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Samsung forced to stop shipments to Russia over currency, logistics issues

It 15:58 March 07, 2022

By Woo Jae-yeon

SEOUL, March 7 (Yonhap) -- Samsung Electronics Co. said Monday that it has temporarily suspended product shipments to Russia due to major disruptions in global logistics over the unrest over the Russian invasion of Ukraine.

"Samsung was forced to stop shipments to Russia due to various factors, including logistics issues and unstable exchange rates, like many other global companies," a spokesman of the company told Yonhap News Agency.

Global shipping companies, including Maersk, have halted most deliveries to Russia following a slew of Western sanctions against Russia, and Russia's ruble has recently plummeted to record lows amid the intensified geopolitical risks.

The South Korean tech giant said it was looking for measures to deal with the volatile business environment.

While Samsung's TV factory in Kaluga, southwest of Moscow, is in normal operation, it could also face disruptions if the current unrest drags on.

This file photo, taken Aug. 10, 2021, shows the corporate logo of Samsung Electronics Co. at its office building in Seoul. (Yonhap)

Samsung is under growing pressure to join other global companies to halt business relations with Russia, which has intensified unprovoked military aggressions in Ukraine.

Apple and Microsoft, among others, said they were suspending new sales of products and services in Russia in protest against the invasion of Ukraine.

Last week, Ukraine's Vice Prime Minister Mykhailo Fedorov, who is also the digital transformation minister, urged Samsung to take firm actions to cut ties with Russia in an open letter to Samsung Vice Chairman Han Jong-hee.

In the letter posted on his Twitter account, Fedorov asked Samsung to "temporarily stop supplying Samsung services and products to the Russian Federation, including blocking access to the Samsung Pay, Samsung-Galaxy Store and Samsung Shop."

The tech giant has been operating in Russia for nearly 30 years. The company was honored to be named "favorite brand of Russians" by Moscow-based Online Market Intelligence from 2011-2016.

Samsung was also the leading mobile device vendor in Russia last year, occupying around 26.6 percent of the market, closely followed by Apple, according to German market researcher Statista.

"We believe that such actions (stopping Samsung services in Russia) will motivate the youth and active population of Russia to proactively stop the disgraceful military aggression," Fedorov said.

"In 2022, modern technology is perhaps the best answer to the tanks, multiple rocket launchers and missiles, targeting residential neighborhoods, kindergartens and hospitals," he said.

Samsung has yet to officially reply to the request.

Over the weekend, Samsung said it will donate US$6 million to support humanitarian efforts for Ukrainian refugees, including $1 million in consumer electronics products.

The image captured from the Twitter account of Ukraine's Vice Prime Minister Mykhailo Fedorov on March 7, 2022, shows his letter to Samsung Electronics Vice Chairman Han Jong-hee. (Yonhap)

jaeyeon.woo@yna.co.kr
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