Knauf, a construction materials manufacturer, fights back against allegations from Russia.
German building materials manufacturer Knauf continues operations in Russia amidst heavy criticism following Russia's invasion of Ukraine. The company has maintained that withdrawal from the country is complex and costly.
In a response to an investigation by "Spiegel," Knauf refuted claims suggesting that their materials may have been used to expand Russian nuclear weapons facilities. The company based in Iphofen, Bavaria, categorically denied knowingly supporting Moscow's war against Ukraine through direct product deliveries.
The report by "Spiegel" alleged that Knauf materials like gypsum or cement could have been used in the expansion of Russian nuclear weapons facilities.
Following criticism, Knauf announced over a year ago its intention to withdraw from Russia after more than three decades. However, the withdrawal process has yet to be completed. The company stated that its discussions with responsible authorities are highly complex from a regulatory standpoint, requiring diverse and lengthy approvals across various jurisdictions.
When it comes to selling their Russian subsidiaries, Western companies face significant discounts. The Kremlin has ordered that such companies can only be sold for a maximum of 60 percent of the already low estimated value, with an additional 35 percent in taxes and fees.
Knauf insists that it complies with applicable sanctions and denies assisting the Russian state in circumventing sanctions. The company's Russian subsidiaries produce and sell products independently for the local market to independent building materials dealers. However, subsidiaries have no control over where their products ultimately end up.
Knauf materials are not designed nor suitable for making or maintaining weapons systems operational. The company does not have contractual relationships with the Russian Ministry of Defense or subordinate agencies, and does not sell or deliver products to such entities.
The company aims to divest its entire business in Russia, including raw material extraction, production, and distribution, subject to the approval of the relevant Russian authorities. Around 4,000 employees are employed in Russia by the corporation.
The Knauf Group, with around 15.4 billion euros in revenue in 2022, operates in approximately 90 countries and has hundreds of plants with around 40,000 employees on all five continents. Knauf is also active in Ukraine, operating a plant in Kyiv with about 420 employees. Construction has begun on two new plants, a gypsum board plant and a gypsum plaster plant, in the west of the country.
While the company has faced criticism for its business dealings in Russia for years, it emphasizes that it has not supplied any goods to or exported anything from Russia since February 2022. The company operates solely in the Russian domestic market, it states, and complies with all EU sanctions against Russia.
- Knauf, in response to allegations by "Spiegel," has categorically denied using their materials, such as gypsum or cement, in the expansion of Russian nuclear weapons facilities.
- Despite facing criticism and discussions with regulatory authorities, Knauf's business withdrawal from Russia has not been completed due to complex regulatory requirements and significant discounts when selling Russian subsidiaries.
