Tobacco giant Philip Morris calculated at least $16 million in damages after a Russian strike last month tore apart a warehouse in Kharkiv and damaged a raw materials warehouse, Serhii Kalnoochenko, the CFO of the company’s Ukrainian branch, told Forbes Ukraine on Feb. 27.
Flames burned through 5,000 square meters of the factory, and nearly a month after the Jan. 30 attack, the company is still assessing the full extent of the damage. Preliminary estimates account for both the factory buildings and raw materials inside.
There were no casualties as a result of the attack. The factory halted operations in 2022, and only security personnel were on site when the fire broke out and took refuge in a shelter during the attack, according to Kalnoochenko.
While the assets were insured, Kalnoochenko said no insurance company covers war-related risks in Kharkiv and the surrounding region. The company is exploring international compensation mechanisms to offset the losses, though Kalnoochenko did not specify which ones.
War risk insurance remains extremely limited in Ukraine, leaving many to recover on their own after attacks. In November, Ukraine’s government approved a partial compensation mechanism last November of up to Hr 10 million ($232,000).
For now, Philip Morris has said it will only consider rebuilding the damaged warehouses once the situation stabilizes. Since the factory lies just 40 kilometers from Russian positions, the risks are very high. It does not plan to close or sell the facility.
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