The German chemicals giant noted, however, that its business to support food production will be exempted, “as the war risks triggering a global food crisis.” The exemption could include much of its agriculture portfolio of fertilizers, herbicides and seed treatments.

BASF said the decision to exit is driven by the recent developments of the war and in international law, including the fifth EU sanctions package. In March, the German group said it would not conduct any new business in the two countries. It said it “strongly condemns the Russian attack on Ukraine and the violence against the civilian population.”

Currently, the group employs 684 people are employed in Russia and Belarus. Its managing board said the plan is to continue to support its employees in both countries until the end of 2022, while developing “detailed plans for an orderly cessation of business” there. In 2021, Russia and Belarus accounted for only 1% of BASF’s total sales.

Under the impression of economic sanctions against Russian assets imposed by Europe and the US directly after the Ukraine invasion, BASF said Wintershall Dea, the German oil and gas it owns to 67% would have to write off its €1.1 billion financing of the Nord Stream 2 natural gas pipeline project. 

In a preliminary glance at group financial results due to be published on Apr. 29, BASF said earlier this month that its net income fell to €1.2 billion in the 2022 first quarter from €1.72 billion a year-earlier, due mainly to the impairment charge on the pipeline.

Author: Dede Williams, Freelance Journalist