The New Zealand based company announced on March 21 it was ending exports, primarily butter, and would end its joint venture with Unifoods in Russia.
The co-operative suspended shipments of product to Russia at the end of February.
Fonterra chief executive officer Miles Hurrell said its first step following Russia’s invasion of Ukraine was to establish the safety of the team in Russia, and its priority through this process was to do the right thing by the processor’s people.
“We then suspended shipment of product to Russia while we assessed the impact of economic sanctions and discussed our long-term plans with our customers and joint venture partner,” Mr Hurrell said.
“Following careful consideration of the impact on our people and our long-term plans for the Russian market, we will now close our office in Moscow, re-deploying seven staff where possible, and withdraw from our joint venture Unifood.”
Fonterra exports a small amount of product to Russia, primarily butter, totalling about one per cent of its annual exports.
“Given the current strong demand for New Zealand dairy, we are confident in our ability to re-allocate this product to other markets,” Mr Hurrell said.
New Zealand has been exporting butter to Russia for more than 40 years. Fonterra entered the joint venture Unifood in December 2018 with a factory in St Petersburg processing butter and cheese.
The development was kept low key at the time, possibly because of international sensitivity over the Russian occupation of Crimea..
The decision to walk away from Russia follows calls from many, including New Zealand’s Federated Farmers, to do so.
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