War in Ukraine: the construction impact

By KHL editorial staff27 February 2022

In the following news feed we will provide updates on the wider implications for the construction industry of the Russian invasion of Ukraine. If you would like to provide information or comment, please e-mail any of the following: murray.pollok@khl.com, andy.brown@khl.com, mike.hayes@khl.com and leila.steed@khl.com

Tuesday 19 April
War set to hit European construction

The construction industry in Eastern Europe is set to fall by 3.4% in 2022, as a direct result of the ongoing conflict between Russia and Ukraine, according to data and analytics specialist GlobalData.

In a new report, GlobalData says economies with strong links to Russia’s will also be most significantly affected, but all neighbouring countries will feel the ripple effects of the conflict, with higher prices for energy and raw materials, as well as a loss of confidence in the region from project investors.

Read the full story here

Wednesday 6 April
Hitachi appoints new dealer in Ukraine
The European arm of Hitachi Construction Machinery has appointed Mobile Heavy Machinery (MHM) as its new dealer in Ukraine, authorised to sell medium, large and wheeled excavators, as well as medium wheeled loaders.

MHM’s regional director for Ukraine, Raivis Veckagans, said, “It is of course currently difficult to make any forecast on the future of the market, but we remain as optimistic as possible despite the war.

“There has been incredible damage to Ukraine’s infrastructure and one day there will be a huge requirement to rebuild it with the supply and support of Hitachi construction machinery.”

Monday 4 April
Rosatom to ‘keep on working’ on foreign projects
The CEO of the Russian state-owned nuclear energy business Rosatom, has reportedly insisted there are no plans to suspend any of the company’s projects currently underway outside of Russia.

Alexey Likhachev told the state news agency, Rossiya, “We have not stopped a single utility, we keep on working.”

Tuesday 29 March
Holcim to exit Russia
Holcim, the Swiss-based manufacturer of building materials, has announced that it is to initiate the process to exit the Russian market. The company said this was in line with the company’s values to operate in the most responsible manner.

The company had previously announced that it was suspending all capital investments in the market.

Read the full story here. 

Tuesday 29 March
Rosatom ‘pulling out’ of Hungarian nuclear project
The Russian state-owned nuclear energy company has reportedly told the Russian government that it plans to withdraw from the Paks nuclear expansion project in Hungary.

Rosatom has a €12.5 billion contract to deliver two new reactors to the plant. It is reportedly citing force majeure as its grounds for withdrawing from the project, due to the sanctions placed on Russia, following the country’s invasion of Ukraine.

Read the full story here

Monday 28 March
Ferrovial pledges aid for Ukraine
Spanish construction giant Ferrovial has launched a campaign, aiming to raise funds for Ukrainians affected by the Russian invasion of their country.

Ferrovial’s Stronger Together for Ukraine initiative will see the company match whatever contributions are received, with all donations used to send humanitarian and health aid to those displaced by the conflict.

Click here to see more about the Stronger Together for Ukraine campaign

Friday 25 March
Zeppelin may have to exit Russia and Ukraine
Zeppelin Group said it expects a significant decline in its 2022 business because of the war in Ukraine and that it may well have to exit both Russia and Ukraine.

The Munich-based Caterpillar dealer told Construction Europe that the worst case was that it would exit the two countries; “Depending on the duration of the war, we are currently able to maintain business in parts of Ukraine and in Russia, at least to a limited extent.

“But the more likely scenario for Zeppelin is that we will be forced to exit: either there will be nationalisation or an inability to do business.” Zeppelin said its net assets in Russia, Ukraine and Belarus were in the “low three-digit million range and are to be regarded as risky.”

Read the full story here.

Friday 25 March
Testimony from Ukraine’s rental market
Aleksander Shapovalov, the CEO of Ukraine’s largest rental business, NovaRent, has provided an update on the situation in the country.

Remarkably, Mr Shapovalov said the company is trying to continue to operate; “Today the offices in Lviv, Rovno, Odessa and partially in Kyiv are working. In other areas, work is either difficult or impossible. All employees who have an opportunity to do so are working remotely.

“Decisions on whether we can work or not are made day-to-day, since the entire territory of Ukraine is subjected to rocket attacks and active hostilities are taking place in 10 regions.

Read the full story here.

Thursday 24 March
Germany looks to hydrogen to replace Russian gas
In a move aimed at reducing Germany’s reliance on Russian natural gas, the country’s economy and climate minister, Robert Habeck, has announced plans to work with Norway on the development of a hydrogen gas pipeline project.

The agreement comes as the threat of Russia shuttering its main Nord Stream gas pipeline to the country continues to grow.

Norway’s prime minister, Jonas Gahr Støre, said following the agreement, “A number of measures are needed for Europe to reduce its dependence on Russian energy supplies. A faster development of alternative energy sources for Europe to replace Russian gas and oil will be very important in the future.”

Read the full story here.

Wednesday 23 March
A demolition expert’s perspective
Demolition industry veteran David Sinclair believes the organised nature of the Ukraine government will benefit the country when post-war requirements are assessed.

David, who was recently presented with a Lifetime Achievement Award by the US National Demolition Association, experienced working in a humanitarian crisis in Haiti after the 2010 earthquake.

In an interview to be published in the March-April issue of Demolition & Recycling International, he talks about the Ukraine situation and how demolition contractors and equipment manufacturers can help the country.

For the full story, click here

Tuesday 22 March
European Demolition Association’s ‘message of peace’ for Ukraine
The European Demolition Association (EDA) has issued a “message for peace”, saying its members stand together to condemn the military action and proactively support the protection of life and liberty.

The EDA represents national demolition associations, contractors and equipment manufacturers across the European continent.

It is making a donation to a shelter in Poland to support Ukrainian families, and recommending that national associations reach out to authorities in their countries to offer work to refugees.

For the full story, click here.

Monday 21 March

Legal situation for businesses with Russian interests
Construction law specialist Pinsent Mason has been looking at the legal ramifications for businesses with ongoing operations and/or contractual obligations in Russia.

The firm says, despite the financial sanctions and trade restrictions that have been imposed on Russia, following its invasion of Ukraine, much business with Russia remains lawful.

Pinsent Massons says, “There is a moral question for all businesses to ask about whether they consider it ethical or sustainable to continue with Russian business: many companies have withdrawn or ring-fenced their Russian related business operations; other businesses have decided to continue Russian related operations and contracts because they have no contractual right to terminate or they consider there to be a greater moral obligation to their staff and customers to continue with those projects so that jobs and livelihoods can be maintained.”

For the full story, click here.

Monday 21 March
Ardent vans deliver supplies for Ukraine refugees
A team from UK rental company Ardent Hire Solutions is driving three Ardent vans with essential supplies to Warsaw to support the Ukrainian refugee crisis.

A request statement from Ardent confirmed the company planned to leave the UK on Sunday 20 March, stay in Berlin overnight, then make the delivery today, Monday, before returning to the UK.

The company said it was responding to requests for supplies from Polska 2050 (www.polska2050.pl), an organisation helping refugees across the front line.

For full story click here.

Thursday 17 March
$100 billion damage to Ukraine
The United Nations Development Programme reported yesterday that the Government of Ukraine estimates that at least $100 billion worth of infrastructure, buildings, roads, bridges, hospitals, schools, and other physical assets have been destroyed by the war so far.

The UNDP report - The development impact of the war in Ukraine - said the war has caused 50% of Ukrainian businesses to shut down completely, while the other half has been forced to operate well below its capacity; “If the war deepens and protracts further, up to 90% of the population of Ukraine could be facing poverty and vulnerability to poverty.”

The organisation said the war could wreck two decades of economic progress.

Thursday 17 March
IMF statement on lower growth and other impacts
The International Monetary Fund (IMF) said this week that beyond the suffering and humanitarian crisis from Russia’s invasion of Ukraine, the entire global economy will feel the effects of slower growth and faster inflation.

“Impacts will flow through three main channels. One, higher prices for commodities like food and energy will push up inflation further, in turn eroding the value of incomes and weighing on demand.

“Two, neighboring economies in particular will grapple with disrupted trade, supply chains, and remittances as well as an historic surge in refugee flows.

“And three, reduced business confidence and higher investor uncertainty will weigh on asset prices, tightening financial conditions and potentially spurring capital outflows from emerging markets.

“Russia and Ukraine are major commodities producers, and disruptions have caused global prices to soar, especially for oil and natural gas. Food costs have jumped, with wheat, for which Ukraine and Russia make up 30 percent of global exports, reaching a record.”

Thursday 17 March
Trimble statement on Russia
Technology giant Trimble has the following statement on its website: “Trimble strongly condemns the unprovoked invasion of Ukraine by the Russian government. As of last week, we ceased selling our products and services in Russia and Belarus.

“Our primary focus continues to be on the welfare of our employees and partners in Ukraine and Russia. Through the Trimble Foundation, we are also contributing to urgently needed humanitarian relief for displaced Ukrainian citizens.”

Thursday 17 March
Skanska CEO statement
Anders Danielsson, President & CEO of Skanska Group, said the company had donated SEK 10 million to UNHCR and the Red Cross to help refugees and those experiencing the conflict; “These organizations are well established, have as good access lines as one can have in this situation and the ability to scale support.

“These donations are an immediate response, to a situation with long-term consequences no doubt. With this in mind, we follow the situation closely to see how we can best respond, and we above all else hope for peace.”

Tuesday 15 March
Strabag cuts Russian connections
Strabag is to close its contracting operations in Russia and terminate its agreements with Russian shareholders.

The company is majority owned by the Haselsteiner foundation in Austria but with additional ownership through a syndicate agreement involving Russian company MKAO ‘Rasperia Trading Limited’, which holds 27.8% of the shares. Rasperia is part-owned by the Russian oligarch Oleg Deripaska, who has been sanctioned by the UK government.

Strabag said today that the Haselsteiner foundation, having been unable to acquire the Russian shares, has terminated the syndicate agreement with UNIQA, Raiffeisen Groups and Rasperia.

Read the full story here.

Monday 14 March
Strabag statement on Deripaska sanctions
Vienna-based contractor Strabag said today that UK sanctions on its minority shareholder Oleg Deripaska do not prevent the company from continuing to operate in the UK, the EU or the US. Deripaska has a shareholding in Rasperia Trading Limited, which holds 27.8% of Strabag SE’s shares.

Deripaska has been subject to an asset freeze and travel ban in UK’s sanctions issued on 10 March.

Strabag’s legal office said; “Neither of Strabag UK nor any other entity within the Strabag Group, including Strabag SE, is ‘owned or controlled directly or indirectly’ by Mr Deripaska within the meaning of Regulation 7 of the UK Russia Regulations.

“With respect to sanctions, our compliance and legal department are constantly monitoring the situation in order to ensure Strabag’s continued compliance with applicable laws and regulations (this extends not only to corporate governance and business relations, but also to potential payment of dividends).

“At present, sanctions against Mr Deripaska do not prevent Strabag from continuing to do business in the UK, EU or US and we look forward to continuing to work in these countries and with our partners.”

Monday 14 March
John Deere suspends shipments
US-based construction and agricultural equipment manufacturer John Deere said it was “deeply saddened by the significant escalation of events in Ukraine. The safety, welfare, and well-being of our employees in the region remains our top priority, and we continue to support and maintain close communication with our affected teams, providing necessary resources when possible.

“Our thoughts are with our employees, their families as well as our dealers, customers and all those impacted by this crisis. Two weeks ago, we suspended shipments of machines to Russia and then subsequently, Belarus.

“We continue to monitor the situation closely while we fully abide by U.S. and international sanctions. The John Deere Foundation has additionally been working directly with a number of organizations, including multiple UN agencies, to mobilize resources to support Ukrainians impacted by the crisis.”

Thursday 10 March
Caterpillar suspends Russian manufacturing facilities 
Caterpillar, the world’s largest construction manufacturer, has issued a statement on the situation in Ukraine, which includes the information that the company is suspending operations in its Russian manufacturing facilities.

Caterpillar said, “Operations in Russia have become increasingly challenging, including supply chain disruptions and sanctions, and we are suspending operations in our Russian manufacturing facilities.” The statement added that Cat was, “complying with all applicable laws and evolving sanctions, while remaining focused on our employees, dealers and customers.”

The company added that, through the Caterpillar Foundation, it was donating more than $1 million to support both urgent and long-term needs of the Ukraine humanitarian crisis.

Wednesday 9 March
Generac halts deliveries to Russia
US-based engine and genset manufacturer Generac Holdings is the latest to react to the Russian invasion of Ukraine. The Wisconsin-based company announced that, effective immediately, it is temporarily suspending its branch operations and sales in Russia.

“Generac joins the global community in denouncing the Russian regime’s attacks on Ukraine,” said Aaron Jagdfeld, president and CEO of Generac. “Our hearts go out to the Ukrainian people, and we stand in solidarity with others around the world in calling for peace.”

Tuesday 8 March
Tadano suspends crane shipments
Japan-headquartered mobile crane manufacturer Tadano has suspended shipments to Russia, Belarus, Donetsk and Luhansk.
It said the suspension will remain in place until the military conflict between Russia and Ukraine is concluded. The company statement said, “The Tadano Group offers up its fervent hope that we all will see the quick return to a peaceful and safe world as soon as possible.”

Tuesday 8 March
Mammoet assesses future in Russia
Mammoet said it will undertake no new investments, no new projects and no new exports to Russia and will “assess our current and future obligations on a continuous basis as the situation evolves. We fully adhere to the sanctions, both in spirit and in law and make sure we stay compliant in what we do.”

The company said it had viewed events “with sadness and disbelief. Our deepest sympathy goes out to all the people and families seeking safety, shelter and peace following the violation of the territorial integrity of Ukraine by Russia.”

It added that its first priority was the well-being of its more than 1,100 employees and their families in the region; “Our teams are working around the clock to help secure their safety, using all the resources that are available. We will keep all our employees in mind throughout the region as we navigate through this crisis.”

Read more here.

Tuesday 8 March
Snorkel freezes activities in Russia
US-based access equipment manufacturer Snorkel has stopped all its business activities in Russia and is providing support where it can.

“In regards to Russia, we chose to freeze our business activities in the region when the invasion began. Subsequently, the global sanctions have eliminated any business opportunities,” said the company.

“We are providing any and all support, wherever possible, to our business contacts within the region.”

Snorkel said that there had already been cost increases following Russia’s invasion of the Ukraine. “Energy prices have already increased in relation to the situation,” adding, “As yet, steel has not been directly affected by this crisis.”

Tuesday 8 March
AECOM exits Russia
US-based construction infrastructure consulting firm AECOM has announced that it is immediately exiting its business operations in Russia.

“We support the people of Ukraine who are facing tremendous suffering as a result of Russia’s unlawful invasion,” said Troy Rudd, AECOM’s chief executive officer. “Russia’s actions are inconsistent with AECOM’s values and have compromised the business environment for AECOM, our clients and our joint activities in Russia.

“For AECOM, the impact of these actions is particularly unfortunate for our colleagues from our Russia business, and we have taken steps to provide them support during this transition. As always, our priority continues to be ensuring the safety, security and well-being of our teams throughout the region.”

Monday 7 March
Hitachi releases statement on Ukraine
Hitachi Construction Machinery said it is winding down its operations in Russia, but will continue to monitor developments in Russia and Ukraine, with hope for a peaceful resolution.

In its statement, Hitachi said, “Our highest priority is on the safety of our stakeholders, including our group employees and their families, customers, dealers, and supply chain partners.

“Hitachi Construction Machinery has made decisions to gradually stop production at Hitachi Construction Machinery Eurasia LLC, its regional headquarters responsible for manufacturing and sales in Russia and the CIS, and halt exports from Japan to Russia until further notice, because of the potential risks associated with the business.

“We are committed to making the appropriate decisions as possible based on collection of information and close communication with our bases worldwide.”

Read more here.

Monday 7 March
Impact on European and global economies
The Economist Intelligence Unit (EIU) said the war in Ukraine could reduce European economic growth this year to 2%, down from the previous forecast of 3.9%. For the Eurozone it forecasts a reduction in growth from 4.0% to 3.7%.  Global growth will fall from 3.9% to 3.4%.

The EIU said growth would be impacted by disruption in trade and supply chains (the closure of Black Sea ports and problems in the overland route from east to west) and higher prices for commidities and gas and oil. The company is also forecasting global inflation in excess of 6% this year. Read more here.

Friday 4 March
Manitou forecasts strong 2022 growth 
France-based Manitou has reported revenue growth of 18% in 2021, backed by record orders, and forecasts a further revenue rise of 20% in 2022, factoring in the war in the Ukraine.

Commenting on the group’s net sales of €1.88 billion for the year, Michel Denis, president and CEO of Manitou, said 2021 had been a ‘fantastic’ year, ending with an unprecedented order intake and a record order book of €3 billion.

Denis said, “In the absence of new major disruptions in the global economy, inflation dynamics, and based on the assessment to date of the effects of the war in Ukraine, the group expects its revenues to grow by more than 20% compared to 2021 and to sustain its operating income rate to revenue.”

Full story here 

Friday 4 March
Komatsu suspends deliveries to Russia
Komatsu said today that it was suspending shipments to Russia because of “the current supply chain disruption and the uncertainty of the financial and economic situation.”

It has set up an emergency task force headed by its President and CEO Hiroyuki Ogawa to gather information and discuss any future measures.

The company said; “Komatsu is deeply concerned about the current situation in Ukraine and is closely monitoring developments. The company sincerely hopes that the situation is settled peacefully as soon as possible.”

Friday 4 March
Alimak stops deliveries to Russia
The Sweden-based manufacturer of mast climbing and hoist equipment said it has put a hold on deliveries and sales in Russia.

“The war in Ukraine is a human tragedy and our thoughts and concerns are with all those affected by this horrible situation.

“At Alimak Group, we are continuously monitoring the developments. We are also monitoring the implications this might have for our employees, partners, customers and operation. Consequently, we have decided to stop all deliveries to Russia until further notice and we are not pursuing any new sales.”

Friday 4 March
Strabag comments on Ukraine war
Austria based contractor Strabag has issued a statement condemning the Russian invasion of Ukraine and said it was “shocked and appalled” by recent events.

The contractor said speaking out was important and that it wanted to be transparent about its shareholder structure: almost 30% of its shares are held by Russian company MKAO Rasperia Trading Ltd, which is minority owned by Russian industrialist Oleg Deripaska.

Strabag said that under Austrian law its board manages the company independently and “free of instructions from the supervisory board and company shareholders”.

Full story here.

Friday 4 March
CNH Industrial donates $0.5 million
CNH Industrial, owner of the Case Construction and New Holland equipment businesses, said it was donating US$0.5 million to support Ukrainians impacted by the war. In addition, it said it will establish a global fund to which employees can donate, with the company matching contributions.

CNH Industrial has 38 employees based in Ukraine, and a dedicated team is actively providing them with support.

“Our thoughts and prayers are with everyone affected, and we are prioritising the safety of our employees and their families in the country,” said Scott Wine, CEO, CNH Industrial.

“I am humbled by our employees’ determination to contribute in assisting the population of Ukraine, which is in urgent humanitarian need. I, alongside my fellow 37,500 CNH Industrial colleagues, wish for a positive and quick resolution to this unfolding crisis.”

Thursday 3 March
JCB pauses shipments to Russia
JCB has made the following statement on Russia; “JCB has paused all operations, including the export of machines and spare parts.”

Thursday 3 March
Comment on Russia’s construction equipment market
Chris Sleight, Managing Director of market research and forecasting company Off-Highway Research, offers this insight into the Russian equipment sector; “According to the Association of European Businesses, the Russian construction equipment market grew 48% last year to 21,375 units. This is based on data collected from all the major international suppliers selling equipment in Russia, along with several major domestic OEMs, and comprises earthmoving and road building equipment.

“Last year was the fifth consecutive year of growth for the Russian market, and the volume of machines sold was almost twice the average annual sales in the preceding seven years.

“The imposition of economic sanctions on Russia, particularly its debarment from international and banking and payment networks, is likely to see equipment sales plummet this year. Off-Highway Research estimates that only about a third of the equipment sold in Russia is manufactured domestically (although this is hard to gauge accurately, due to the large number of local manufacturers).

“We believe that even without specific sanctions against construction equipment or without manufacturers voluntarily suspending sales, shipments to Russia are likely to cease due to uncertainty over payment. We also note that the deteriorating economic situation in Russia is likely to lead to a sharp fall in demand for equipment.

“A significant proportion of domestically manufactured equipment in Russia is produced by international OEMs, which opened factories in the country in the 2000s and 2010s. No comment has yet been made by any of these manufacturers about the immediate future for their Russian operations in light of the international situation.”

Thursday 3 March
‘We can shoulder economic consequences’
Riccardo Viaggi, secretary general of CECE (the Committee for European Construction Equipment), said today that it is impossible to measure the economic consequences of Russia’s invasion of Ukraine at the moment, but insisted, “We can shoulder them”.

He was speaking at a CECE webinar, during which he admitted that “Russia is an important provider of materials and an important export market.”

In answer to a question about whether the war in Ukraine could impact the production of construction equipment, he said, “We know that these tragic events will have negative economic consequences…and the sanctions and political tensions will make business between Russia and Europe more difficult.” Yet, he stressed, this was not significant when measured against “the loss of lives and livelihoods” of those involved in the conflict.

He added, “We hope that the relevant but still modest forecasting tools we have will give us a hint of where the sentiment is going, we hope we’ll have a way to monitor that.”

Thursday 3 March
Germany accelerates alternatives to Russian natural gas
In the wake of Russia’s attack on the Ukraine, Germany has sped up plans to build its first liquified natural gas (LNG) shipping terminals to reduce the country’s dependence on Russian natural gas. Chancellor Olaf Scholz announced the plan during a special session of the German parliament called to discuss German policy in the wake of the invasion.

The possibility of building an LNG terminal at the port of Brunsbüttel on the mouth of the river Elbe was first raised in 2018, and a tender was launched in 2019. Germany depends heavily on Russian gas and the conflict is said to have accelerated the plans to build the LNG terminals as well as other energy projects, such as those involving renewable energy.

Wednesday 2 March
Aggreko to exit Russia
Power rental giant Aggreko is to sell its Eurasian business, which is mainly in Russia. Aggreko said on Tuesday it will operate the business independently from the rest of Aggreko until the sale is concluded. Revenues from the region were £64 million in 2020, representing around 5% of Aggreko’s total.

“Aggreko has a responsibility for its 500 exceptional employees in the region and will continue to support them until a transaction is complete”, said the company.

Read the full story here.

Wednesday 2 March
Skyjack parent company pledges support for Ukrainians
Linamar Corporation, parent company of Skyjack, has vowed to support the Ukrainian cause through donations and sponsorship of refugees.

In a statement to its employees, the Canadian company’s executive chairman and CEO, Linda Hasenfratz, said, “As we have all watched events unfolding around us in recent days globally, we can’t help but feel deep sorrow, concern, and apprehension over the situation in Ukraine.

“Linamar’s founder Frank Hasenfratz left Hungary in 1956 after having taken up arms against Russians occupying his country in the Hungarian Revolution. He was a freedom fighter and as such we can’t help but feel we need to support the freedom fighters in Ukraine.”

The company said it would do so in two ways. “First, Linamar will match any donation made by its employees in support of humanitarian efforts in Ukraine.”

In Canada the funds will be donated to the Canada Ukraine Foundation (CUF). The Canadian government has also pledged to match any donations made in Canada, meaning any money donated will be quadrupled before going to the cause.

“Secondly, we are working with CUF to put our hand up to sponsor refugees coming to Canada and work for Linamar. We are investigating how we might offer the same in other countries we operate in. Please join us in support of the Ukrainian freedom fighters.”

Wednesday 2 March
Dinolift ceases sales to Russia
Finland-based access equipment manufacturer Dinolift has said it will no longer sell its products or spare parts to Russia or Belarus, in response to Russia’s attack on the Ukraine.

Karin Nars, managing director of Dinolift, said, “This will of course have an impact on both Dinolift and its customers. But that is a small price to pay compared to the price that the Ukrainian people and the ordinary Russian people are paying because of this war. We hope for peace, but we fear that the situation will get much worse before it gets better.”

Dinolift has a dealer in the Ukraine, Technopodjem, based in Kharkiv, but has not heard from them since the beginning of the attacks. “Our thoughts are with them and we wish them all possible courage in this terrible situation.”

When asked how the situation would affect Dinolift’s day-to-day operations, Nars commented, “Ukrainian people are forced to focus on saving their lives, their country and their independency. They are standing up for democracy with an incredible courage. I think buying machines it not on anyone’s agenda in Ukraine right now.

“As for Russia, the war is making it very hard for companies and the people in Russia. Maybe that will be the beginning of a change in the country. Russians who have international contacts both within business and personally should be able to form an objective opinion of what is happening right now.”

Nars added that the company expects costs of components and lead times to rise as a result. “They will of course go up, as will other raw material prices. Supply-chain logistics will be even more difficult than they already were.

“It is hard to know the long-term consequences right now of this war, but as we know uncertainty is never good for business”

Wednesday 2 March
Risk of Russian cyber attack ‘heightened’
A security expert has warned of a heightened risk to construction businesses of cyber attacks from Russia.

Mike Wills of data security firm CSS Assure, said there is a “significant risk that Russia may seek to create instability within western countries…as a means to distract focus and attention away from the situation in Ukraine and onto closer, acute problems at home”.

He listed utilities, water, transport, infrastructure and supply chains among the sectors at greatest risk of cyber attack, but said, “Critical national infrastructure should be relatively hardened to attacks and they will, more than ever, be at a heightened state of vigilance”.

Read the full story here.

Wednesday 2 March
Metso Outotec ceases deliveries to Russia
Construction equipment manufacturer Metso Outotec has temporarily ceased all deliveries to Russia. Metso is a major player in the mining and aggregates sectors and around 10% of its annual sales come from Russia. It does not have any production facilities in the country.

While the mining industry is currently not directly targeted by the sanctions, sanctions against the banking sector and individuals as well as other restrictions may have an impact on Metso Outotec and our customers’ Russia related businesses.”, said Metso.

“Due to the current unclear and changing sanction situation, Metso Outotec has temporarily ceased its deliveries to Russia.”  

Tuesday 1 March
Riwal starts fundraising campaign
Netherlands-based rental company Riwal, which has operations throughout Europe including Poland, together with its parent company Prodelta, has started a fundraising campaign to support victims and refugees from the Ukraine.

In a LinkedIn post, the company said; “To help the Ukrainian people where we can, Riwal in Poland initiated a humanitarian fundraising campaign, a campaign that has the full support of both the entire Riwal organisation as their parent company, Prodelta. With this campaign we support PAH, the Polish Humanitarian Action. It is their mission to provide aid to people suffering from armed conflicts and natural disasters.

“In times like these, we as a company must take responsibility and do what we can to minimise the suffering of refugees. In Poland, refugees are cared for and provided with food, drink and basic medical needs. With this action we hope to motivate others to set up similar actions and to help the victims where possible.”

Tuesday 1 March
VDMA on the impact of sanctions
Germany’s engineering organisation VDMA said economic sanctions will require a fundamental reassessment of economic and trade relations with Russia. VDMA Executive Director Thilo Brodtmann said; “The new supply bans on various goods to Russia affect large sections of the European mechanical and plant engineering industry.”

He added; “It is now necessary to analyse the sanction conditions and their effects in detail. Counter-sanctions are also possible from the Russian side, yet it remains right to impose tough sanctions on the aggression against Ukraine.”

Tuesday 1 March
Impact on pricing of materials and supply chains
American-based construction associations have been talking about the impact of the war in Ukraine on prices and the already stretched global supply chain. 

“Russia’s unjustified attack on Ukraine has already pushed up the price of diesel fuel, gasoline and other petroleum products used in construction,” said Brian Turmail, vice president, public affairs and strategic initiatives of Associated General Contractors of America (AGC). 

“The war and counter measures by western nations are likely to affect the supply and cost of materials and equipment, including steel, aluminum, copper, zinc and nickel soon.”

Read the full news story here

Monday 28 February
Statement from Ukranian construction company
Kyivmiskbud
Kiev-based Kyivmiskbud, one of the largest housebuilders and contractors in the country, posted the following statement on Saturday; “Kyiv is a city built by us. Since 1955, Kievmiskbud has been rebuilding the capital since the last war. And we are ready and will do it again. But the main thing for today is to defend our city and our country!

“From the first day, many of [our] employees are in the ranks of the territorial defense. Some patrol the city at night, some help the army as best they can, including financially...We are strong, we will stand!”

Monday 28 February
Concerns over Turkey’s €18bn nuclear project
The future looks uncertain for Turkey’s Akkuyu nuclear power plant – being built by Russia.
Just one day before the invasion of Ukraine by Russian troops, Anastasia Zoteeva, chief executive officer of the plant, discussed the €18 billion project’s timeline with Turkey’s NTV news channel, saying the plan was to complete one of its four power units each year, between 2023 and 2026.
Russia’s state-owned nuclear energy company Rosatom has a 99.2% stake in the project.

Monday 28 February
Companies weigh up Russia involvement
Reuters has reported that BP, HSBC and the world’s biggest aircraft leasing firm AerCap are among the companies looking to exit Russia on Monday, following the invasion of Ukraine.

It reported that Norway’s sovereign wealth fund, the world’s largest, will divest its Russian assets, worth about $2.8 billion, while Australia’s sovereign wealth fund said it planned to wind down its exposure to Russian-listed companies.

The news agency added that shipping group Maersk said it was considering suspending all container bookings in and out of Russia, and two of the world’s largest logistics companies, U.S.-based United Parcel Service Inc and FedEx Corp, said they were halting deliveries to Russia and Ukraine.

Monday 28 February
Zeppelin offers evacuation to staff in Ukraine
Zeppelin Group, the Caterpillar dealer in Germany, Ukraine and parts of Western Russia, posted on linkedIn that it was “shocked and concerned by the current events in #Ukraine. The highest priority at this time is the safety of more than 600 colleagues in Ukraine. Therefore, we have offered evacuation to all employees in the region and asked them to stay at home.”

Monday 28 February
Bangladesh nuclear power plant may be delayed 
An example of the wider construction-related implications of the Ukraine crisis is provided by news reports that the Rooppur Nuclear Power Plant (RNPP) in Bangladesh could be delayed. The plant (which would be Bangladesh’s first) is to be built with Russian financial and technical support, with even the its uranium fuel coming from Russia. The country will also be involved with the nuclear waste management of the project. 

Energy expert M Tamim told The New Nation newspaper on Sunday, “The ongoing war will not impact on the power plant immediately but the construction works of it may delay, if Russian economy becomes weak for prolonging the war.”

Construction of the first unit of the power plant  is scheduled for next year, with the second unit due for completion in 2024.

Friday 25 February
FIEC voices support for Ukraine
Europe’s contractors association FIEC has voiced support for the Ukrainian construction industry and the nation. Thomas Bauer, FIEC President, said; “The development of the European Union has shown that countries with very different political and economic situations can prosper together and jointly overcome difficulties through dialogue and cooperation.

“We therefore wish to the Confederation of Builders of Ukraine (CBU), our Member Federation from Ukraine, and to the country, that this conflict can end as quickly as possible so that the people of Ukraine can live again peacefully and without fear. This will also be the moment to work on the reinforcement of the links between our organisations.”

FIEC’s director general Domenico Campogrande added that the conflict was taking place after two years of pandemic which had already put a lot of pressure on the industry “and after several months of significant increases in the prices of products and materials, as well as of energy, which directly affects the competitiveness of our companies.

Domenico Campogrande FICE Domenico Campogrande, FIEC.

“The situation will certainly further exacerbate these elements and constitute a serious obstacle to the implementation of the investments foreseen under the resilience and recovery plans”.

Friday 25 February
Impact on inflation and supply chains
In a briefing note published on Friday, Oxford Economics said the invasion had completely overshadowed the positive economic data coming out of the Euro area earlier in the week.

The economic consultant said there were risks for the industrial sector “which will continue to be put under enormous pressure, particularly in energy-intensive sectors. The imposition of strict sanctions by Western powers on Russia could make things even worse for the European industrial sector, as Russia is also a main producer and exporter of some key metals such as steel, aluminium or nickel, so any disruption to trade flows would cause further damage to already-stressed global supply chains.”

It added that the war will mean oil and gas prices will remain higher for longer and there will be an additional impact on food prices, given Russia’s role as a global exporter of grains and chemicals. It will push eurozone inflation higher than expected and lengthen the inflationary cycle.

Friday 25 February
Will hinder covid recovery, says IMF
Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) said the invasion was a matter of grave concern, first and foremost because of the human toll and suffering of ordinary people; “The conflict is also having a serious economic impact, which will worsen the longer it continues.

“This crisis comes at a delicate time, when the global economy is recovering from the ravages of the COVID-19 pandemic, and threatens to undo some of that progress.”

She added, “Beyond Ukraine, the repercussions of the conflict pose significant economic risks in the region and around the world. We are assessing the potential implications, including for the functioning of the financial system, commodity markets, and the direct impact on countries with economic ties to the region.”

Kiev, Ukraine, on Sunday 27 February. (Photo: Reuters.)

Friday 25 February
Impact on oil and gas prices
According to Chris Sleight, Managing Director of industry consultant Off-Highway Research; “The major direct threat in Europe…is the impact on oil and gas prices.

“This could become a serious issue if sanctions against Russia are extended to oil and gas exports, as it will push prices up significantly in Europe”.

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