The effectiveness of economic sanctions imposed by the United States and the European Union since 2014, as well as the response of Russian counter-sanctions, is a debatable topic. The truth of the saying "to whom the war is, and to whom the mother is dear" is confirmed by impartial analytics.
Many of the largest companies not only learned to survive in the conditions of the “new normality”, but also significantly improved their financial performance. We made our own list of 10 Russian companies that benefited from the “sanctions wars."
The first place in the ranking of Russian companies that benefited from the sanctions should be given to PJSC Gazprom, which not only holds the first place in the world ranking of the Fortune Global 500 as the most successful corporation from Russia, but also moved from 49th to 42nd over the past year place with revenue of $ 131.302 billion
Apparently, the successes of Gazprom are not hindered by the claims of Washington and Brussels: American and European political elites are not able to stop the construction of the Nord Stream-2 and Turkish Stream gas pipelines under construction, designed to ensure the export of Russian gas bypassing Ukraine. Denmark, the last European country through which Nord Stream-2 is supposed to go, has long tried to counteract oil and gas expansion from the Kremlin, and at the end of October allowed the pipeline to run through its waters. The construction of the stream should be completed by the end of 2019.
However, the company under the leadership of Alexei Miller still bears certain losses from the “sanctions wars". In July, Kazakhstan's ArcelorMittal structure, due to US and Ukrainian sanctions, terminated the contract with the official distributor of Gazpromneft - Lubricants.
Gazprom also has problems on Sakhalin: for the first time, a specific field, the South Kirinsky gas condensate field on the shelf of the Sea of Okhotsk, included in the Sakhalin-3 project, was included in the sanctions list. The states have banned the supply of any American-made products, primarily high-tech equipment for gas production.
When friction arises between large states, the military budget feels good. In Russia, many representatives of the country's top leadership are convinced that our two main allies are the army and navy, and therefore the State Defense Order is given a prominent place in the country's economy.
The first place in the top 100 Russian defense enterprises is held by Almaz-Antey Concern JSC, which is headed by former Prime Minister Mikhail Fradkov. 60 defense enterprises and research institutes that are part of the concern develop, manufacture and modernize domestic air defense systems, as well as producing civilian products, such as GLONASS navigators, which are required to supply vehicles in state institutions.
The history of Almaz-Antey was accompanied by a series of high-profile contract killings at the beginning of the “zero” - criminal 90s in the Russian “defense industry” were somewhat delayed. In January 2003, Alexander Poretsky, the first deputy general director of the Obukhov plant, part of the Almaz-Antey concern, was found hanged in his office (according to other sources, in his own country). In June 2003, Igor Klimov, the acting general director of the concern, was shot dead in Moscow; on the same day, 14 hours later, Sergey Shchetko, commercial director of the RATEP OJSC, a member of the Almaz-Antey concern, was killed in Serpukhov, Moscow Region. In July 2009, the head of the marketing department of the Almaz-Antey air defense group, Andrei Barabenkov, was killed. The criminal showdown around the Russian anti-aircraft gunners was completed only by 2010.
Almaz-Antey, one of the top twenty global arms manufacturers, ranks second in the ranking of Russian companies that have benefited from sanctions.
The third place in the rating of those who are not afraid of foreign sanctions is occupied by the largest private company in Russia - PJSC Lukoil. The income of the head of the company Vagit Alekperov increased in 2019 from $ 16.4 to $ 20.7 billion, and the entrepreneur himself rose from 4th to 3rd place in the list, entering the top three largest Russian oligarchs. One of the main owners of Lukoil and Alekperov’s business partners, Leonid Fedun, feels great. His personal fortune has increased by $ 200 million.
The entry of Lukoil into the sanctions list was not so obvious, but this event took place in 2014. It would seem that Alekperov does not belong to “Putin’s friends” and heads the largest private and not state-owned oil and gas company, but these facts still did not save the Spartak club owners from the punishing sword of the American Themis.
However, Lukoil did not suffer much: although a large joint venture with Total broke up, which was focused on the development of complex deposits, the company adopted a plan to increase production by 1.5% per year. Including by expanding work in the near abroad - not so long ago new hydrocarbon reserves were discovered in Uzbekistan, which will be developed by Messrs. Alekperov and Fedun. “We have already adapted,” says Vagit Yusufovich, telling reporters that the share of Russian equipment in the company has increased from 42 to 70%. The president of the company also confirms the words of the Fortune Global 500 international rating, in which Lukoil rose last year from 69th to 50th place among the largest world companies.
In response to Western sanctions, the Russian government responded with an import substitution policy in agriculture. The government reports that it succeeded in crowding out foreign producers and knocking down prices for poultry, pork and tomatoes. Accordingly, those agro-industrial complexes that are involved in crowding out foreign meat and vegetables from the market are doing well.
Among the Russian "food industry", Miratorg agro-industrial holding holds a special place - a company whose Presidential Linnik relationship with the spouse of Prime Minister Svetlana Medvedeva is denied by the official Kremlin, which does not prevent the company from developing extremely rapidly. Mr. Linnik, among other things, is known for calling the citizens, preoccupied with the disappearance from the shelves of jamon and Parmesan, "rolled up the balabol hysteria."
Very piquant in this situation is the fact that Miratorg is the largest recipient of government subsidies. So, according to Soyuzmolok, in 2017 Miratorg accounted for 20% of the total amount of projects (708 million of 2.6 billion rubles) in the dairy industry approved by the commission of the Ministry of Agriculture.
In the Bryansk, Smolensk and Kursk regions, where the ambitious Linnik has huge production facilities, the company receives subsidies from 90 to 99% of the allocated funds annually to support livestock breeding. For this reason, for some incomprehensible (or vice versa, well understood) reasons, they make an exception and reduce Customs duties so that it can compete in other countries.
The main bank of Russia does not suffer too much from foreign policy turbulence, but is growing steadily - if its profit decreased in 2014 and 2015, then it went up steadily - in 2018 Sberbank earned record 833 billion in recent years, including pre-sanctions rubles.
It is characteristic that German Gref for a long time remained one of the few representatives of the Russian elite associated with state power that was leaving the view of the Washington and Brussels Themis, but nevertheless fell into the “Kremlin report” of the US Treasury Department containing 210 names of “enemies of democracy”: 114 major officials of the Russian Federation and heads of state-owned companies, as well as 96 oligarchs. Nevertheless, the American side said that being on this very large-scale list does not automatically mean the imposition of sanctions. One way or another, Mr. Gref currently has no personal restrictions in the US and EU countries.
It seems that Sber is experiencing the greatest problems not from the actions of sworn overseas “partners”, but from his closest neighbor - Ukraine, where legal and illegal excesses take place with respect to Sberbank. In the spring of 2017, Ukrainian radicals blocked his offices, paralyzing the work, as a result of which the bank even had to impose temporary restrictions on operations so that customers would not panicky take their funds in a panic.
However, at the moment, the Ukrainian daughter of the main Russian bank continues to operate on the territory of a troubled neighbor, bypassing legal restrictions - so, the Commercial Court of Kiev on October 10, 2019 granted the claim of Sberbank of Russia, which contained a requirement to recognize the Ukrainian JSC Sberbank as an independent legal entity, not owned by Russia.
6. Toyota Motor
Moscow’s confrontation with Washington and Brussels seems to involve curtailing industrial cooperation, but in the Land of the Rising Sun its views on international cooperation. Japanese Toyota, which created Toyota Motor LLC, registered in Mytishchi, is developing vigorously: for three years, the profit of the Russian representative office of the company has grown from 5 to 12 billion rubles. The company does not appear in high-profile scandals, guided by the principle of "money love silence."
Toyota has held the title of industry leader for more than five consecutive years on this indicator, as evidenced by the rating of Russian factories and subsidiaries of foreign concerns. The Japanese, who opened a plant on the outskirts of St. Petersburg in the village of Shushary, seem to have settled in Russia and by no means intend to curtail production due to political factors, and even plan to invest an additional 20 billion rubles in the Russian branch.
According to the rating of RBC, which, following the American Fortune magazine, compiles a list of five hundred leading companies, but not world ones, but exclusively Russian ones, Surgutneftegas PJSC showed the most impressive profit growth in the country - 337%, finally recovering from the financial failures that the company suffered in 2016, not making a profit, but suffering losses.
The general director and co-owner of Surgutneftegaz Vladimir Bogdanov, who has been leading the company since the 80s, was put on the US sanctions list on April 6, 2018. Since then, analysts have predicted that he could suffer an unenviable fate. The features of Surgutneftegaz consist in significant dollar savings, which theoretically could be frozen by American justice, in connection with which Bogdanov’s company secretly goes over to trading for euros.
In an interview with Die Welt in 2014, the head of the analytical department of Russian Standard Management Company, Sergey Suverov, said that Surgutneftegas functions as a “currency piggy bank”, but it remains unclear for whom the oil and gas company is saving money. “The answer to this question can only be known in the Kremlin,” suggested Suverov.
“Sanction Wars” slowed down the penetration rate into Russia of foreign Internet services that are growing extremely fast abroad, such as, for example, online stores. So, one of the world leaders, the Amazo company, whose chairman Jeff Bezos has become one of the richest people in the world for several years, cannot seriously lay claim to Russian markets.
Russian businessmen are mastering an unoccupied niche. Among the richest women in Russia, Tatyana Bakalchuk, the founder of the Wildberries online store, escaped. The fortune of this businesswoman is growing rapidly - over the year it has grown more than one and a half times, from $ 600 million to 1 billion.
In August 2019, Wildberries opened its 5000th point of delivery of orders in the city of Snezhnogorsk, Murmansk region. By the end of the year, the company intends to open at least another 2,000 points of delivery of orders, and there is reason to believe that it will cope with this task. These achievements delight some experts who emphasize that Bakalchuk’s business has grown on its own in a competitive environment, in contrast to the business of the traditional leader of the Forbes female rating, the wife of ex-Mayor of Moscow Yuri Luzhkov Elena Baturina.
American and European sanctions are designed to interfere with the operation of the Russian financial system, however, the domestic banking sector does not seem to be experiencing much inconvenience. The economic indicators of VTB Bank PJSC are growing faster than others: in 2017, its profit amounted to 120 billion rubles, exceeding the previous year by two and a half times, and in 2018 - 179 billion rubles.
The rapid growth of the business is encouraging to the head of the bank, Andrei Kostin, who even announced on October 25 that the “sanction pause” had begun. In May 2018, Mr. Kostin also showed optimism, saying that sanctions did not interfere with his bank in any way, despite the fact that in 2018, VTB Group still sold VTB Capital in the United States.
The largest producer of nickel and palladium in the world is not on the sanctions list, but it also faces reputation problems related to the foreign policy confrontation between Russia and the West. The company was shaken in early April 2018, when 14.6% of the company's share price was lost in one day after the announcement of one of the American lists of “bad guys” in Russian business, because one of the main beneficiaries of MMC Norilsk Nickel was sanctioned that day. - Oleg Deripaska. The latter, by the way, as part of the sanctions confrontation, can be considered the most unlucky businessman of the top thirty Russian rich: Deripaska first became the hero of a sex scandal, and then the only large businessman from Russia who had to cede the leadership in his Rusal and En + companies to foreign owners and to leaders.
Nevertheless, Deripaska’s problems so far have little effect on the activities of Norilsk Nickel. The fact that the business of the company, whose main shareholder is Vladimir Potanin, is going quite well, can be seen from the position of this oligarch on the Russian Forbes list - in 2019, as a year earlier, he takes 6th place, but the personal capital of a businessman , famous for Potanin scholarships for students, rose from $ 16.9 to 18.1 billion.