PepsiCo and Coca Cola to Close Production Facilities in Russia

A number of companies are now considering closig their production plants in Russia on account of the devaluation of the Russian ruble and the unfavorable economic conditions.

Among them are PepsiCo Inc. and Coca-Cola Hellenic Bottling Co. AG as reported by the Wall Street Journal.

The two bevarage producers are to follow the example of the Danish brewer Carlsberg and Danone Russia after they made announcements of their intentions in january of this year.

PepsiCo stated Monday that it is planning on closing its Ramenskoe juice facility and transferring some of its capacities to the Lebedyansky plant, located to the southeast of Moscow. The reason was the 10% decrease in revenues reported last month.

"Because our categories are in juice and dairy, stuff that the Russian consumer really needs, the businesses have been quite resilient,'' PepsiCo CEO Indra Nooyi said.

She added that it was necessary for the Russian facilities to ''tighten the belt'' because of the significant inflation causing increase in some of the import supply prices for the company.

Additionally, around 400 out of the 23,000 employees in Russia will be fired. All of them will receive severance packages or will have the opportunity to transfer to other sites in the country.