War in Ukraine:\\
Industrial Sector Impact
BCG Global Advantage & Industrial Goods Practice Areas
Prepared: 14 April 2022

Prepared: 14 April 2022

The war in Ukraine is above all a politicaland humanitarian crisis…

…but is already impacting the global
economy through the industrial sector

Russia's invasion of Ukraine has led to a serious
humanitarian crisis. BCG condemns this attack
and the violence that is killing, wounding, anddisplacing so many people.

It is the duty of political, societal, and businessleaders to navigate through this crisis. The intent
of this document is to inform discussions anddecisions on the global economic impact aswell as the industrial sector impact of the war
in Ukraine.

The top priority in moments like these must be thesafety and security of people. Corporates,
governments, and non-for-profit organizations
should focus on supporting the people in Ukraine,
Russia, Europe, and globally affected (physicallyand mentally).

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Introduction to this document

The situation surrounding Ukraine is dynamic andrapidly evolving - this document reflects
information and analysis as of 14 April 2022.
It is not intended as a prediction of future eventsand is shared only as a resource for BCG and client
conversations.
2

IMPACT ON INDUSTRIAL SECTOR
Russia’s invasion of Ukraine is exacerbating a crisis among industries that were alreadystruggling to cope with supply chain bottlenecks, soaring costs, and critical material
shortages stemming from the pandemic. The ripple effects could include reduced
automobile production, delays in big infrastructure projects, major shifts in global trade,

BCG Executive
Perspectives
IN THIS DOCUMENT

and a food crisis in Africa.
Sectors that rely heavily on materials and natural gas from Russia and Ukraine areamong the hardest hit. Global agriculture, for example, was under stress prior to the war
because of high fertilizer prices. The war is driving up fertilizer costs even further,
causing the biggest leap in food prices since 1990. The impact is especially dire in Africa,
which imports much of its wheat from the two countries. Disruption in supplies of pig
iron, semifinished steel, and natural gas will hobble production of finished steel. This, inturn, could affect major construction projects worldwide and automakers in the EU.
In other sectors, such as chemicals and transportation, war-related supply shocks could
be more manageable as companies gradually shift to Asian and North American
sources of energy and materials. As a result, an increased number of goods are likely to
travel via ocean freight. And higher hydrocarbon costs could make green energy
solutions more attractive across industries.

Prepared: 14 April 2022

AGENDA

Perspective on industrial sector impact

Cross-industry trends
Selected sector impacts
Implications for leaders

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War in Ukraine:
Industrial Impact

4Prepared: 14 April 2022

Summary | Industrial Trends & Implications of the War in Ukraine
Cross-industry
trendsThis is a crisis on top of existing crises (e.g., Covid, supply chains), exacerbating price increases (e.g., oil & gas,
fertilizers) and existing supply chain shortages (e.g., semi-conductors)
Critical industrial sectors exposed to rising costs and supply shortages (e.g., food crisis), but manageable risks andbusiness upside for some segments (e.g., ocean freight, Greentech, clean energies)

Sectorimplications

Agriculture | Food crisis driven by price and supply shock, compounded by high fertilizer prices and risking severesocioeconomic consequences, especially in Africa & Middle East
Raw Materials | Scarcity of raw materials causes specific sector impacts (e.g., Steel) and second-order effects reach end users

CriticalManageable

Construction | Higher input costs & supply chain bottlenecks drive delays, and hinder infrastructure-led recovery
Chemicals | Manageable global impact of high input costs, but vulnerability and second-order impact for downstream
chemical players and customer industries if potential cuts in Natural Gas supplies were to materialize
Copyright © 2022 by Boston Consulting Group. All rights reserved.

SECTOR IMPACT

Automotive | Limited direct global sales impact; rising material, energy, labor costs stress supply baseTransportation | Change in trade patterns to cause modal shift to ocean freight and sustaining high rates
Greentech & Sustainability | Opportunity to accelerate adoption driven by energy independence, relatively more
attractive economics, but constrained by supply in the short term

Implications
for leaders

Business | Understand exposure and respond with contingency plans, proactively manage 360º risks, invest in resilienceand review long-term strategy including geopolitical risk
Policymakers | Shape evolving situation, plan for socioeconomic resilience and review long-term industrial strategy &sector-specific policies
5Prepared: 14 April 2022

War in Ukraine:
Industrial Impact

Perspective on industrial sector impact
Cross-industry trends
Selected sector impacts
Copyright © 2022 by Boston Consulting Group. All rights reserved.

AGENDA

Implications for leaders6

Prepared: 14 April 2022

War in Ukraine is a crisis on top of existing crises
EXAMPLES, NOT COMPREHENSIVE

Industrial sectors already under pressure…

… and War in Ukraine added further stress

Supply chain bottlenecks
Automotive sector already affected by '21 chip shortages

Added threat to semiconductors as Ukraine produces a key input

11.3M units of production lost in 2021 from chip shortage1~70% of global Neon gas, a critical semiconductor component2

Agriculture sector had been facing surging fertilizer prices
from demand, supply chain disruptions, energy prices, etc.

Fertilizer prices continue to rise, as Russia, Ukraine & Belarus are
significant exporters, already exacerbating the global food crisis+210% in Ammonia fertilizer prices (Sept 2020 – Sept 2021)3+45% in prices since War started; prices now 3-4x higher than in 20204

Geopolitical uncertainty
Businesses grappling with trade conflicts & geopolitical tensions~33%

of Supply Chain Leaders moved business out of China (or plan
to by '23) given need to build resilience & avoid tariff costs5

Added pressure for companies exposed to sanctions, with assets
exposed, and further global decoupling

1. AutoForecast Solutions 2.CSIS.org 3. Farm Bureau, Sept 2020 – Sept 2021 4. Green Markets, Bloomberg Weekly North America Fertilizer Price Index (Feb 18 2022 – Apr 6 2022) 5. Gartner Survey
Source: BCG analysis and experience

7

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Rising pricesPrepared: 14 April 2022

Negative industrial impact for sectors whose inputs are exposed
to rising costs and supply shortages
Top export markets

Industries primarily impacted

43

21

44%

21%

12%

7%

Materials

Construction

54

2

24%

17%

13%

11%

Materials

Greentech

19%

16%

14%

7%

Materials

Construction

37%

34%

17%

12%

17

39%

23%

8%

7%

Chemicals

Agriculture

25 3

29%

19%

12%

10%

Chemicals

Agriculture

26

28%

26%

23%

7%

Materials

Automotive

Cereals (wheat & meslin)

14 10

26%

13%

6%

5%

Agriculture

Transportation

Aluminum (non-alloy)

21

39%

19%

9%

5%

Construction

Automotive

Nickel5

20

49%

36%

4%

3%

Materials

Automotive

Titanium6

15 2

39%

32%

7%

6%

Materials

65%

14%

3%

3%

Energy impact across sectors

48%

31%

6%

6%

Energy impact across sectors% of global Pig iron (nonalloy)
exports

Anthracite coal

Semifinished product of iron or steel

27

Uranium; Plutonium2

35

Potassium chloride fertilizer
Mineral or chemical fertilizers3
Palladium

Natural gas7

17

16

Crude oil8 12

11

RussiaUkraineBelarus

Automotive

Automotive

Energy impact across sectors

Note: Trade data from 2019; Based on HS6 level except for Nickel at HS4 level (7501,7502) Filtered for products w/export value >$1B; Where no value for BY or UA; <1% of global exports 1. Analysis based on HS6 codes: 270111, 720110, 284420,
720711,711021, 310520, 750210, 760110, 310420, 271121, 100199; 2. And its compounds 3. Mineral or chemical fertilizers containing nitrogen, phosphorous, potassium; Russia indicated they might halt exports; 4. Excludes impact of indirect sanctions
i.e., on financing, transport, and sanctions on individuals 5. Hs4 level data (7501,7502) 6.Titanium on HS4 level (8108), OEC data 7. In gaseous state Source: USGS, FAO, UN Comtrade, EIA, OEC World, BCG Analysis, Web search 8. Source: STATISTA
2020, EU includes UK, EIA, US Energy Information Administration, web research

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Raw materials with high exposure1

8Prepared: 14 April 2022

Different implications across industrial sectors

Trends

CriticalManageable

Agriculture

Materials

Construction

Chemicals

Global foodsupply and priceshock; obstacles
to adjust shortterm production

Scarcity of raw
materials causes
specific sector
and second-orderindustrial impacts

Materials
disruption andhigher input costs
cause large-scale
projects delays

Manageable
global risks, butvulnerability topotential cuts in
Natural Gas

Supplydisruption

Transportation

Greentech &Sustainability

Limited direct
Trade changes
global sales impact; drive route shiftrising material,and higher costs;
energy, labor costs
opp. for oceanstress supply basefreight players

Short-term
shortages but notrare earth; opp. tominimize energy
dependency

Automotive

Risk if
potential NG1
supply cuts

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ImpactSubstitution
complexity
Pricevolatility
Opportunity
in response
1. Natural Gas. Source: BCG analysis and experience9Prepared: 14 April 2022

AGENDA

Perspective on industrial sector impact
Cross-industry trends
Selected sector impacts
Copyright © 2022 by Boston Consulting Group. All rights reserved.

War in Ukraine:
Industrial Impact

Implications for leaders10Prepared: 14 April 2022

Agriculture | War-based shock compounds food security crises,
exacerbated by droughts in Africa, Middle East, and Central Asia
Exposure of global cereal& fertilizer exports

Exacerbation of pre-War price increases

% of
world
exports

Example: Cereals
Volume of exports (M ton)

Change in price since Dec. 2020
Wheat prices

Wheat

24

35

59

29%

Conflict break-out+80%

Africa, ME, and CA face historic droughts
Severe droughts in Africa & MENA
compound import & local supply shock

+63%

+40%
34

19%

5 38

0%
01/21 04/21 07/21 10/21 01/22 04/22

Example: Fertilizers
Volume of exports (M ton)
Belarus
Muriateof Potash

11

Urea 1
Ammonia

7
4

Ukraine11

RussiaFertilizers prices

Conflict break-out

40%
+200%
13%
22%

+204%

+100%
0%
01/21 04/21 07/21 10/21 01/22 04/22

Source: Gro Intelligence; Global Data; Bloomberg Green Markets Fertilizer Index; BCG Analysis and case experience

However, other markets with record
harvests (e.g., India, Australia) may
balance supply gap
11

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CornPrepared: 14 April 2022

Agriculture | Food and fertilizer challenges drive second-order
implications

Food shock+13% food prices increase, highest FAO Food Price
Index since incepction in 19901
Food quantities unavailable, and obstacles to local
substitution (e.g., Africa & ME where 50% of cereal
imports come from Ukraine/Russia2)
Reinforcing loop

Fertilizer
crisis

+40% increase in fertilizer prices3
Farmers to minimize fertilizer use and pivot tofertilizer-light crops

Second-order impact
Change in trade patterns
Shock to livestock prices & production
Shock to household spending (e.g., 43%
of family income spent on food in Africa4)

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First-order impact

Potential social tensions, as 276 M+
people are facing acute hunger and 44 M
are on the brink of famine5

Compounding effect of other shortages (e.g., fuel) to
limit farmer spending
1. FAO Food Price Index, February-March 2022; 2. WTO Secretariat 3. Bloomberg Green Markets Fertilizer index; February 23-April 1, 2022. 4. Oxford Economics estimates, average of African nations.
5. World Food Program. Source: FAO; UNDP; WFP; BCG Analysis and case experience12Prepared: 14 April 2022

Agriculture | Potential food security crisis in Africa with deep
humanitarian implications
Africa exposure to Russia and Ukraine

Potential humanitarian crisis in Africa

5,195

2,146

Egypt
RussiaNigeria

UkraineRest of the world

1,279

530 467

MoroccoTunisia
Sudan

Strong impetus to shift staple foods to locallygrown cereals (e.g., millet, sorghum)

Outsized economic and social development
impact given high proportion of income going onfood spend

Countries already experiencing high price increases
Example: Food prices in Kenya (% increase, March 2022 vs 21)
38%

35%
20%

Cooking Gas(13kg)

Cooking oil(1Litre)Collard greens(1kg)

Source: OEC; WTO; BCG Analysis and case experience

Pressure on government investment in otherpriorities (e.g., education, health, debt reservicing)

18%

Wheat flour(2kg)

Lower effectiveness of humanitarian aid given
Ukraine is a major supplier for World Food Program(+50% wheat supplies)
13

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Example: Wheat imports (Million Ton)

Prepared: 14 April 2022

Materials | Commodities shock with second-order industrial impact, butalso influenced by balancing factors such as mining output substitution

Material

Exposure of
global exports1

Use in components & end products

Pig Iron

64%

Steel, structural components

Anthracite Coal

56%

Power generation, residencial/comercial heating

Semifinishediron and steel

38%

Steel, structural components, electromagnets

Uranium;
Plutonium

35%

Electricity, radioisotopes used in medical anddefence industries

Potassiumchloride34%

Fertilizers, medications

Palladium

26%

Process catalysts, Electrical Components

Aluminium

21%

Cables, electrical components

Nickel20%

Steel products , EV batteries

Titanium

17%

Electronic circuits, heat exchangers, paintNatural gas

16%

Key industrial heating & energy source,
chemical feedstock

1.Russia, Ukraine, Belarus share of global exports per material (see pg. 9 for detailed references)
Note: Only significant commodities included. Source: Expert inputs; BCG Analysis & experience

Supply risks…
Conflict-driven production disruptions andextended trade restrictions
Physical inability to transport and highfreight rates…but also balancing factors
Substitution by global mining & materials
players ramping up production (e.g., criticalminerals & materials)
Potential demand reduction due to parallelfactors reducing strain on markets (e.g., interestrate driven decrease in capex investments)
14

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Raw material shocks lead to 2nd-order impacts
across industrial uses

Prepared: 14 April 2022

Steel deep-dive | Most impact on EU rerollers and USA EAF2 mills;
Natural gas potentially unviable in EU to bridge green steel transition

Steel HRC prices (€/t)
2,000
1,500
1,000
500
0

Conflict break-out

Europe+32%

China FOB
N. Amer.

First-order impact
European
Union

+12%

USA

Pig iron+23%

Slab
Billet

+5%

400

+8%

China

0
Raw material prices (€/t)
800
400

Scrap Turkey CFR
Met coal

01/20

+18%

01/21

Shortage of virgin metallics like pig iron/DRI3
for EAFs to produce high quality products

01/22

OthersSecond-order impact
Producers
High NG4 prices make DRI
production with NG potentially
unviable in EU. DRI imports fromregions with low NG cost analternative solution.

New avenues need to be explored to supply
increasing fleet of flat steel EAF capacity

EU players could accelerate green
H2 DRI production by leveraging
support under REPowerEU

Potential redirection of Russian semis andfinished steel exports to China

Users

Low domestic steel prices mean room for arbitrage
for exports to EU despite duties

Looming shortage of steel forwind towers putting EU's
renewable push at risk

Low-cost Asian mills eye lucrative westernmarkets to fill supply void of Russian exports

Series of supply chain shocks (likecurrent crisis, covid, Suez blockageetc.) could lead to increased
regional sourcing by end users+24%

Iron ore

+7%

0
01/19

Semis crunch impacting reroller production andleading to increase in HRC1/plate prices
EAFs2 were already suffering from high power andmetallics costs, crisis worsens cost position+29%

Semis and pig iron prices (€/t)
800…with varying impacts across steelmaking regions

Domestic markets of countries neutral to Russia
could see influx of Russian imports

1. Hot Rolled Coil 2. Electric Arc Furnace 3. Direct Reduced Iron 4. Natural Gas. Source: Kallanish, S&P; BCG Analysis and case experience

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Higher prices & costs…

15

Prepared: 14 April 2022

Construction | Most impact on public & large-scale infrastructure,potentially hindering economic recovery efforts

Public infra.
& commercial
constructions

Residential
construction
Residential
renovation
Source: BCG Experience and analysis

Material costs increase driving:• Terms renegotiations in multi-year contracts• Substantial delays in new bids
• Players withdrawing from new bids limiting
price competition

Localized impact:• Global impact exacerbated local shortages(e.g., ~100k Ukrainian workers returning from
Poland)Limited impact, minor delays due to alreadyexisting and exacerbated supply bottlenecks
Minor "wait-and-see" effect delaying renovation
efforts during high input prices period

Second-order impact
Limited effectiveness of public
infrastructure as channel for
economic recovery support

Potential crowding-out effectin infra investment if interest
rates increase substantially

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First-order impact

Higher attractiveness of green
energy solutions, especially forresidential projects and building
operation (e.g., solar panels vsfuel-based electricity)16

Prepared: 14 April 2022

Chemicals | Potential impact for downstream chemical sector andcustomer industries if cuts in Natural Gas supplies were to materialize
DEEP-DIVE

German chemical industry exposed to Russia Natural Gas asenergy & feedstock source...and is exposed to
Russian supplies

Energy consumption,
Germany Chemical industry

Relative share of gas
used in Chemicals

Relatively limited
feedstock impact
Gas consumption
in Chemicals

Immediate shock to German economy,
as chemical industry is a key employer

44%

73%

59%

73%

25%
13%
27%

41%
27%

18%

Natural Gas1

Heat

Russian gas

Electricity

Others2

Other gas

Energy shortage risk for chemical
sector if potential cuts in Russian
Natural Gas were to materialize

EnergyFeedstock

1. Incl. electricity generation from Natural Gas. Does not include feedstock consumption of Natural Gas. 2. Incl. renewables,
nuclear power & others. Source: AGEB; Destatis; VCI; BCG analysis

Given global leading position of German
chemical players, potential secondorder shocks in key inputs fordownstream chemical sector

Potential ripple effects for key inputs
for global economy exacerbating
supply shocks (e.g., fertilizer, plastic
packages)
17

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German Chemicals strongly
rely on Natural Gas…

First and second order impacts

Prepared: 14 April 2022

Automotive | Direct risks manageable, yet crisis underscores need for
rigorous assessment of geopolitical risk & greater supply chain resilience

End market
impactLimited direct impact on global vehicle sales(Russia accounted for only 1.7M of new vehicles sold in 2021)
More acute impact on 3 players that account for >70% of sales
Inflationary / recessionary pressures increasing, but automotive
sales insulated due to semiconductor-driven pent-up demand

Assetexposure

Supplyshortage

Automotive manufacturers (OEMS) and suppliers in Russia facing
potential write-offs, or Government seizure of assets
Nonetheless, exposure relatively minor, with ~$5B of asset exposure
across major OEMs representing ~0.2 to 2% of total assets1

22 foreign automotive suppliers with presence in Ukraine(4th largest supplier of wire harnesses to Germany)
Resourcing of components will minimize long-term impact
Russia and Ukraine account for significant source of core raw
materials (e.g., Neon, Nickel, Palladium); war driving higher
prices, do not however anticipate outright risk to production

Second-order impact
Potential redistribution of global
markets, with Chinese suppliers andOEMs replacing disrupted component
and finished vehicle supply in Russia
While OEMS will be able to pass on
rising costs to consumers, suppliers
will need support as their balance
sheets are vulnerable to higher
energy, material, & labor costs
Higher fuel costs will drive
accelerated shift to EV (impact
offset by increase in Nickel costs)
Reinforced need to assess
geopolitical risk when developing
supply chain strategy and prioritizing
which markets to focus
Focus on next page

1. For OEMs that have reported Russian asset exposure (4 OEMs) as of April 6. Source: NYTimes, Broker research, HIS Markit, World Bank, IFS, HSE Consensus forecast; BCG experience & analysis

18

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First-order impact

Prepared: 14 April 2022

Automotive | Crisis and global nature of industry elevates need for arevaluing of risk and the building of more resilient supply chains

4M

NAFTA

4B
0.4M

116B

Russia

147B
10M

1.3M

Japan & Korea
Europe
China
India

187B

3M

# units manufactured by foreign companies (2021)1
Value of auto components exported (2021)2
1. IHS Markit Light Vehicle Production (2021); 2. UN Com Trade

16B

12M

270B

Implications for auto industry
Interconnectivity of global value
chains demands a much morerobust assessment of risk
Events of the last few years havebrought more fully into light thecosts of single source risk andprioritizing lowest landed cost
Looking ahead, imperative thatcompanies incorporate a broader
range of criteria for geographic
markets and sourcing selection…
…focusing more fully on geopoliticalrisks and supply chain resilience
19

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High exposure to foreign companies in major trade blocs

Prepared: 14 April 2022

Transport | 8% of global trade volume at risk, with changes in trade flows
leading to the transformation of transport routes
EXAMPLES, NON-EXHAUSTIVE

8% of global trade volume at risk

Europe1% of regional
import volume

EXAMPLE

EXAMPLENatural Gas

Wheat

14%

263 539

1
2
1

3
3
3

Asia

118 503

2

4%

3

Americas

3 84

6%Volume at risk

RoW

Total1
Seaborne

2 60

386

1,186

Overland2

12%

8%
Airborne3

Potential shift

1

EU minimizes hydrocarbon imports (REPowerEU)

2

EU substitutes imports with alternative sources

3

Russia-China Natural Gas trade intensifies(via ocean freight)

Volume at risk

Potential shift

1

Disruption to Russia & Ukraine production & export
routes2

Russia-China exports intensify, driving in-route lower
prices and reshuffling of trade patterns (e.g., from India)

3

Reduced Russia/Ukraine exports to Africa/ME
could be backfilled by Americas and Australia

1. Including Russia, Ukraine and Belarus, accounting for 87 M ton of trade among them 2. Includes rail, road & pipeline (esp. relevant in energy trade in RUS-EU) 3. Limited amount of
airborne cargo, 162k ton to World. Source: BCG Analysis and experience. Note: excludes airborne due to negligeable value

20

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Russia, Ukraine & Belarus
export volume to…
(M ton, 2021)

War-induced changes in trade flows lead to transport routes transformation

Prepared: 14 April 2022

Transport | Ocean freight to absorb modal shift, while increasein uncertainty and trade costs drive broader implications

Tanker

Ocean
Freight

Container

Lost EU pipeline energy imports to be backfilled by LNG and
crude oil imports from 3rd countries, driving freight rate increase
East-to-West volume shift from disrupted Russian rail routes
Sustained high rates & more pressure on container shortages
Commodities shock in short term, e.g., agriculture & iron ore

Bulk

Russian exports to Asia shifting from ocean to rail & road
Global supply substitution will impact demand rate outlook

Rail &
roadAir
freight

Source: BCG Analysis and case experience

Asia-Europe volume reduced as Southern Route (Central Asia)
cannot handle all Northern Route (Russia) volume
Low impact to inland routes, key to distribute seaborne trade
East-to-West supply chain delays and risks lead to increased
emergency air freight demandLonger times due to closed airspace, leading to lower capacity

Second-order impact
Varying ability to substitutecommodity shortages
depending on seaborne routes
Negative decarbonization
impact in short term due toshift to ocean freight vs pipeline
Higher hydrocarbon costs andbetter electrification economics
push green transition(e.g., electrification of heavy-dutytransport, renewable fuels)

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First-order impact

Higher trade costs anduncertainty on shortages& times accelerate
manufacturing re-location
21

Prepared: 14 April 2022

Greentech & Sustainability | Opportunity to accelerate the adoptionof 'green solutions' across industries

Political & business support of green energy
sources & technologies to secure independence• e.g., new 'Osterpaket' legislation in Germany with new
RE subsidies and simplified permitting

Relatively more attractive economics of 'green
solutions' given higher hydrocarbon prices meeting
increasing performance of green technologies,
e.g., heat pumps, xEVs

Balancing factors such as supply shortages andhigher costs (e.g., Nickel) might delay the shortterm transition to sustainable technologies

Examples across industries
Agriculture | Change in consumption habits and push
to locally sourced, sustainable foodMaterials | Green H2 as feedstock and energy source in metaltransformation processes (e.g., green steel)Construction | Solar panels for residential projects, heatpump for heating (savings through 3x efficiency vs. gas/oil)Chemicals | Opportunity to develop alternative fuels andgreen chemical products

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Push of sustainable solutions, although balanced

Automotive | Acceleration of shift to xEVs (e.g., Q1/22 USxEV sales w/ record growth while overall market down 15%)
Transportation | Electrification of light/medium duty roadtransport, increased use of renewable fuels,
Additional focus on recycling and improving collection& reverse distribution to optimize supply of scarcematerials (e.g., Nickel), but higher complexity and cost
22

Prepared: 14 April 2022

AGENDA

Perspective on industrial sector impact
Cross-industry trends
Selected sector impacts
Implications for leaders

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War in Ukraine:
Industrial Impact

23

Prepared: 14 April 2022

Industrial implications for business leaders and policymakers

BUSINESS LEADERS
Longer term

Understandexposure & respond

Proactively
manage risks

Review longterm strategy

Strengthen 360º risk
management and invest in
supply chain, production,technology & energy resilience

Understand full risk exposure,including first and second order
impacts, and set up contingency
plans for immediate response

Source: BCG experience & analysis

Assess long-term strategy andinclude geopolitical risk as
decision-making criteria for
footprint and investments

Near termLonger term

Shape thePlan for economic Review long-term
evolving situation
resilience
industrial strategy

Shape response against geopoliticaland business risks, identify immediate
actions and launch collaborations withother governments and private sector

Review sector-by-sector prospects
and design investment & growthplans to strengthen strategic
autonomy

Design response plans to economic risks (e.g.,energy shortages) in collaboration with industrial
players; identify social & humanitarian actions(e.g., emergency food supplies)

24

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Near term

POLICYMAKERS

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BCG. BCG has used public and/or confidential data and assumptions provided to BCG by the Client. BCG has notindependently verified the data and assumptions used in these analyses. Changes in the underlying data or operating
assumptions will clearly impact the analyses and conclusions.