Unilever chief executive officer Hein Schumacher. — Bloomberg
LONDON: Unilever Plc exited Russia because it was losing control of the business there, says chief executive officer Hein Schumacher, citing growing complications stemming from the country’s response to Western sanctions imposed amid the war in Ukraine.
Unilever was less able to do things like move cash in and out of Russia, review its results or influence how its brands were managed, Schumacher said in an interview with Bloomberg Television.
“I didn’t see a window into the near future where we would regain that control and that drove the decision to exit,” he said.
In October, the maker of Dove soap finalised its sale of the Russia unit to local company Arnest Group, without disclosing the value of the transaction.
The business had net assets of around €600mil (US$629mil) and included four factories and about 3,000 employees, according to Unilever.
The Russian government has made it increasingly difficult for western companies to leave, levying new taxes and slashing transaction valuations, after Western governments imposed sanctions.
Taking profits out of the country also requires Russian permission, which is hard to obtain.
“I found that in my last one and a half year, it was arguably the most difficult decision to make,” Schumacher said of his tenure at the helm of the consumer goods company, calling it a “tedious process”.
Consumer multinationals like Nestle SA, PepsiCo and Mondelez remain in Russia despite the challenges of doing business there in more than 1,000 days of the full-scale invasion of Ukraine.
US President-elect Donald Trump has pledged to quickly end the conflict, but it has intensified in recent weeks.
Trump has also vowed additional tariffs on Mexico, Canada and China.
Unilever has been making individual markets like China and India more self-sufficient since the Covid-19 pandemic, Schumacher said.
The United States has some imports from Mexico, he said, but Unilever “could reallocate our production from those factories”.
In its third quarter highlights, Unilever reported underlying sales growth of 4.5%, with volume growth increasing 3.6%. Turnover was at €15.2bil with minus 2.8% impact from currency and minus 1.5% from net disposals. — Bloomberg
