According to a survey by Teikoku Databank Ltd, more than 20% of major Japanese enterprises that conduct business in Russia have reportedly decided to stop their operations in the country following Ukraine’s invasion by Moscow, which has prompted economic sanctions against Russia by Western nations.
However, none of the surveyed company had plans of pulling out completely from the Russian market.
In its survey of more than 168 firms operating in Russia, the credit research company found that 37 of them plan on halting operations in the country as of 15th March due to the worsening situation amid supply chain and logistics disruptions.
Out of the 37 firms, 28 are manufacturers of cars and heavy construction equipment.
While some of the major firms like Fast Retailing and Toyota have joined the list of global businesses, including Apple and McDonald's, stopping operations in Russia, the majority of the businesses surveyed had been left in limbo as the situation with the war remains unclear.
If these companies continue operating in Russia, their reputation will be at risk as such a move will be considered as supporting the invasion. But they are also facing threats from the Russian government, which has vowed to nationalize the assets of businesses that decide to withdraw from the country.
Teikoku Databank stated that the number of companies halting their operations in Russia is expected to increase further because of these risks.
Of the 37 firms halting operations, 22 chose to suspend transactions, such as shipping products to Russia, while 7 chose to halt goods productions, and 4 opted to suspend local operations.
Auto major, Toyota, had halted operations at its St. Petersburg plant in March citing disruptions in supply-chain and ordered its Russia-based Japanese staff to return back home.
Fast Retailing, a Japanese retail holding firm whose subsidiaries include Uniqlo, Theory, and J Brand, stated that it will be temporarily closing down all of its stores in the country.
Last month, Ukrainian President, Volodymyr Zelenskyy, spoke to Japanese lawmakers in a video link, asking them to ban trading with Russia in order to stop its ‘tsunami’ of invasion into his country.