Siemens to wind down Russian operations

Siemens to wind down Russian operations
A Siemens H-class gas turbine / Siemens
By bne IntelliNews May 12, 2022

German engineering giant Siemens has announced that it “will exit the Russian market as a result of the Ukraine war”, and it is starting the proceedings to wind down its industrial operations and all industrial business activities. 

The company said that that “the comprehensive international sanctions, as well as current and potential counter-measures, impact the company’s business activities in Russia, particularly rail service and maintenance”.

As reported by bne IntelliNews, the possible departure of Siemens is one of the most closely watched foreign industrial major pullouts out of Russia due its major role in the supplies of gas turbines. Siemens did not specifically comment on the sales of turbines in the press release.

Siemens most significant market-leading business in Russia is gas turbines used to power generation stations. About 50% of Russia's electricity is generated using natural gas, and a major generation capacity modernisation drive launched by the government also included a state programme for supporting gas turbine production.

Previously Siemens survived a sanction-busting embarrassment when its gas turbines were used to power utility assets in the annexed Crimea peninsula, and it even solidified its presence in Russia by playing along with Kremlin’s localisation demands.

Should Siemens indeed pull out of Russia for good, it is unclear whether alternatives to Siemens turbines will be provided by domestic players. 

Russian state utility major InterRAO planned to invest $0.8bn in the development of gas generation turbines, with a goal to sell over 20 turbines by 2030. However, InterRAO operates the project through its Russian Gas Turbines (RGT) joint venture with General Electric, which is likely to be scrapped due to sanctions.

Another contender on the gas turbine market is REP Holding, a subsidiary of Russian Gazprombank, but it also operates as a joint venture with a foreign company, the Italian Ansaldo Energy.

Siemens also holds 65% in a joint venture with Power Machines, the engineering company of sanctioned steel tycoon Alexei Mordashev. Mordashev also tried to compete with Siemens for the production of gas turbines and previously rallied state support for his efforts to produce turbines domestically. His Power Machines has repeatedly urged authorities to shift lucrative state contracts for gas turbines away from foreign companies like Siemens and it has aimed for gas turbine contracts together with ODK Saturn, a subsidiary of Russian state technology agency Rostec.

In Russia Siemens also operates Siemens Transformatory. Siemens Gamesa develops renewable energy projects with Enel Russia. It also produces electric intercity trains Lastochka through its subsidiary Sinara, which  operates a joint venture with Urals Locomotives.

Previously in March Siemens already notified the Russian Railways of the suspension of a contract on purchases of new Sapsan electric trains. The €1.1bn contract was signed in 2019 and covered purchases and maintenance of 13 new Sapsans, with the deliveries scheduled for 2022.

Read in IntelliNews Pro
Get IntelliNews Pro

Related Content

PANNIER: Central Asia’s population is growing, but its water resources are rapidly shrinking

Turkmenistan: Pledging the depths

This winter’s gas crisis in Europe is already over before it began

News

Putin to run for president in an election where the voters don’t matter

Russian President Vladimir Putin ended months of speculation and officially declared his intention to run for re-election in 2024 on December 8.

Hungary subtly turns down Kyiv proposal for Orban-Zelenskiy meeting, former foreign minister says

Hungarian Foreign Minister Peter Szijjarto has subtly rejected an offer from Kyiv for a meeting between President Volodymyr Zelenskiy and Prime Minister Viktor Orban, according to first commentaries after the news broke on December 7.

Turkey allows European Parliament rapporteur to visit Osman Kavala in prison

On same day, official warns Ankara to dial down the abrasive rhetoric, saying: "You are completely isolated. The only real friend you have is Azerbaijan."

Slovakia’s new government approves dismantling of Special Prosecutor Office

European Commission warns cabinet to wait before going ahead with controversial changes in the legal system.

International banking groups mull expansion in CEE region

Half of the cross-border banking groups active in Central, Eastern and South-Eastern Europe say they want to “selectively expand” in the region, shows the latest EIB survey.

Putin to run for president in an election where the voters don’t matter
11 hours ago
Hungary subtly turns down Kyiv proposal for Orban-Zelenskiy meeting, former foreign minister says
20 hours ago
Turkey allows European Parliament rapporteur to visit Osman Kavala in prison
1 day ago
Slovakia’s new government approves dismantling of Special Prosecutor Office
1 day ago
International banking groups mull expansion in CEE region
2 days ago

Follow Us On

Most Read

  1. Putin's approval rating up to 85% in November, Russians happy with the country's direction
    5 days ago
  2. Oil continues to flow to Israel via Turkey despite Erdogan’s vehement speeches on plight of Gaza
    1 month ago
  3. LONG READ: The boomerang effect: sanctions hurt Europe more than Russia
    7 days ago
  4. Former Kazakh leader Nazarbayev confesses to polygamy with Miss Kazakhstan 1999
    3 days ago
  5. Top Ukrainian politician David Arakhamia gives seventh confirmation of Russia-Ukraine peace deal agreed in March 2022
    12 days ago
  1. Oil continues to flow to Israel via Turkey despite Erdogan’s vehement speeches on plight of Gaza
    1 month ago
  2. Top Ukrainian politician David Arakhamia gives seventh confirmation of Russia-Ukraine peace deal agreed in March 2022
    12 days ago
  3. Russia overtakes Germany to become fifth biggest economy in the world in GDP on a PPP basis
    4 months ago
  4. Armenia marks new era with French military purchases
    10 days ago
  5. Lavrov confirms Ukraine war peace deal reached last April, but then abandoned
    2 months ago

Reports

SELECT `n`.`nid` AS `id`, `n`.`title`, 'bne IntelliNews' AS authors, 'bne IntelliNews' AS bylines, `wc`.`field_website_callout_value` AS `summary`, `smc`.`field_social_media_callout_value` AS `social`, `pd`.`published_at` AS `date`, `p`.`field_publication__tid` AS `publication_id`, `fm`.`uri` AS `image`, `fspcaption`.`field_story_photo_caption_value` AS `image_credit`, `fspcredit`.`field_story_photo_credit_value` AS `image_author`, `ws`.`field_website_sections_tid` AS `section_id`, `fdfs`.`field_subject_tid` AS `subject_id`, `db`.`body_value` AS `body`, `fm2`.`uri` AS `pdf`, `et`.`field_enable_tracking_value` AS `tracking`, `ht`.`field_head_tags_value` AS `headTags`, `bt`.`field_body_tags_value` AS `bodyTags` FROM `node` AS `n` LEFT JOIN `field_data_field_website_callout` AS `wc` ON wc.entity_id = n.nid LEFT JOIN `field_data_field_social_media_callout` AS `smc` ON smc.entity_id = n.nid LEFT JOIN `publication_date` AS `pd` ON pd.nid = n.nid LEFT JOIN `field_data_field_publication_` AS `p` ON p.entity_id = n.nid LEFT JOIN `field_data_field_story_picture` AS `sp` ON sp.entity_id = n.nid LEFT JOIN `file_managed` AS `fm` ON fm.fid = sp.field_story_picture_fid LEFT JOIN `field_data_field_story_photo_caption` AS `fspcaption` ON fspcaption.entity_id = n.nid LEFT JOIN `field_data_field_story_photo_credit` AS `fspcredit` ON fspcredit.entity_id = n.nid LEFT JOIN `workflow_node` AS `wn` ON wn.nid = n.nid LEFT JOIN `field_data_field_website_sections` AS `ws` ON ws.entity_id = n.nid LEFT JOIN `field_data_field_subject` AS `fdfs` ON fdfs.entity_id = n.nid LEFT JOIN `field_data_body` AS `db` ON db.entity_id = n.nid LEFT JOIN `field_data_field_file` AS `ff` ON ff.entity_id = n.nid LEFT JOIN `file_managed` AS `fm2` ON fm2.fid = ff.field_file_fid LEFT JOIN `field_data_field_enable_tracking` AS `et` ON et.entity_id = n.nid LEFT JOIN `field_data_field_head_tags` AS `ht` ON ht.entity_id = n.nid LEFT JOIN `field_data_field_body_tags` AS `bt` ON bt.entity_id = n.nid WHERE (n.status = 1) AND (n.type = 'article') AND (n.nid = 244170) AND (wn.sid= 3) AND (p.field_publication__tid IN (2465,2851,3184,3159,3266,3264,3270,3265,3267,3268,3269,3171,3168,3185,3170,1346,1345,3180,3175,3254,3249,1207,1208,3181,3231,3177,3186,3178,1003,3187,2975,3204,3198,3188,3202,3196,3250,3189,3160,3161,3312,3313,3173,3314,3315,3167,3259,3257,3263,3258,3260,3261,3262,3174,3316,3165,3192,3163,3282,3190,2811,3256,3317,3162,3318,3191,3297,3182,3179,3166,3319,3376,3320,3172,3255,3169,1008,3203,3197,3321,3252,3164,1307,3322,3183,3220,3176,3201,3323,1327,1020,1006,1009,1013,1014,1018,1005,1328,1010,1011,1002,1012,1311,1330,1017,1016,1019,1004,1001,1334,1335,1336,1015,1337,1338,1339,1340,1341,2496,2501,2517,2529,2506,2505,2524,2513,2526,2537,2489,2490,2520,2536,2488,2532,2500,2515,2503,2493,2527,2523,2510,2525,2498,2499,2528,2507,2487,2511,2521,2502,2491,2519,2497,2492,2514,2495,2509,2512,1629,3358)) LIMIT 1
Dismiss