Lab Industries (formerly Henkel Russia)

In the company's portfolio of brands in Russia for 2022: Persil, Ceresit, Schwarzkopf, Syoss, Losk, Denis, Laska, Pemos, Pemolyux, Vernel.

2023

Appointment of Alexandra Zaytseva as CEO

On October 20, 2023, it became known about the appointment of Alexandra Zaytseva as the new CEO of Lab Industries (formerly Henkel Rus). He replaced Sergei Bykovsky, who also left the post of general manager of the Cosmetics and Personal Hygiene business unit. He decided to develop his career in another business direction, the press service of the company said. Read more here.

Henkel sold Russian assets with the possibility of redemption within 10 years

Henkel sold Russian assets with the possibility of redemption within 10 years. This became known in June 2023. According to Karsten Knobel, CEO of Henkel AG, in an interview with the Rheinische Post, the option was part of an agreement to sell Henkel's Russian business to a consortium of investors. He added that the company can redeem assets in Russia in the event of a significant improvement in relations with the country.

Agreement on a buyback option with business buyers in Russia for 54 billion rubles

On May 4, 2023, Henkel, which produces products under the Persil, Schwarzkopf and Moment brands, announced the completion of the sale of assets in Russia. The transaction worth 54 billion rubles is closed, according to the reports of the German manufacturer of household chemicals.

In April 2023, it was reported that Henkel agreed with the buyer of its Russian assets - a consortium of investors, which includes Augment Investments, Kismet Capital Group and Elbrus Services - on a buyback option. This was reported by Reuters with reference to the financial director of the company Marco Liberty.

Henkel announced the completion of the sale of assets in Russia

The representative of Henkel reported that despite the deal, the concern will suffer losses from the sale of business in Russia. The company also noted that buyers have established ties with Western countries and are not under sanctions. European Union

In Russia, by May 2023, the Henkel Rus plants are located in the Perm and Stavropol Territories, Saratov, Leningrad, Ulyanovsk, Novosibirsk, Moscow and Chelyabinsk Regions. Henkel produced cleaning and detergents in Russia under the brands "Weasel," Persil, Losk, "Pemos," "Pemolyux," Vernel, etc., as well as adhesives "Moment," "Methylan," etc.

The production complex, located in the Perm Territory, is one of the largest manufacturers of laundry products in Russia. Products are produced at 70-80% from Russian raw materials, 10% of which is supplied by Perm suppliers. Earlier they reported that Henkel "will continue its production and operating activities in the Russian market in order to provide consumers with essential goods."^[1]

Henkel estimated the size of Russian assets at 0.5 billion euros

The German chemical-industrial concern Henkel intends to sell its business in Russia in the first quarter of 2023, estimating the corresponding assets at approximately €500 million. This became known on February 9, 2023 from the CEO of the company Karsten Knobel.

In the current geopolitical situation, the Henkel concern in April 2022 announced the termination of activities in Russia and withdrawal from the local market. This process was planned to be completed by the end of that year, but the procedure was delayed. The company has 11 factories in the Russian Federation, and the number of employees is about 2500 people.

Henkel products in Russia

According to Knobel, the group has already written off about €200 million due to the curtailment of activities in the Russian market. According to him, the final losses depend on what the cost of selling the business will be. The head of Henkel said that the buyer is likely to be a consortium of Russian investors. At the beginning of the sale process, there were several potentially interested in acquiring assets of international companies, but later the concern reoriented itself to Russian buyers.

Because of the diversity and size of our business, we expect a consortium of different buyers to have a better chance. The process is very complicated. The contract is signed not just by the buyer and seller - it is necessary to comply with a large number of requirements from the Russian authorities. Moreover, these requirements are constantly changing, "Knobel said in an interview with WirtschaftsWoche magazine.

It is noted that negotiations on the sale of Russian assets of Henkel as of the beginning of February 2023 entered the final phase. The concern claims that under the current conditions, it will most likely not be possible to implement the business at its real value.^[2]

2022

Henkel is only ready to sell the Perm plant with a buyback option in 7 years

There are 20 potential buyers of the Perm plant of the German concern Henkel, however, it seems that the concern does not want to leave the Russian market, Governor Dmitry Makhonin said in December 2022. Investors who interacted with the company said that the main obstacle in the agreement is that in 7 years Henkel rus plans to buy out shares: they are not going to go anywhere forever.

Renaming the company Lab Industries

On December 16, 2022, the German chemical and industrial company Henkel confirmed that its division in Russia will operate as an independent company called Lab Industries. The innovation will enter into force on January 1, 2023.

The representative of Henkel reminded TASS that in April 2022 the company decided to stop its activities in Russia.

German concern Henkel will continue to operate in Russia under a new brand

In preparing for the announced sale, it is necessary to ensure that local businesses can operate independently of Henkel's global business processes and systems, he added.

As Kommersant writes with reference to the general director of the Henkel representative office in Russia, Sergei Bykovsky, to suppliers, the company by mid-December 2022 "is working on the implementation of this decision, which implies the transfer of property rights." A prerequisite for this, he called the independence of the local company from the global business processes of Henkel.

A source in investment circles said that Henkel has not yet been able to agree on the sale of the business, calling its high estimate - more than €500 million - the most likely reason. In addition, among those wishing to purchase assets were those who are associated with persons who find themselves under Western sanctions. Infoline-Analytics CEO Mikhail Burmistrov called Henkel's fair assessment of Russian business at €600 million, but noted that in the current situation, such transactions take place at a significant discount. He explained the isolation of the Russian part of Henkel's business by his desire to reduce political pressure from the EU and buy time for pre-sale preparation.

Managing Director of Peregrine Capital Dmitry Gabyshev believes that after the separation of the Russian division of Henkel and the change of name, the local management of the company can take control. This will be an alternative to the sale of Russian business, he said. According to Mr. Gabyshev, the transfer of management to local management may include the possibility of a buyback in the future by the German side of business ownership in the Russian Federation.^[3]

Assets in Russia and Belarus put up for sale

The German chemical-industrial concern Henkel (brands Persil, Losk, Denis, Laska, Pemos, Pemolyux, Vernel) put up for sale its assets in Russia and Belarus in August 2022 . According to the company, in Russia it owns 12 offices and 11 factories in different regions.

Losses from leaving the Russian and Belarusian markets in the amount of €184 million

In August 2022, Henkel estimated losses from leaving the Russian and Belarusian markets at €184 million.

Continued work in Russia against the background of a special operation of the Russian Armed Forces in Ukraine

In April 2022, the manufacturer of household chemicals Henkel announced the termination of business in Russia. The statement was made against the background of the ongoing special operation of Russia in Ukraine.

A few weeks later, at the end of the month, a message appeared that Henkel plants in Russia are operating normally, negotiations on the sale of Russian plants are not currently underway.

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