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Russian Sanctions Hits German Suppliers Hard

Since the eruption of conflict in Ukraine that has left Russia at odds with the U.S. and European Union, waves of sanctions are starting to bring the pain.

Possibly to the wrong people.

German manufacturers of equipment such as pressure vessels and hot water tanks for the chemical and petrochemical industries  in the last six months have has seen a “significant” decline in orders brought on by the sanctions.

“There are two contracts from Russia we didn’t get and we think that’s for political reasons,” manufacturer MWL Apparate Bau GmbH Weber’s chief of sales Reinhard Weber told Bloomberg in a telephone interview. “They’re afraid of sanctions being extended — that they will make an order and that we won’t be able to fulfill it because of political decisions in Germany or Europe.”

Apart from sanctions disrupting supply lines, they are also increasing the costs of doing business.

“If the crisis lasts any longer, there is a great danger that many of our Russian customers will turn towards countries which are not taking part in the sanctions,” Reinhard Paetz, head of Germany’s machine maker’s association told Bloomberg. “Some companies do 30 percent to 50 percent of their business in Russia or Ukraine.”

 

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