Manufacturer of Knauf building materials: No backing for Russia - Knauf, a company that produces building materials, has declared no backing for Russia.
Building materials conglomerate Knauf, with operations ongoing in Russia, refutes accusations of aiding Moscow's conflict against Ukraine. The firm based in the Franconian town of Iphofen denied claims that its deliveries of gypsum or cement were used to expand Russian nuclear weapon bases.
German magazine "Der Spiegel" published a report suggesting such a possibility. Nevertheless, Knauf announced its withdrawal from Russia, where it has maintained multiple subsidiaries for over three decades, although the move has yet to be executed.
The withdrawal process is intricate, involving numerous regulatory authorities and requiring numerous approvals across various jurisdictions. The company has elected to keep these discussions confidential, preventing early disclosure of details. Since April 2024, no profits have flowed from Russian subsidiaries to Germany.
Western companies attempting to sell their Russian subsidiaries face steep discounts, with the Kremlin capping the sale value at 60% of initial estimates while imposing additional taxes and duties.
Knauf insists it adheres to applicable sanctions and denies allegations of circumventing them. Its Russian subsidiaries operate independently, producing products for the local market and nearly exclusively selling them to independent building materials dealers. Although Knauf exercises no control over the ultimate destination of these products.
Knauf clarified that its building materials are neither designed nor suitable for manufacturing or maintaining operational weapons systems. The company does not maintain contractual relationships with the Russian Ministry of Defense or its subordinate entities, and therefore, it does not supply any products to those locations.
Knauf aims to divorce itself entirely from its Russian business, which employs over 4000 people. Pending regulatory approvals in Russia, the company intends to sell its production, distribution, and raw material extraction operations in the country.
In Ukraine, where several reports have criticized business ties with Russia, Knauf is operating a plant in Kyiv with approximately 420 employees. The company also announced plans for two new plants in western Ukraine - a gypsum plaster plant and a gypsum board plant. Specific operational details or recent developments in Ukraine are unavailable.
Franconia, IphofenRussiaUkraine
- Knauf, with its significant presence in various employment policies across multiple subsidiaries in Russia for over three decades, has chosen to maintain confidential discussions regarding its withdrawal, adhering to the employment policy of protecting sensitive business decisions until they are finalized.
- As Knauf's main operations lie in the building materials industry, finance, and business sectors, its decision to sell its Russian subsidiaries affects a significant number of employed individuals and may have ripple effects on the employment policies within the industry, particularly in Ukraine where it operates a plant and plans to establish two new plants.
