Country Report ¦ IDM
July/August 2022 ¦ international-dairy.com · 35
Russia
A dairy industry in a perfect storm
The Russian dairy industry is in a "survival mode", being
braced for the worst crisis since Soviet times as Western
sanctions wreak havoc upon production and consumption.
Russia has been subjected to sanctions for many
years before the current crisis, said Arkady Ponomarev, founder of
the Russian dairy holding Molvest. However, the new challenge is
different from what the industry has ever experienced.
"The economy that was in Russia until February 24, 2022, and
the one in which the country exists after the beginning of the
special military operation in Ukraine, are two completely different
economies," Ponomarev said.
A set of measures embarked on by the Russian Finance Ministry
and Central Bank has provided the Russian dairy industry with
a "temporary shelter", Ponomarev said. The biggest question now
is how safe this shelter is as new sanctions keep being imposed.
Besides, it is yet to be seen how long Russia could ensure "that life
is supported inside this shelter," Ponomarev added.
The Russian financial authorities have indeed protected the
dairy industry by rescuing the Russian rouble's exchange rate. Only
two weeks into the Russian invasion of Ukraine, the rouble was
down 40%, at 139 roubles to the dollar – the lowest level ever.
Since that low point on March 7, however, the Russian rouble
has staged a dramatic recovery. At the time of this writing, it was
trading at 71 to the dollar, which was stronger than it was at the
time of the invasion. Still, the exchange rate fluctuations prompted
dairy companies to suspend new investments in the Russian dairy
industry and even freeze some already launched projects.
"The sanctions have had a significant impact on the entire
dairy industry. Most companies had to suspend investment projects
and farm construction," Igor Eliseenko, general director of
the Siberian-based dairy holding company Molsib said.
"MolSib is operating normally, but at the same time, globally
the dairy industry depends on imported goods and equipment,
spare parts and packaging components," Eliseenko said, adding
that milk farms experience problems too, in the first place due to a
lack of imported feedstuff.
The Ukraine war also triggered a mass exodus of Western business
from the Russian market. As many as 300 brands pulled out
from the country or downsized local operations, including Valio.
The Finnish dairy company sold the Russian operations to Velkom
Group. With the transaction, Valio's personnel in Russia has transfered
to Velkom Group.
7th IDF Symposium on Science and Technology of Fermented Milk
29 and 30 Nov, 2022
The 7th IDF Symposium on Science and Technology of Fermented Milk will be a two day virtual event held on
29th and 30th November 2022. The event is dedicated to researchers, product developers, as well as regulators.
Symposium sessions include:
» Session 1: Innovation in fermented dairy for human health
» Session 2: New developments and opportunities in fermented dairy
» Session 3: Exploration of novel ingredients and processes for fermented dairy
» Session 4: Microstructure of dairy products
Learn more at fil-idf.org
News
/
/
/international-dairy.com
/fil-idf.org
