Page 17 - RusRPTAug23

Germany last year suffered a record deficit in corporate investments as companies looked overseas, according to the German Economic Institute, which called the situation "alarming."
Christian Faitz, co-head of chemical sector research at Kepler Cheuvreux, said he did not believe any new plants producing ammonia – which plays a part in a net zero economy through its role in hydrogen vehicles – would be built in Europe.
Meanwhile, BASF has closed one of its two ammonia plants in Ludwigshafen, citing high energy costs.
2.1 Kremlin seizes Danone and Carlsberg assets in Russia
The Russian government took control of the Russian assets of Danone and Carlsberg (the owner of Russia’s leading brewery, Baltika) in the middle of July, under a decree allowing the authorities to transfer assets owned by companies based in “unfriendly countries” looking to divest from Russia to Russia’s Federal Property Management Agency (nominally temporarily).
This is the second time that Russia has used these powers, after having earlier seized the Russian assets of Germany’s Uniper SE and the Finnish Fortum Oyj. This time, both companies had been looking for (and negotiating with) potential buyers before the decision was announced.
In what appears to be a tit-for-tat retaliation, the seizures follow on from several nationalisations of Russian owned assets in Germany and Poland, including Rosneft’s Schwedt oil refinery in Germany and Russian owned petrochemical assets in Poland.
Danone Russia will be headed by Yakub Zakriev, the nephew of Chechnya’s head, Ramzan Kadyrov.
The decision came shortly after the Russian government made it even more complicated for foreign capital to leave the country by adopting a new list of conditions. These include a prohibition of buyback options of more than two years and a compulsory listing of 20% of shares on the stock exchange, in addition to earlier conditions such as a compulsory discount of 50% and a 10% payment of the estimated market value of the company to the budget. The motivation of the Russian government is likely mixed. First of all, these seizures look like retaliatory steps for the seizure of Russian assets in the West. Second, the authorities are trying to discourage Western companies from leaving the country and thereby creating disruptions and potentially layoffs. Third, they are trying to stimulate domestic investments by taking control of inactive assets. Fourth, the government wants to ensure that it has a say on who ultimately takes ownership of these assets.
However, it is worth pointing out that policies that look like hardly more than an asset grab with a presidential seal are also likely to further discourage the kind of foreign investment that Russia is trying to attract. Russia is seeking this
17 RUSSIA Country Report August 2023 www.intellinews.com