British consumer goods giant Unilever on Thursday, October 10, completed the sale of Unilever Russia, finally joining other multinationals in exiting the country following its invasion of Ukraine in February 2022.
Unilever said in a statement that it had offloaded the subsidiary to Arnest Group, a Russian manufacturer of perfume, cosmetics and household products, for an undisclosed amount. Unilever said its business in Russia’s close ally Belarus was included in the sale.
“The completion of the sale ends Unilever Russia’s presence in the country,” Unilever chief executive Hein Schumacher said in Thursday’s statement. “This work has been very complex, and has involved separating IT platforms and supply chains, as well as migrating brands to Cyrillic.”
He added that the sale “includes all of Unilever’s business in Russia and its four factories in the country”.
The terms and amount of the deal have not been disclosed.
While strongly condemning Moscow’s invasion of Ukraine, Unilever joined other multinationals that decided to maintain operations in Russia, triggering widespread criticism.
In July 2023, Kyiv’s response had been to place Unilever on Ukraine’s “International Sponsors of War” list, together with other multinational companies such as Mondelez or Leroy-Merlin. Companies in the list are accused of financing the Russian war effort in Ukraine through taxes and duties paid in the territory.
While many other foreign firms exited Russia, Unilever insisted on a need to keep supplying consumers in Russia with food and hygiene products made in the country.
According to Unilever, the Russian market represented 1% of its 2023 net profit — down 15% to 6.5 billion euros. The company, which owns brands such as Dove, Axe, Rexona Vaseline or Magnum, said it employed around 3,000 people in Russia, where it continued to supply its locally manufactured food and hygiene products.
After the Russian invasion, Unilever said it had suspended “all imports and exports to and from Russia” as well as all advertising spending in the country, and would no longer invest there.
According to a 2023 estimate by the Kyiv School of Economics in, Unilever will pay at least USD331 million (just over EUR300 million) in taxes in 2022 in Russia.
The Arnest Group, the buyer of Unilever’s Russian assets, is a long term partner of the multinational. Arnest has been producing cosmetics and household chemicals for Unilever for more than 17 years, both for the domestic market and for export.
“Over the years of working together with Unilever, we have developed a trusting partnership. The expertise acquired during this time will allow us to effectively develop the business, increasing the volume of production and the representation of the company’s products in retail. We intend to ensure the implementation of the investment program and fulfill all social obligations, which are an important component of the deal,” said Alexey Sagal, President of Arnest.
