South Korean food producers are expanding their presence in Russia, despite the imposition of Western sanctions and the withdrawal of some foreign companies from the country, writing Japanese newspaper Asia Nikkei. The main beneficiaries are South Korean producers Choco Pie and Doshirak.
Sales of South Korean food manufacturer Orion (owner of the Choco Pie brand) in the first quarter of this year in Russia jumped 59.1% (to $36.1 million) compared to the same period in 2022, reports Asia Nikkei. In June 2022, new production was launched at the Orion plant in the Tver region, the construction of which began in 2020, the publication says.
Paldo, another food maker best known for its Doshirak instant noodles, expanded with the purchase of the Russian branch of Spanish food company GBfoods in October. Net profit for Paldo’s Russian division, Doshirak Rus, for 2022 rose 170.2%, while revenue rose 70.3%, Asia Nikkei notes.
The South Korean company Lotte also saw its revenue increase – in Russia, like Orion, it produces Choco Pie (only under its own brand), sells other sweets and drinks. The food division of the conglomerate Lotte Group recorded a 58.1% increase in sales in Russia in the first three months of the year compared to the same period last year. In 2022, revenue jumped 53.4% year-on-year, writes Asia Nikkei.
Although Seoul has also signed on to Western sanctions, the restrictions have only hit certain areas, such as semiconductors. But the sanctions do not discourage the ability of South Korean exporters in areas related to food exports. In April, the South Korean government banned the import of 741 items into Russia, including semiconductors, cars and their parts, after which the number of banned goods increased from 57 to 798, writing RBC. To export such goods to Russia and Belarus, it is now necessary to obtain special permission from the government.
Russian consumers have been most affected by Samsung’s decision to suspend smartphone shipments to Russia, announced by the company in March 2022. Additionally, the company has donated over $6 million to support refugees. Ukrainians, writes Asia Nikkei.
Businesses staying in Russia are advised to avoid financial pitfalls. In April, the Korea Trade and Investment Promotion Agency (KOTRA) urged South Korean companies to be careful when conducting financial transactions, as many Russian banks are under US and EU sanctions. , reported Asia Nikkei.
Despite the sanctions imposed on Russia, Seoul does not support Ukraine with weapons. In an interview with Russian media in April 2023, Russian Deputy Foreign Minister Andrei Rudenko noted that the Russian side confirms its commitment “to work together to preserve the potential for bilateral cooperation and further strengthen relations with the Russian Republic. of Korea as far as Seoul is ready”. for this.” At the same time, the sanctions imposed by Seoul will negatively affect the entire bilateral relationship, including cooperation in the field of Korean settlement, Deputy Minister Andrei Rudenko told Russian media.
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