Bearing Industry Updates related to Ukraine – Russia conflict (April 2022)
SKF announced that it has decided to cease all business and operations in Russia. The intention is to divest the business in a controlled manner with the clear ambition of ensuring a future for SKF’s employees in Russia.
Rickard Gustafson, President and CEO, says: “The Russian invasion of Ukraine has a severe effect on our operations in both Ukraine and Russia. Throughout this horrible situation we have as always, respected all sanctions and export controls. We have concluded that it is impossible for us to continue our operations in Russia, as the basis and stability for our business does not exist.” “Since the start of the invasion, when we stopped our exports to Russia, we have daily evaluated the situation to understand all consequences of any action taken. As a truly global company it was important from start to take the time necessary to find a solution that would consider the impact on our employees and our overall business. We have now decided to cease all SKF’s operations, engagement, and investment in Russia. Our intention is to divest our Russian operations, with the aim to secure a future for our colleagues.”
Timken and Brenco stop their activities in Russia
Two bearing manufacturers Timken and Brenco annouced that they are pulling out of Russia and closing their sales offices due to the Russian-Ukrainian conflict. The companies participated in joint ventures for the production of axle bearings.
Timken has a bearing manufacturing plant in Tikhvin (Leningrad region, Russia) where it was cooperating together with Russian car manufacturers from the United Carriage Building Company (UWC). Axle bearings were assembled from components supplied from the USA. Last week, US headquarters informed its employees and customers that it was leaving Russia and closing its sales offices.
Brenco, a division of major American railroad engineer Amsted Rail, has a production facility in Saratov with Russian manufacturer EPK (formerly known as the European Bearing Corporation) where also axle bearings were produced. In May 2021, EPK-Brenco won preferences from the state as part of the SPIC 2.0 investment project in exchange for increasing the degree of localization. The volume of investments was 50 million dollars.
The joint market share of the Russian TBU bearings of the two companies EPK-Brenco and TIMKEN-OVK reached almost 70% at the end of 2021. Amsted Rail and TIMKEN provided licenses for production to Russian facilities, and without these licenses it is impossible to legally produce bearings. American companies also participated in the supply of a number of key components. The departure of Amsted Rail and TIMKEN actually brings to its knees the large-scale production of heavy railcars in Russia. Car builders have enough current stocks of bearings only until May inclusive.
SKF trade union helps its factory in Lutsk, Ukraine
After the outbreak of hostilities in Ukraine, the most difficult situation is observed at the factory in the city of Lutsk (Ukraine), where a plant for the production of tapered roller bearings is located with 1200 employees.
The SKF’s World Council of Trade Unions is committed to helping employees and their families. Goods are sent to Lutsk through Poland, including essential supplies, medicines, food, animal feed, etc. Humanitarian aid is collected by employees of the company’s European enterprises.
The situation is complicated by the fact that the exit from Ukraine for men aged 18 to 60 is closed as conscripts. They form the backbone of the personnel of the plant in Lutsk. However, SKF European employees are ready to host women and children if the situation get worse. The plant operates currently as a bomb shelter designed for 2,500 people.
Lutsk Bearing Plant was commissioned in 1980. In Soviet times it was called GPZ-28. In 1997, it came under the control of the Swedish concern SKF. As of February 2022, there were two bearing enterprises operating in Ukraine: SKF Ukraine (Lutsk) and HARP (Kharkiv).