Xerox sold its legal entity in the country to Russian top management
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The American Xerox sold its legal entity in the country, Xerox (CIS) LLC, to Russian top management. They promise to continue servicing the equipment. Experts note that original cartridges for the company’s equipment, which generate the main income, can still be freely imported into Russia. Kommersant’s sources in the market consider the deal to be a formality that allows Xerox to retain local customers. However, the new owners promise to launch some new projects in the country. They do not disclose details, but emphasize that they are no longer bound by exclusive obligations with Xerox.
Xerox (CIS) LLC told Kommersant that its Russian top managers became the owners of the company, without specifying their names. According to SPARK-Interfax, the owner of the LLC changed on October 10: instead of the British Xerox Limited, Xelab LLC received 100% of the shares (registered on December 20, 2022). In the latter, 90% belongs to the president of Xerox (CIS) Anton Borodikhin, and 10% to Svetlana Borodikhin. The revenue of the Russian legal entity in 2022 amounted to 6.6 billion rubles, the net loss was 257 million rubles. The company’s assets include a rented non-residential building in Moscow on Ostankinskaya Street.
Xerox (CIS) clarified that the company will continue to provide customer service, provide services for managing printing infrastructure and automating business processes, as well as supplying “a wide range of paper products and special materials.”
Mr. Borodikhin added that previously the company had an exclusive relationship with Xerox, but now it will be able to implement its projects based on any “products and solutions available on the market.” He refused to disclose details.
After the outbreak of hostilities in Ukraine, many foreign suppliers left the Russian Federation and sold local businesses. Thus, in mid-2022, Marvel Distribution purchased the Russian assets of another American printer manufacturer, Lexmark. At that time, the company said its main goal was to attract personnel from Lexmark’s Russian office who were involved in service support, as well as to gain control over existing contracts with domestic companies (see “Kommersant” dated August 5, 2022).
According to Holodilnik.ru, from January to August 2023, the Russian market of laser MFPs (multifunctional devices) grew in units by 35% year on year, to 538 thousand devices sold. In money terms, it increased by 52%, to 18.1 billion rubles. The most popular MFP brand was the American HP with a 23% share of the market in units (a year earlier – 30%), in second place is the Japanese Canon, whose share increased by 3 percentage points, to 8%, followed by Xerox with 3% (year previously – 6%) and Brother with 2% (a year earlier 13%). The leaders in the inkjet MFP segment are HP (33% of the market), Canon (25%) and Epson (38%).
Kommersant’s interlocutor among printer manufacturers believes that managers “formally bought out Xerox (CIS) LLC for a dollar so that the American company could continue to provide technical services to large corporate clients on this basis.” Among them, according to a Kommersant source, in particular, Russian Post and Alfa Bank.
According to Kommersant’s interlocutor, in the corporate market Xerox occupied 20–25% of the Russian market in units in the segment of large devices (A3 format and above).
“Official supplies of this brand of equipment to Russia are impossible (there is no complete ban, but there is a sanction restriction on printers over $300, which includes a significant number of Xerox models.— “Kommersant”), but consumables can be imported,” adds Kommersant’s source. Finam FG analyst Leonid Delitsyn notes that the profitability of Xerox (CIS) LLC was mainly ensured by the supply of original cartridges.
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