Europe's biggest paint maker Akzo Nobel expects its Russian operations to collapse in a matter of weeks, making it one of the first multinationals to reveal how the country's economy is buckling under the wave of sanctions.
Thierry Vanlancker, who has led the Dulux paint parent since 2017, said that a combination of interruption to key supply chains and the financial strains facing its Russian customers made the failure of the business inevitable.
“We’re pretty realistic that over a one month, two month period this will come to a gradual, if not normal, phasing out of the business [in Russia],” Mr Vanlancker told the Financial Times.
“It’s either because the raw materials aren’t available any more or it is because somewhere the main customer may not be able to pay any more.”
Given that the group expects its Russian operations to rapidly unravel, Vanlancker said there was little point in trying to pull out of a country it had been in for more than 30 years.
Akzo Nobel's warning highlights that the wave of sanctions imposed by Western governments will cut the appeal of the market in Russia, which economists expect to plunge into a deep recession.
Akzo Nobel has four paint plants in Russia, supplying both residential and industrial customers. They employ about 650 people, and generated about €200 million, or 2 per cent, of the group’s €9.6 billion annual revenue. – Copyright The Financial Times Limited 2022
