By Olga Razumovskaya
MOSCOW--PepsiCo Inc. (PEP) and Russia's Coca-Cola Hellenic on
Monday said they are closing one plant each in Russia, citing the
fall in the value of the Russian ruble and unfavorable economic
situation.
The two companies are the latest food and drinks firms to cut
production in Russia as the country slides into recession. In
January, Danish brewer Carlsberg A/S (CABGY) said it would be
closing two plants in Russia, and Danone Russia said it would
consider closing some of its dairy plants if the economic situation
deteriorates further.
PepsiCo said in a statement that it would will be closing its
Ramenskoe juice-production facility near Moscow in June. The
company said part of its assembly lines will be transferred to its
Lebedyansky plant, one of the largest juice factories in Europe,
which is situated southeast of Moscow.
In its quarterly results published in February, PepsiCo said its
revenue was hit by the economic downturn in Russia, its second
biggest market by revenue after the U.S. The company said then that
its revenue in Russia was still increasing in ruble terms because
juice and dairy were in demand among Russian customers.
Coca-Cola Hellenik, which bottles and sells good under the
Coca-Cola brand and is part-owned by Coca Cola Co. (KO), said
Monday it was shutting down its plant in Nizhny Novgorod, east of
Moscow, partially due to the economic conditions and the weakness
of the ruble.
Spokeswoman Evgenia Mogilyova said the company is in the process
of optimizing its production facilities and transferring those to
the more modern plants in Samara, Oryol, Moscow and Istra. The
plant in Nizhny Novgorod will still function as a distribution and
logistics center, she added.
Workers in both PepsiCo and Coca-Cola were offered severance
packages or a transfer to different production facilities. PepsiCo
said it would be firing about 400 staff members out of around
23,000 people in Russia. Coca Cola said the company would cut 100
production jobs out of 13,000 existing in Russia.
Write to Olga Razumovskaya at olga.razumovskaya@wsj.com
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