Letter addressed to Yale School of Management
Dear Professor Sonnenfeld,
In connection with the inclusion of Cersanit in the Yale CELI list of companies, we have noticed that you have not received full information about Cersanit's activities in Russia. Therefore, on behalf of the company, I would like to share with you and your team information about the company's suspension of all new investments in the Russian Federation.
On the 24th of February 2022, Cersanit has immediately informed its companies registered in Russia that all new investments (planned and already being implemented) are suspended. The total worth of those investments amounts to EUR 83m.
- - The project for expansion of tile production capacity (a new factory with a capacity of ~5 million m2) - implementation on hold. Company was at the stage of signing an investment agreement with the town of Ivanovo and purchasing a railroad line. Total investment amount ~PLN 250m (EUR 55m).
- - Ceramics capacity expansion project with an additional 500 thousand ceramic pieces at the existing plant - completion was originally planned for 2022. Total investment cost” PLN 100m (EUR 22m) of which PLN 30m (EUR 6.5m) was spent to date.
- - Project of acrylic bathtubs production reconstruction (existing plant) - originally planned completion in the middle of 2022. Total investment cost PLN 27m (EUR 6m). Expenditure to date: PLN 8m (EUR 1.7m).
We would also take this opportunity to add that for the reasons of safety of our employees in Ukrainian production facility in Novograd, the company has suspended its operations and sales there while continuing to pay the employees their full wages (total cost of almost USD 1m per month). We have also provided housing and full financial support our Ukrainian employees and their families who decided to seek refuge in Poland.
In addition, current circumstances have forced us to suspend an investment in the Ukrainian city of Novograd (construction of a new production line for ceramic tiles). The CAPEX for this project is ca. PLN 80m (EUR 17.16m), and it would have been the largest project in Ukraine since the plant was built. Completion was originally scheduled for May 2022.
President of the Management Board of Cersanit S.A.