RUSSIA: PepsiCo, Coca-Cola Hellenic to shut down one Russian plant each | Progresiv
PepsiCo Inc. and Coca-Cola Hellenic Bottling Co. AG are closing one plant each in Russia, citing a plunge in the value of the Russian ruble and an unfavorable economic situation. 
The two are the latest food and drink companies to cut production in Russia as the country slides into recession. In January, Danish brewer Carlsberg A/S said it would be closing two plants in Russia, and Danone Russia said it would consider closing some of its dairy plants should the economic situation worsen.
PepsiCo said it would close its Ramenskoe juice facility near Moscow in June. Some assembly lines will be transferred to its Lebedyansky plant, southeast of Moscow.
Pepsi became a leading juice player in Russia in 2009, acquiring OAO Lebedyansky for about $2 billion. In 2011 it shelled out roughly $5.2 billion to buy OAO Wimm-Bill-Dann, a Russian dairy products and fruit-juice maker. PepsiCo had a 40% share of the country’s juice market last year by volume, according to Euromonitor International
Russia is PepsiCo’s second biggest market by revenue after the U.S., contributing about 7% of overall revenue. But last month PepsiCo said its Russian revenue fell 10% to $4.41 billion in 2014, hurt by the weaker ruble and a mid-single-digit percentage decline in beverage volumes. Snack volume also declined slightly.
Coca-Cola Hellenic , which bottles and sells goods under the Coca-Cola brand and is part-owned by Coca-Cola Co. , said that it was shutting down its plant in Nizhny Novgorod, east of Moscow. Work will be transferred to more modern plants in Samara, Oryol, Moscow and Istra, a spokeswoman said. The plant in Nizhny Novgorod, which produced soft drinks and iced tea, will still function as a distribution and logistics center. Coca-Cola Hellenic, formerly of Greece, moved its headquarters to Zug, Switzerland, in 2012.
Coca-Cola booked a $36 million loss tied to its Russian juice operations last year. Its overall beverage volumes at its Russia, Ukraine and Belarus business unit slipped 1% in 2014 after growing 3% in 2013.
PepsiCo and Coca-Cola workers in Russia 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. (www.wsj.com)
