Go to ...

The Newspapers

Gathering and spreading news from various Russian Newspapers

The Newspapers on Google+The Newspapers on LinkedInRSS Feed

Thursday, February 15, 2018

Poroshenko blames Russia unnecessarily in the closure of the factory Roshen in Lipetsk


Corporation Roshen, owned by Ukrainian President Petro Poroshenko, decided to close the production of chocolates and wafers in the Lipetsk region. Ukrainian owner blames it on Russia. However, Poroshenko himself brought “live” the company prior to closing. The new owner will be able to start generating profit with minimal investment.

Corporation Roshen, owned by Ukrainian President Petro Poroshenko, announced the closure of production in Lipetsk confectionery factory Roshen. “Full stop production and conservation of industrial and infrastructure projects planned for April 2017” – said in the message.

“The factory is alive. If it comes to the sale, the new investors will start in two minutes”

The General Director of factory Oleg Kazakov, who is now in Kiev, has confirmed the cessation of work in April, after the factory will produce a purchased raw material. Then the three mine sites – in Lipetsk and Sentsovo villages and Kozyreva – will be closed.

With 2013 production at the Lipetsk confectionary factory has decreased three times, complaining of Roshen. If in 2012-2013 the factory produced up to 10-12 thousand tons of confectionery products per month, in 2016 – only 3 thousand tons, said the Cossacks.

The reasons for the closure of the factory of the Roshen Corporation called the economic and political. The sharp drop in production there, of course, blame Russia.

“Starting with 2013 production at the Lipetsk confectionary factory has decreased three times. The reason for this was the sharp drop in range after the unjustified ban by Rospotrebnadzor in 2013, imports of Ukrainian Roshen products to the Russian Federation, and active discrediting the activities of the factory in Russian and Ukrainian media, and pressure authorities in a number of regions at trade organizations for the sale of products of the Lipetsk confectionery factory, and diminished overall purchasing power of the population”, – says the statement of Ukrainian Corporation.

In fact, the prohibition to put the candy in Russia hardly could affect the production of the Lipetsk plant, which is located on the territory of Russia – the main market for it has remained open. Likely to suffer should have been factory Poroshenko located in Ukraine. In addition, a ban was caused by violations of standards of quality and safety of Ukrainian products, such as milk chocolate was discovered a dangerous chemical compound benzpyrene.

Hard black PR against the Lipetsk factory in the media, suggests that the Ukrainian Corporation were not observed.

The charges are the same Ukrainian group to the Russian authorities that they banned the retail to sell the products of the Lipetsk confectionery factory, require evidence. But if theoretically, such an unofficial ban was then the factory Poroshenko in Lipetsk would be closed a few years ago.

Press Secretary of Russian President Dmitry Peskov also ruled out any political pressure on Roshen. The decision to close a confectionery factory in Lipetsk was taken by the shareholders, the company could work on, he said. According to him, stop factory – a sovereign decision of the owners of Roshen. “The work there was carried, and the President made statements regarding this,” – said Peskov. According to him, the enterprise could work, reports TASS.

In October 2016 at the Valdai club Russian President Vladimir Putin described the situation at the plant in Lipetsk: there are some problems associated with the payment of VAT, but in General the factory works successfully. According to him, Russia is trying to respect the right of ownership, this applies to Poroshenko-owned factories in the Lipetsk region.

Cossacks another reason to call – in Lipetsk, the company has lost the entire volume of export to the CIS countries. However, there was a Russian market – a much more extensive and serious than any CIS market. The failure of sales on the Russian market can be explained by unwillingness of owners to sell merchandise and incorrect pricing and marketing policies.

Earlier Cossacks also noted that the drop in sales contributes to the rejection of trade mark Roshen certain categories of buyers. But the majority of buyers in Russia and do not know what candy and waffles belong to what plant. Assortment Roshen also has products under more than 100 different names.

The decrease in the level of purchasing power in Russia is the only economically sound reason for the reduction in production volumes at the Lipetsk factory, which he called Ukrainian Corporation. Although in comparison with the decline in consumer demand in Ukraine, in Russia the situation is, of course, in better times. In any case, this reason is not enough to triple the fall release. It proves the performance of the competitors of the Corporation Roshen in the Russian market. In 2015, the confectionery market has slightly decreased, but by only 1%. And affected primarily imports, which declined sharply, not local producers. Thanks to the care of imports and the devaluation of the ruble, the Russian confectioners to feel good. In 2016, actually saw an increase in the production of confectionery products in Russia. The final withdrawal of the Russian market of Ukrainian “daughter” of the Russians hardly noticed. Their candy and chocolate enough.

Therefore, the main reason for the closure of the factory in Lipetsk is the desire and actions of the owner, including illegal.

In 2014, Poroshenko promised to sell Roshen in General, including the Lipetsk factory. He hired for this investment company Rothschild and the Ukrainian group “Investment capital Ukraine”. But said that could not find buyers. In January 2016, the Ukrainian President has transferred its interest in the Corporation in an independent “blind” trust. The Bank is the Trustee of four also has attorney to negotiate the sale of assets.

The Ukrainian Corporation say the arrest of property of the Lipetsk factory, imposed by the Investigative Committee of the Russian Federation in the framework of the criminal case made it impossible. This could really become an obstacle and scare off potential buyers. On the other hand, we are talking about the theft of money from the Russian budget. Russia’s investigative Committee found the fact of theft of the company 180 million rubles through the illegal refund of VAT. According to investigators, built in 2011 the building of the Lipetsk factory Roshen and “Metallimpress” in 2012-2013 was asked to reimburse 180 million rubles in taxes with more than 1 billion rubles spent on the construction site. But the cost of works was overestimated, claimed SK. In April 2015, the TFR has opened a criminal case upon fraud in especially large size. At the same time the property of the Lipetsk factory was arrested.

The plant’s management clearly was not trying to save production and jobs. After the owner realized that to sell the plant will not work, he decided before closing as much as possible to bring to Ukraine. Russian “daughter” Roshen increased its dividend payment for 2015 in 2,5 times – to 2,251 billion. Despite the lower revenue of the factory in 2015 to 1.5 billion rubles and the net profit to 62.7 million rubles. Just 2014-2016 Roshen Corporation has received and brought to Ukraine 72,06 million dollars of dividends from the assets in the Lipetsk region. This is the official data. And the money earned in the Russian factory Roshen invested in the development of production in Ukraine, said the company. “Given that it was earned after a serious reduction in production, we can only guess what Ukraine went through to 2013”, – says Alexei Antonov from “ALOR Broker”.

The owner of Roshen, if desired, can easily maintain profitability of business in Russia and to sell, if it cooperated with the investigation and did not appeal the decisions of the courts.

In General, for the Russian market the loss is insignificant. The only negative is the loss of jobs. “The street will be 700 people working team, receiving decent by Russian standards, wages. All of them, according to the law, will receive severance payments,” – said Kazakov. That is, after dismissal, they should receive a salary for three or four months. But initially employees were about 2 thousand, layoffs are coming for the fourth year.

However, they have the opportunity to return to their jobs once the plant will have a new owner interested in the profitability, not the last withdrawal of money.

Most likely, the Lipetsk factory will remain idle until a final decision is made by the court. The property seized, therefore, the resale to that decision impossible, even if the company goes bankrupt.

“The situation is likely to develop in the following scenario. The court will make a decision on which is imposed the obligation to repay the debt formed as a result of the alleged VAT fraud, and to pay a fine. Since the factory is idle and not profitable, it will make a decision about bankruptcy and in receivership assets, including production capacity, will be realized through auctions and will find a new owner,” – says the newspaper VIEW Executive Director of Consulting Heads Nikita Kulikov.

That is what counts the Governor of the Lipetsk region Oleg Korolev. He assured that in the event of a sale of the asset confectionery factory in Lipetsk region can be restarted with the new investors. “Of course (possible restart). Factory is alive. If it comes down to how far we must go – before the sale, the new investors will launch within two minutes,” said the Governor, reports RNS.

According to him, potential investors, both Russian and not Russian, are interested in the asset. “So, as soon as Poroshenko finally decides to sell, all goes well. Will survive,” concluded Korolev. According to the Governor, the Ukrainian Corporation really do not sell the plant.

Financial analyst group of companies “Finam” Timur Nigmatullin estimates that the asset subject to different political risks can be auctioned for 0.5–1.5 billion rubles. According to him, if the asset is sold at the current market price within the designated range, the depreciation in roubles will be about 1-3 billion compared with pre-crisis times.

Those wishing to purchase production capacity for the Lipetsk plant will be found quickly, according to experts. “With the withdrawal of legal problems the new owner will be found quickly, since we are talking about the modern production with high export potential,” – said Kulikov.

From the number of potential buyers is called Fabrika “Slavyanka”, which last year expressed his desire to clean up the asset. “This acquisition would help the company to partially increase their own market share and, therefore, return not only the current 700 jobs, but all those who have lost their jobs before the start of the Russian-Ukrainian conflict,” said Alexei Antonov from “ALOR Broker”.

To start production, most likely, will not require significant investments, because the equipment the company does not have high wear, and the workers who worked with him, in fact can simply go back to the same jobs, he adds.

“Provided that the factory will be mothballed properly, and discovered in 2016 the problems with industrial safety in production are resolved, the factory may start to generate profits in a short time and with minimal investment, because the upgrade of production facilities and equipment modernization requires”, – said Kulikov.

But there is a risk that the new owner will still have to spend for the restoration of the equipment that is idle from 2013-2015. The more downtime, the more you need to invest in its improvement. Another risk is that the equipment from the factory can be exported to Ukraine.

source

Related posts:
Bloomberg explained why the US hid the amount of debt to Saudi Arabia
The Ministry promised that bills will not rise in price, perhaps even cheaper
Lukashenka announced a new phase of oil and gas war of Russia and Belarus
"Grain symbiosis" Russia and Turkey are close to rupture

Recommended

More Stories From Economy