act of military aggression which threatens European security," Shell CEO Ben van Beurden said in a statement.

Plastics and chemicals giant BASF SE of Ludwigshafen, Germany, has donated 1 million euros ($1.1 million) for relief efforts to the German Red Cross, which is already working in the Ukraine region.

"The suffering for the civilian population in the country is immense," said Chairman Martin Brudermüller. "We want to help these people and therefore quickly decided to provide this emergency aid."

BASF said the German Red Cross is supporting its sister organization, the Ukrainian Red Cross, in relief efforts, including providing food, clothing and hygiene kits, as well as communication devices such as charging facilities for cell phones.

On a March 3 conference call, officials with plastics and chemicals firm Evonik Industries said 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," he added.

Officials with plastics and chemicals maker DuPont Co. of Wilmington, Del., said in an email to Plastics News that the firm "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. Employees' safety "and the security of all our colleagues and their families in and outside the region is our highest priority," he added.

Uponor Corp. a global supplier of plastic pipe and other plumbing products, has decided to suspend all exports and imports to and from Russia until further notice because of the invasion of Ukraine. Finland-based Uponor has a manufacturing facility and sales office in Russia, employing around 90. The firm has four sales employees in Ukraine. Uponor generates less than 2.5 percent of its sales from Ukraine and Russia.

Uponor also has made a donation of 100,000 euros ($110,000) split equally between UNICEF Finland and the Finnish Red Cross. "We are focusing on the well-being of all our employees as best as we can," President and CEO Michael Rauterkus said. The firm will continue to actively monitor the situation and the development of sanctions and countersanctions, and to comply with all applicable laws, regulations and sanctions.

The conflict is forcing some European automakers to suspend production because suppliers of electrical cables and wire harnesses have plants in Ukraine. German cable maker Leoni AG, with two plants in Ukraine employing some 7,000 workers, said it is intensifying efforts to help offset the disruption in Ukraine by adding capacity at other sites, while prioritizing the safety of its employees. Leoni uses plastics in connectors, wiring and harnesses.

"Logistics in and out of Ukraine are a particular challenge, especially because of the partly chaotic situation at the border points with the EU," a Leoni spokesman said in a statement.

Vehicle production at BMW plants in Munich and in Dingolfing, both Germany, will be paused for a week, as will output at the Mini factory in Oxford, England. Engine production at BMW's engine factory in Steyr, Austria, will also be suspended, Automotive News Europe, a sister publication of Plastics News, reported.