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bne May 2020
(including those from China) and inventory; mitigating any possible pricing fallout from the ruble weakness and avoiding price shocks for consumers; as well as its focus on critical product categories that are in high demand like essential household appliances.
Russian industrial companies have shown flexibility and
a willingness to adapt in order to meet stakeholder needs. Magnitogorsk Iron and Steel Works (MMK) – one of the largest steel producers in the world – introduced a high-alert mode at its enterprises and established special-response headquarters under the oversight of the company CEO in order to protect the company’s business. MMK provided a timely and detailed update to the market with regards to optimization and adaptation measures it undertakes in sales, procurement, investment programme and IT to ensure uninterrupted remote work. In order to minimize contact between employees, the company staggered the beginning time of work shifts in its shops to reduce the number of workers passing through checkpoints. MMK has also installed 26 thermal cameras at
its main plant to monitor workers' temperatures, and carries out regular disinfection measures at the plant and along the route that employees take to the workplace.
MMK’s Chairman Victor Rashnikov has since announced that he has pledged RUB500mn ($6.7mn) toward COVID-19 response efforts, including providing ventilators and other support for healthcare and educational institutions, as well as residents in the city of Magnitogorsk.
ChelPipe Group, one of world’s leading producers of tubular products and integrated solutions for the oil and gas industry, has decided to allocate more than RUB70mn for additional payments to employees of continuous production facilities in April. In particular, for those who are engaged in production during the period from April 4 – 30, surcharges will be introduced for each completed shift. In addition, the company has provided financial support to a regional branch of the Russian Union of Industrialists and Entrepreneurs, which is raising funds for emergency and priority measures to ensure the health and safety of residents in the region where it operates.
Sibur, Russia’s largest petrochemicals producer with a staff of more than 23,000, has announced a comprehensive set of anti-crisis measures covering most aspects of the company’s operations. Despite the fact that the company’s diversified business, as well as stable demand for polymer products, has largely allowed it to weather the crash in oil prices, the company is taking pre-emptive measures to allow more flexibility. The programme includes reductions in capital and operating expenditures, as well as cost optimization including a four-day week for office staff. At the same time, Sibur enterprises in Russia and Italy maintain the supply of polymers that are necessary for the production of medical products (including masks) and polypropylene film for food packaging that are critical amid quarantine measures. As of
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the end of March, the company also introduced an “internal shift” system at its largest plant in Tobolsk, where the city utilities heavily depend on the heating provided by Sibur. Employees who are tested and found to be healthy can continue to oversee critical industrial processes while living in company-provided temporary housing at the facility, which ensures their own protection as well as the sustainability of company operations and continuous provision of municipal utility services. This shift-solution is being rolled out at other Sibur facilities.
Polyus Gold, one the world largest gold producers, whose business operations and revenues haven’t been impacted by market turmoil still provides a regular and thorough update on the status of its operations and tracks and reports the number of infected staff and what measures it has in place to protect its workforce. The company has also donated
45 medical ventilators to hospitals in the regions where it operates and created a RUB250mn fund that will finance activities aimed at preventing the spread of COVID-19 in the Russian Far East. The money will be used for the procurement of personal protective devices and medical equipment for local hospitals.
Businesses and their investors have adopted particularly innovative approaches to help each other navigate the crisis. In one example, food retailer Magnit has agreed with Burger King and KFC to offer temporary employment to workers of the fast food chains in the event of branch closures. All three companies have VTB as a shareholder in Russia.
The leading Russian Private Equity firm Baring Vostok created a platform where over 40 of its portfolio companies and their partners are doing exactly the same: helping each other by keeping people employed, sharing IT resources and expertise
“Many Russian businesses are increasingly placing peoplecentred values at the core of their operations”
in handling crisis situations or other information sharing.
This platform was made open to all companies through the launch of the business information portal www.antivirus2020. ru. The project, created in partnership with the Russian Association for Electronic Communications (RAEC), aims to quickly collect and distribute information that will help the business community respond to the pandemic. This includes information about relevant Russian government initiatives, case studies and best practices in combating COVID-19,
and recommendations for safety procedures and employee support. Companies are encouraged to use the platform to share their experiences and develop a common response
to the crisis.
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