Korean Companies Have 53 Corporations in Russia… Hyundai Motor Leads with 18

Survey Results on the Status of Korean CXO Research Institutes

[Asia Economy Reporter Kiho Sung] Due to the Ukraine crisis, not only companies operating locally but also major Korean conglomerates with operations in Russia are unable to hide their anxiety. In particular, with the U.S. announcing export control sanctions against Russia on the grounds of Russia's invasion of Ukraine, it is expected that Korean companies in Russia will also suffer considerable damage.

On the 25th, the Korea CXO Institute announced that, based on a survey of the "status of overseas subsidiaries established by 72 domestic groups in Russia," a total of 53 subsidiaries operated by 16 groups were identified. About 12 Korean companies operating in Ukraine are reportedly considering temporarily suspending their business or withdrawing.

Among overseas subsidiaries established in Russia, Hyundai Motor Group had the largest number with 18 subsidiaries (34%). One out of every three overseas subsidiaries deployed in Russia belonged to Hyundai Motor Group.

Hyundai Motor Group established Russian subsidiaries through its domestic affiliates including Hyundai Motor, Kia, Hyundai Steel, Hyundai Construction, Hyundai Glovis, Hyundai Engineering, Hyundai Wia, Innocean, and Hyundai Material. The business fields are diverse, ranging from finished car manufacturing and parts sales to software development, automotive A/S parts sales, overseas steel service centers, construction, transportation services, advertising agency, metal and non-metal raw material recycling, and management consulting.

Notably, Hyundai Motor directly controls the 'HMMR' and 'HTBR' subsidiaries. Hyundai Steel operates a local subsidiary, and Hyundai Construction continues its business through an affiliate.

Samsung and Lotte Group each established 9 subsidiaries in Russia, about half the number of Hyundai Motor. In addition, Samsung C&T, Samsung Heavy Industries, Samsung SDS, and Cheil Worldwide are major shareholders with affiliates in Russia.

Lotte created a Russian subsidiary for lodging facilities through Hotel Lotte. Lotte Trading, Lotte Confectionery, and Lotte Shopping have also been targeting the Russian market for some time.

SK, CJ, Doosan, and KT&G groups each have 2 subsidiaries in Russia. For example, SK Lubricants, a domestic company under SK, operates a Russian subsidiary for petroleum product sales.

CJ established a subsidiary in Russia for food manufacturing, with CJ CheilJedang as the major shareholder. Doosan operates a local subsidiary through Doosan Construction, and KT&G has an affiliate for tobacco manufacturing and sales.

Six groups have each established one subsidiary to target the Russian market. These include LG, POSCO, DL, Hyosung, SM, Hankook Tire, Amorepacific, Hite Jinro, and Janggeum Shipping Group.

Oil Sun Oh, head of the Korea CXO Institute, explained, "For Korean conglomerates' overseas subsidiaries operating in Russia, if the U.S., its allies, and Europe proceed with high-intensity financial and economic sanctions against Russia, there is a high possibility of direct economic damage such as factory shutdowns. Especially if the war between Ukraine and Russia becomes prolonged, instability in the supply of oil and natural gas will inevitably cause economic losses to domestic companies across various industries."

This content was produced with the assistance of AI translation services.