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With Operations in Russia, German Firms Avoid Bite of Western Sanctions

  • Why it matters

    Why it matters

    German firms unaffected by sanctions continue to do business with Russia, but if the political situation deteriorates, some may face greater difficulties.

  • Facts

    Facts

    • There are approximately 6,000 German businesses active in Russia, according to estimates by the German Economy Ministry.
    • At the end of 2012, German direct investment in Russia was €23 billion ($30.7 billion).
    • European Union sanctions currently affect the military and arms trade, energy and finance.
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    Audio

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Der schnellste Zug in Russland: Velaro RUS / The fastest train i

 

In the town of Volzhskiy in the Volgograd region of southern Russia, two German companies, Jena Analytik and AJZ Engineering, are in the final stages of constructing and equipping a new 150-bed kidney transplantation and dialysis center. With offices across Russia, the German companies are also building a radiopharmaceutical manufacturing center for a neurosurgery institute in Moscow, financed by the Russian government.

Russia accounts for nearly one fifth of sales at Jena Analytik, which has operated in the country since before the communist revolution. “We are very involved there,” said Dana Schmidt, a company spokesperson. “And, of course, we’re watching the situation closely.”

Ms. Schmidt said the company is concerned how the sanctions could affect spending in Russia, in particular investment in the hospital sector.

The latest round of sanctions has bit into business between Russia and Germany, and even more could be on the way if the conflict in Ukraine worsens. Yet, for many small German firms long established in Russia, it’s business as usual.

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