New Brunswick

McCain Foods scraps plans for Russian plant

McCain Foods has scrapped its plan to open a potato processing plant in Russia following the country's invasion of Ukraine.

Company had planned to spend $211 million Cdn on plant south of Moscow

McCain Foods says it has abandoned its plan to build a new potato-processing plant in Russia. (Government of New Brunswick)

McCain Foods has scrapped its plan to open a potato processing plant in Russia following the country's invasion of Ukraine. 

The company founded in New Brunswick announced the change in plans in a statement issued Thursday morning after previously saying it had halted construction as of Feb. 24.

"We have now made the decision to discontinue the project entirely,"  Charlie Angelakos, McCain's vice-president of global external affairs and sustainability, said in an emailed statement. 

"In addition, we are also suspending all shipments of our products into the Russian market."

McCain, founded in 1957 in Florenceville in western New Brunswick, says it now has 49 production operations on six continents. 

The company announced its plans for the processing plant in Tula, a city about 180 kilometres south of Moscow, in April 2021. 

At the time, McCain said it expected to spend 150 million euros, or about $211 million Cdn, to build the plant that would employ about 200 people. This week, the company said the plant was still in the "early stages of construction."

The company said when it announced the plant that after 20 years of importing frozen products from its European plants to sell in Russia and surrounding nations, it had decided to localize production of the supply of french fries and other products. 

An e-book about the history of McCain says that as of 2007, the company was supplying McDonald's locations in Russia through a plant in Poland.

The company's decision to discontinue construction follows a wave of corporations reconsidering their operations in Russia following its invasion of Ukraine, including McDonald's. The fast food giant said it would temporarily close hundreds of locations in Russia.

Canada, the United States, European Union and other countries have imposed a series of sanctions on Russia. 

The company didn't answer a question about whether those sanctions, which affect some Russian financial institutions, influenced its decision.

'Quick decision'

"It was a quick decision," Sylvain Charlebois, director at the Agri-Food Analytics Lab at Dalhousie University in Halifax, said in an interview Thursday.

It's one consistent with other companies in recent days, Charlebois said.

"You're seeing many, many agri-food companies deciding to cease operations in Russia due to the invasion. I think they basically looked at reputational risks, and of course, geopolitical risks and came to the conclusion that Russia is not a good place to invest at this time."

As the war enters its third week, Western officials said Russian forces have made little progress on the ground in recent days but have intensified the bombardment of cities such as Mariupol where an airstrike on a maternity hospital killed three people Wednesday.

As efforts to reach a broad ceasefire failed, emergency workers renewed efforts to get vital food and medical supplies into besieged Ukrainian cities and to get traumatized residents out.

"The Russian invasion of Ukraine has been deeply concerning to all of us at McCain Foods," Angelakos said in the statement about the plant.

"Our thoughts continue to be with those affected by this crisis, and we have done everything in our power to put the health and safety of our employees at the centre of our response."

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