Russian strikes continue to rain down on Ukraine. Since Thursday, the offensive of the army of Vladimir Putin continues. Faced with this situation, Western countries are announcing numerous and severe financial sanctions against Russia. “We are going to cause the collapse of the Russian economy”, Bruno Le Maire announced on Tuesday. The Minister of Economy adds that France and its allies will “wage an all-out economic and financial war on Russia“.
After almost a week of fighting, the armed conflict is already having economic consequences for French companies. In India, Pier Augé cosmetics company already sees the repercussions of the financial sanctions imposed on Russia.
About to sign a big contract with Russia
A year and a half after taking over the company in great financial difficulty, Diane de Comte and Charles Dupont have succeeded in relaunching the activity and finding new markets. And the couple wanted to expand in Russia. “When you know that Russia is a market very inspired by Chinese and Korean consumption in terms of cosmetics, there was real potential for Pier Augé”explains Diane de Comte.
When the war broke out, the company was about to sign a big contract with Russia. “The first feeling that comes to us is first of all sadness and shockadds Charles Dupont. Then, in the background, comes the business level. We have been in discussions for several months with a large Russian distribution group, which has aesthetic clinics and above all distributes throughout Russia..
The most restrictive are the banking sanctions
Consequence of the war: the contract will not work. “For us, there is not a decrease in turnover, but a particularly significant shortfall”, continues the boss. He specifies : “We are facing a double problem. The most constraining are the bank sanctions, the exclusion from the Swift system which prevents our bank from receiving Russian money. The second problem is the devaluation of the rouble, which makes our products extremely expensive for the final consumer in Russia”.
Another difficulty for the company: she had been working with a Ukrainian supplier for a very long time. “The head of the company is still in Kiev at the moment, his employees have left the cityexplains Charles Dupont. It would be extremely inappropriate for us to talk to him about business at the moment, we ask him how we can help him”. The couple is thinking about how to help their Ukrainian partner now, but also in the longer term, to help with reconstruction.