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Roshen candy factory in Russia suspends work due to decline in demand

September 08, 2014, 20:17 UTC+3 LIPETSK
The Roshen confectionery conglomerate that belongs to Ukraine’s President Petro Poroshenko bought the Russian Lipetsk factory called then Likonf
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© ITAR-TASS

LIPETSK, September 08./ITAR-TASS/. Roshen confectionery in central Russian city of Lipetsk will suspend its operation on September 15 through the end of month, the factory’s deputy director general told ITAR-TASS on Monday.

Oleg Kazakov said that the factory was forced to take this austerity measure because of large amounts of the goods accumulated in warehouses.

“Both customers and retailers are refusing to buy our products made in Lipetsk,” he said.

Production lines are expected to start operating on September 29 or on October 1. The employees are to get two thirds of their wages or to take their annual leaves.

The Roshen confectionery conglomerate that belongs to Ukraine’s President Petro Poroshenko bought the Russian Lipetsk factory called then Likonf (founded in 1966) in 2001.

In 2013 the receipts of that plant that has two production sites in the region amounted to 2.16 billion roubles ($ 58 million), with net yield climbing to 177.9 million roubles ($ 4.79 million).

Roshen Confectionery Corporation is Ukraine's market leader and a world industry major. It unites factories in the Ukrainian cities of Kiev, Vinnytsia, Mariupol and Kremenchuk, the Klaipeda confectionery plant in Lithuania, Hungarian facility Bonbonetti Choco Kft, Lipetsk Confectionery Company's two Russian production sites and Ukraine's Bershadmoloko butter-milk plant.

The corporation produces around 200 types of confectionery, generating annual production of up to 450,000 tonnes.

The conglomerate sells its production in Ukraine, Russia, Kazakhstan, Belarus, Moldova, countries of the Caucasus and Central Asia as well as in Germany, the United States, Israel and Lithuania.

In late July 2013 the Russian food safety agency Rospotrebnadzor imposed a ban on imports of Roshen products from the Ukrainian plants because of their low quality and safety, including the hazardous and cancer-causing organic compound called benzopyrene that was supposedly found in candies. The Russian plants did not fall under the ban then.

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© RUPTLY/TASS TV
Later the two countries continued talks on resuming import of the Ukrainian sweets to Russian market.

Ukraine has suspended negotiations on the issue amid worsening political relations between Russia and Ukraine, Rospotrebnadzor says.

In late August reports said that the Roshen confectionery corporation topped the list of Poroshenko’s assets that he had promised to sell after becoming president.

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