[Exclusive] Samsung, LG, and Others Withdraw Staff from Ukraine One After Another... Responding to War Tensions (Comprehensive)

Our Government Designates Ukraine as a 'Travel Ban' Area
Domestic Companies Withdraw Expatriates Following Families

'Ukrainian Mechanized Brigade Training in Preparation for Russian Invasion'
[Image Source=Yonhap News]

[Asia Economy Reporters Sunmi Park, Hyeyoung Lee, Hyunseok Yoo, Donghoon Jung] As the possibility of Russia invading Ukraine intensifies, major domestic companies such as Samsung Electronics and LG Electronics are successively ordering the withdrawal of their locally dispatched employees.

According to the industry on the 14th, Samsung Electronics and LG Electronics, which have sales corporations in Ukraine, recently repatriated the families of their expatriates first and have now completed the withdrawal of employees remaining on site. Some are being temporarily relocated to other overseas regions or are in the process of moving back to Korea.

Currently, about 10 Korean companies have corporations or branches in Ukraine, including Samsung Electronics, LG Electronics, Hyundai Corporation, POSCO International, Hankook Tire, Ecovis, and Osstem Implant. Most of our companies have responded to the Ministry of Foreign Affairs' policy by repatriating the families of expatriates in preparation for the escalating tensions between Russia and Ukraine, leaving only essential personnel necessary for business operations on site.

However, as tensions between Russia and Ukraine have recently escalated, some companies have relocated even their locally dispatched employees to other safer areas or repatriated them to Korea. A Hankook Tire official said, "We are preparing to withdraw employees according to the guidance of the Ukrainian embassy." According to the Ministry of Foreign Affairs, about 300 Koreans are staying in Ukraine, and it is expected that more than 100 will depart within 2 to 3 days.

However, some Korean companies are hesitant to withdraw their locally dispatched employees entirely due to concerns that re-entry would be difficult.

Given the complex and frequently changing systems and regulations, unique business practices, and language barriers characteristic of the Ukrainian market, it is difficult to enter the market, and once withdrawn, re-entry is challenging. KOTRA, which has a trade office in Kyiv, Ukraine, said, "Since there are still companies that have not withdrawn, we are establishing a response system with the Ministry of Foreign Affairs, leaving only one local manager and one staff member to handle local businesspeople and Korean residents."

Korean companies operating in Russia are not yet considering withdrawal but are concerned about disruptions in raw material supply and sales of locally produced products.

The automotive industry faces inevitable damage if the U.S. uses the card of excluding Russia from SWIFT, the international financial settlement network, as one of the sanctions against Russia, given the large scale of export and import payments. Hyundai Motor, which has its own production plant in Saint Petersburg, Russia, with an annual capacity of 200,000 units, stated, "The impact is still minimal, but if the tense situation continues, we are closely monitoring the potential effects of sanctions."

If the U.S. uses semiconductor sanctions to block exports of semiconductors produced using U.S. technology in third countries to Russia, the domestic semiconductor market will also be affected. However, since most demand comes from the U.S. and China and customers in Russia and Ukraine are minimal, the damage is expected to be limited.

Industries heavily dependent on raw materials from Russia and Ukraine, such as aviation, shipping, petrochemicals, and cement, are concerned about the impact of price burdens if raw material prices rise sharply. The shipbuilding industry expects that if ship prices rise this year reflecting raw material costs, it could be beneficial to the industry in the short term.