Glass Companies Consider Options for Their Russian Facilities in light of the Ukranian War

The Russian invasion of Ukraine has led many businesses to withdraw their operations from Russia. Companies in banking, entertainment, retail, travel, and more have withdrawn or suspended operations. This is not true for all glass companies.

Defending a Decision

Koch Industries, the parent company of Guardian Industries, is the only U.S.-based glass company with float operations in Russia. Koch owns two glass manufacturing facilities in the country with 600 employees; an additional 15 Koch employees are in Russia outside of Guardian.

In a March 16 statement from Koch Industries, Dave Robertson, president and chief operating officer, defended the company’s decision to keep its Russian float operations open.

“While Guardian’s business in Russia is a very small part of Koch, we will not walk away from our employees there or hand over these manufacturing facilities to the Russian government so it can operate and benefit from them …” he said in the statement. “Doing so would only put our employees there at greater risk and do more harm than good.”

Koch’s decision to keep its Russian float lines in operation received criticism and backlash from many mainstream media outlets. Robertson issued another statement on March 24, addressing “the details that much of the media have left out but are important for you to know.”

The statement reads, “To be clear, Koch condemns the heinous actions of the Russian government in Ukraine, and shortly after learning of the invasion, Guardian suspended all new capital investments in Russia.”

He continues, “The health, safety, and well-being of all Koch company employees is our top priority … abandoning the Guardian plants in Russia would put our employees there at greater risk and do more harm than good. This is true for multiple reasons. “Russian officials have threatened to punish local employees of manufacturing facilities that shut down. Specifically, the General Prosecutor’s Office in Moscow has warned foreign
companies that shutting down their operations may lead to criminal prosecution of local employees, including up to seven years’ imprisonment … We take these threats – and our commitment to our employees – very seriously.”

According to Robertson, the Russian government also stated that it would seize and continue to operate manufacturing facilities that are abandoned or closed. Guardian isn’t unfamiliar with such a takeover. In 2016, the government of Venezuela reportedly seized its float glass plant in Venezuela.

Continuous Production

Robertson adds that float glass plants “are furnaces that typically run continuously for more than 20 years before being torn down and rebuilt. They do not turn on and off like a light switch.”

He continues, “If Guardian were to walk away from these glass facilities, it would give full control of the assets to the Russian government, who we believe would keep them running and capture 100% of the financial benefit. “Finally, and contrary to false assertions, Guardian’s operations do not aid the Russian war effort. None of the glass produced at the facilities in Russia is for military use. Eighty percent of the glass produced at these facilities is for residential, while the remainder is for office and commercial buildings.”

He adds, “This is an extremely volatile and uncertain situation in which we will continue to make decisions that we believe will avoid causing harm to our employees or Ukraine. This includes complying with all applicable sanctions, laws, and regulations. We will closely monitor the situation and modify our decisions as circumstances warrant.”

Other Operations

Guardian isn’t the only float glass company with operations in Russia. AGC Glass Group and NSG Pilkington, both based in Japan, also own float operations there.

The AGC Group issued a March 18 statement addressing the status of its Russian operations. “In light of the current situation, the group has decided to suspend investments in the country, including the periodic repair of glass manufacturing furnaces …” According to Niels Schreuder in AGC’s press office, the float line is still operating.

Pilkington began its operations in Russia in 1998. At press time, company representatives had not responded to USGlass magazine’s request for comment to confirm whether the plant is still operating.

Paris-based Saint-Gobain owns 30% of a float glass facility in Russia, but is not involved with its operations. Susanne Trabitzsch from the company’s press office says Trakya Cam, a subsidiary of the Şişecam Group in Turkey, owns 70%. At press time, Şişecam had not responded to USGlass magazine’s request for comment.

“Our local activities continue to operate, though in an autonomous and downgraded mode, to maintain the employment of our employees and mitigate the consequences of this conflict for them and their families,” she told USGlass. “Saint-Gobain is respecting all applicable sanctions and stopping all exports to customers in Russia and Belarus and imports from the two countries. All new investment projects have also been suspended.”

According to Trabitzsch, Saint-Gobain’s operations in Russia for the domestic market include insulation, gypsum, and construction chemicals.

“ … Russia represents a very small part of our business (less than 1% of our global sales),” she said.

According to retired consultant Bernard Savaete, who has more than 50 years industry experience, “Stopping a glass production line jeopardizes the production equipment … and could question a restart.” In the case of a crisis,
manufacturers may opt to put their line on a “hot hold.”

According to a Glass For Europe white paper, “… The temperature inside the industrial furnace, normally between 1500 and 1600°C, needs to be lowered gradually while progressively feeding less raw materials. A flat glass furnace is on ‘hot hold’ when the furnace temperature is lowered to approximately 1200°C, and glass production stops. Almost no virgin raw material is fed into the furnace anymore but only scrapped glass. This is meant to maintain the melt within the furnace to the very minimum … to preserve the furnace’s inner and outer structures that are made of refractory bricks.”

This story continues to develop. USGlass and USGNN will provide updates as they become available.

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