Tuesday Jul 5, 2022
Tuesday Jul 5, 2022

S Korea: Samsung, LG, POSCO, Hyundai closely eye Ukraine crisis


Nepalnews
2022 Feb 25, 14:19, Seoul

As Russia has ordered operations in Ukraine, Korean companies have been also impacted. Korean companies have returned their expatriates from Ukraine, and are closely watching the situation.

According to the industry on the 22nd, Samsung Electronics, which operates a local unit in Ukraine, has ordered its expatriates and their families to move to Korea or nearby countries. Korean employees working at Samsung AI Research Center in Kiev also moved to other countries or returned to Korea.

LG Electronics and POSCO also have returned expatriates and their families to Korea first and temporarily relocated other Korean employees in Ukraine to Korea or nearby countries.

This is because the Ministry of Foreign Affairs has issued a Level 4 travel warning and banned travel to all regions in Ukraine. Under Level 4, Koreans and Korean companies should leave the country immediately.

However, considering that it is difficult to re-enter the local market after complete withdrawal, the companies are continuing to run their businesses in Ukraine. Local employees are currently working from home and communicating online. LG Electronics is also continuing its business with local employees.

POSCO International, which operates a grain terminal business in Ukraine, is also working as usual but has put the new projects on hold.

A business official said, "We will keep monitoring to decide whether to respond or not. As the U.S. and Europe are likely to impose sanctions on Russia, we are keeping a close eye on the situation."

Airlines are also paying keen attention. Airlines are currently operating their flights on a route bypassing Ukrainian airspace, and considering suspending flights in accordance with the authorities' guidelines.

Korean companies in Russia have not yet considered withdrawing but they also are concerned about the impacts of the Ukraine crisis. Supply disruptions of raw materials and local production delays are expected. As of last year, Russia is the 10th largest country in trade with Korea, accounting for about 1.6% of total exports and 2.8% of imports.

Samsung Electronics, LG Electronics, and Hyundai Motor, which have factories in Russia, are currently continuing the production at local plants. Samsung Electronics operates a TV plant in Kaluga near Moscow, Russia, and LG Electronics operates a TV and home appliance plant in Luza near Moscow. Hyundai Motor has production facilities in St. Petersburg.

The three companies said there is no problem with operation in Russia. However, if the Russia-Ukraine war breaks out, the demand is expected to rapidly decrease, having a serious impact on profits. In addition, there are concerns about worsening profitability and supply chain disruptions due to ruble weakness.

Currently, companies are keeping monitoring the situation. An official from the company said "There are limitations for corporate responses in this urgent situation. We continue to operate plants as usual."

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Samsung LG POSCO Hyundai tech giants Ukraine crisis Russian invasion business economy foreign trade South Korea Seoul
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