A few days after the start of the Ukrainian war, large international companies announced their exit from the Russian market.
Among them were giants like McDonald’s, Coca-Cola, Levi’s, Adidas, Ikea, Spotify, PayPal, Visa, Mastercard or General Motors.
As the weeks and months passed, new firms joined the business exodus triggered by the war.
Currently, more than 1,000 foreign firms have voluntarily withdrawn, suspended or reduced their business in Russia, according to a list of companies compiled by the Yale University Institute for Executive Leadership, where a group of researchers and collaborators track and permanent updating of the decisions made by companies.
Jeffrey Sonnenfeld, leader of the project, says that at least 400 foreign firms remain in the country.
Some of them are Benetton, Yamaha, Ali Baba, JD, Tencent, Mitsubishi, Emirates Airlines or Lacoste.
“It is a shame that they are still there,” criticizes Sonnenfeld in dialogue with BBC Mundo. “Many companies are not used to transparency and accountability,” he adds.
The investigator says that when they started the work, in just one week they received 22 threats from corporate lawyers.
“In each of the cases we were correct,” he says. And in his own house he has had to increase security after receiving personal threats.
The list classifies companies into five categories ranging from completely withdrawing their business in Russia (regarded as category A companies), to those that maintain their operations without any changes (qualified as category F companies).
The categories are:
- They withdraw their operations
- They suspend their operations
- They reduce their operations
- They postpone new investments
- They maintain their businesses without any change
The 5 Mexican companies
Only six companies from Latin America appear on the list. Among them, a Brazilian company, Embraer, which suspended its operations in Russia, and five large Mexican companies that had commercial operations in the European country when the war began in February last year.
The Mexican firms are Gruma, Grupo Bimbo, Nemak, Binbit and Kidzania.
BBC Mundo contacted the companies to confirm the data published by Yale University and obtain more information, but only one of the firms, Grupo Bimbo, provided a corporate statement published more than a year ago about its situation in Russia. .
Grupo Bimbo (suspends operations)
“Due to the current international situation, and in line with our values, Grupo Bimbo informs that it has suspended sales of the Bimbo brand in Russia, as well as its new capital and marketing investments in that country,” says the published press release. on March 14, 2022 and to which the company referred when asked by BBC Mundo.
“We will continue to monitor and assess the situation,” the statement added.
According to the data provided by the university, the Mexican bakery suspended the sale of products that carry the Bimbo brand, as indicated by the same company. However, a Bimbo QSR plant continues to operate in Moscow, which sells products to other companies in the food sector and not to the final consumer.
On its website, the firm indicates that since 2017 it has a presence in Russia with its QSR model (Fast Food Restaurants).
Grupo Bimbo, from the Servitje family, operates in thirty countries and is considered one of the leading baking companies in the world.
Nemak (suspends operations)
In March 2022, the Nemak company, an auto parts manufacturer, announced that it was stopping production at its Russian factory.
The firm, which generated revenue of $3,800 in 2021, has more than 23,000 employees working in 38 manufacturing plants in 15 countries, according to data published by the company.
Gruma (postpones new investments)
The Mexican tortilla manufacturer Gruma has postponed new investments in Russia, but has kept the plants operating in that country operating, according to data compiled by the university.
On the firm’s website, two factories located in Russian territory are marked on a map.
The company has 73 plants in more than 110 countries. Its products are marketed through the Maseca and Mission brands, and also through local brands such as Guerrero, Robin Hood, Tosty and Juana.
Kidzania (maintains their businesses)
Founded in 1997 by Xavier López Ancona and a group of Mexican businessmen, Kidzania is a private company dedicated to children’s entertainment that operates in 27 locations around the world, according to the company’s website.
Initially known as “The City of Children”, the multinational set out to conquer international markets through the sale of franchises since it entered Japan in 2006.
Kidzania, a private company that is not listed on the stock market, landed in Moscow in January 2016, with an estimated investment of US$30 million.
The company’s business model works by seeking business partners, country by country, to become franchise license holders and build the facilities in their territories.
The parent company sells the intellectual property, designs, and support during the franchise setup. Today, the company says, it franchises 24 facilities in 19 countries, including Russia.
The company has kept its playground open in Russia after the start of the conflict.
Hernan Barbieri, Kidzania’s global director of operations, told the Mexican newspaper Reforma that the operation of the facilities in Moscow is in charge of the partner that has the franchise in that country.
“It is not a decision for us as a corporate. It is a decision that can be made by the franchisee partner”, stated the spokesperson.
The partner “felt it convenient that the children of Russia be able to maintain an entertainment option amid all the conflict and tension,” it added.
Binbit (maintains their businesses)
Yale University includes the Mexican company Binbit on the list of companies that do business in Russia.
According to the background they have gathered, the firm continues to advertise in local Russian sources and, so far, has never made a public statement ending its operations in the country.
The corporate website is still active, although there is no updated information after 2016.
The company, which claims to be dedicated to selling entertainment services for cell phones, reports that it has partnerships with 77 mobile operators, businesses in more than 50 countries, and a growth rate of 1,898% since 2006.
According to information published on LinkedIn, Elizabeth Suess Dávila has been the executive director of the company since June 2020.
The founder and director of the company, Antoni Muntaner Perello, told BBC Mundo by email: “Currently the company is in the process of closing.”
Binbit International Limited was included among the companies denounced by the International Consortium of Investigative Journalists in the case known as the “Panama Papers” in 2016.
The case was a massive leak of confidential documents that revealed how the Mossack Fonseca law firm helped its clients hide money in tax havens.
In these documents Binbit appears registered in Seychelles.
Putin’s farewell gesture
While researcher Sonnenfeld argues that the exodus of international companies has dealt a severe blow to the Russian economy, President Vladimir Putin insists that it has not affected the country.
And not only that. In February he said that the departure of foreign companies would benefit Russian companies.
“Today many of them, under pressure from their governments, are leaving our market. All the best for them,” said the president, making a farewell gesture.
What is Mexico’s position towards Russia over the war?
A few days after the Russian bombardments began on Ukrainian territory, President Andrés Manuel López Obrador, AMLO, declared that Mexico would not impose sanctions on Russia.
“We are not going to take any economic retaliation because we want to maintain good relations with all the governments of the world,” he said.
Over time, the president declared that Mexico “does not accept that one country invades another” and that his government is in favor of dialogue, avoiding referring directly to the Russian government’s campaign in Ukraine.
“I do not rate anyone, it is not Mexico’s policy to insult anyone, any people and any foreign government.”
Despite the fact that AMLO has tried to stay away from making direct statements about the conflict, a few words criticizing the German government for sending tanks to Ukraine opened the way for the Kremlin to show Mexico as an ally.
“We thank @lopezobrador for his open and clear position on the supply of German tanks to the territory of Ukraine,” the Russian embassy in Mexico said on its social networks.
Recently, President Putin praised AMLO’s foreign policy. “We value Mexico’s balanced approaches,” he said upon receiving the credentials of the new Mexican ambassador to Russia.
Trade relationship between Russia and Mexico
Mexico’s main trading partner is the United States and the level of trade with Russia is quite low compared to other countries.
Mexico imports more products than it exports to Russia, which resulted in a negative net trade balance for the Mexican economy of -US$2,206 million in 2022.
The trade balance corresponds to the difference in exports and imports between the two countries.
Exports from Mexico to Russia reached US$122 million in 2022. “It is the lowest level since 2009,” Elijah Oliveros-Rosen, an economist, told BBC Mundo senior from the Latin America Global Economics & Research division of the consulting firm S&P Global Ratings.
What products do both countries market? Mexico mainly sells vehicle parts and accessories to Russia, while it imports a series of products that belong to the following categories: intermediate iron or non-alloy steel products, raw aluminum, mineral fertilizers or nitrogenous chemicals and fertilizers with fertilizing elements.
At the end of last year there was a change, when the most imported product from Russia was wheat and meslin (a mixture of wheat and rye flour).
In total, imports from Moscow reached US$2,328 million in 2022. Oliveros-Rosen explains that this level has remained high because “the prices of commodities“.
“This factor hides a probable drop in import volumes from Russia,” he adds.
From the perspective of Russian foreign investment in the country, it reached US$2.3 million in 2022 according to official figures.
“It’s a very small portion of all the investment the country received,” says Renzo Merino, a senior analyst at Moody’s Investors Service consultancy.
Russia’s participation in total Mexican exports (0.02%) is also minimal, as is Russia’s participation in total imports (0.39%).
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