Heidelberg Materials is moving forward with a major expansion of its cement plant near St Petersburg, estimated at roughly US$200m. The project is being carried out through the German building materials group's local subsidiary, despite an earlier pledge by the parent company to freeze all further investments in Russia following the invasion of Ukraine.
In a statement, Heidelberg Materials clarified that the expansion is entirely self-financed by the local subsidiary using funds generated within the country. The company specified that the project is linked directly to compliance with local environmental and carbon dioxide regulations, maintaining that the development does not constitute a direct investment from the parent corporation. This development follows a public message from chief executive Dominik von Achten shortly after the conflict began, where he committed to halting parent company investments while continuing to support the local workforce.
The decision arrives amidst ongoing scrutiny of foreign enterprises operating in the region. Since 2022, over 1000 global companies, including industry rivals Holcim and CRH, have exited or scaled back operations in Russia. Heidelberg Materials has been active in the Russian market since 2001, operating three cement plants with a combined annual capacity of 4.7Mt to serve private concrete and residential construction suppliers.
The expansion is funded by local profits that accumulated between 2022 and 2024, which totalled approximately US$195m and represented about three per cent of the group's net income. Because international regulations and restrictions prevent these profits from being transferred back to Germany, the funds must either remain in local bank accounts or be reinvested within the Russian domestic market. This financial backdrop follows a brief legal challenge in August 2023, when the Russian prosecutor general's office briefly filed and then withdrew a lawsuit aiming to seize the shares of Heidelberg's local subsidiaries.
