In light of the loss of the European market, the Russian gas monopoly Gazprom has decided to change its strategy and engage in the production of household appliances. The company plans to start assembling and producing washing machines and refrigerators by the end of the year, driven by the need to adapt to new economic realities.
This is reported by Finway
Plan for Reorientation to a New Market
The subsidiary Gazprom Household Systems will organize production based on the factory of the German conglomerate Bosch, located near St. Petersburg. The factory was transferred under the control of Gazprom in the summer of 2024, when Russian President Vladimir Putin signed the relevant decree.
Before the war, this enterprise produced over a million household appliances annually. However, Gazprom may face serious challenges related to software for the machines, as Bosch withdrew software licenses when exiting Russia in 2023.
Financial Difficulties and New Challenges
Despite these issues, Gazprom Household Systems has already reported a profit of 140 million rubles in 2024 due to the production of gas stoves. At the same time, according to Financial Times, the total net loss of Gazprom in 2024 amounted to 1.08 trillion rubles, and the company’s foreign currency reserves fell more than fifty-fold to 13.5 million US dollars.
The loss of the European market could cost Gazprom 15 trillion rubles. Despite attempts to return to the EU market, the increase in liquefied natural gas (LNG) supplies from the USA and Qatar makes the return of Russian gas to Europe unlikely.
To compensate for financial losses, Gazprom and the Russian government are forced to raise gas prices for domestic consumption. While previously tariffs increased by 3-4% per year, in 2024 the increase for industry has already exceeded 10%. Analysts believe that without a change in Russia’s political course and improvement in relations with the West, the restoration of Russian gas exports to the EU is unlikely.