• Food and drinks

 

It is no surprise that the global economic meltdown has also put a strain on the Russian economy. With oil prices down at only 58 USD per barrel in May and tightening credit conditions in the domestic banking sector, the growth rates according to the estimates of the World Bank are likely to reduce by 7.9 percent in 2009.

Denmark’s exports to Russia, including main export categories such as pharmaceutical and agricultural products, and machinery and equipment, have not been immune to the economic slowdown. While the export growth for 2007-2008 increased by six percent, the first five months of 2009 registered a decline in the export volume of 38 percent. With the Rouble having lost more than 25 percent of its value since September 2008, some sectors are experiencing gradual substitution towards domestic goods as a result of high import prices.

However, not all economic changes are bad news for Danish exporters.  The focus on lifting domestic production, especially within the food and drink sector, is creating new windows of opportunity. To support the development of the domestic production, the Russian government has revised the list of equipment, which can be imported to Russia VAT-free, while foreign investors, such as Unilever and The Coca-Cola Company are reported to continue with both acquisition and expansion in 2009.

At the DI Moscow office, we expect that there are benefits to be reaped for Danish sub-suppliers of high-quality machinery and equipment for the Russian processing industries, but also producers of specialized ingredients in food processing. If you want to hear more about how your company can establish, expand, and upgrade earnings on the Russian market, please do not hesitate to contact us.