Finnish dairy giant Valio has completed negotiations around its Russian divestment and will sell its operations in the country to Russian food producer Velkom Group. The transfer will commence immediately.
With the completed transaction, Valio’s operations in Russia have now ended.
The sale includes Valio’s Russian operations and the processed cheese factory in Ershovo. The Viola brand of processed cheese sold and produced in Russia is also part of the deal, which means that the new owner has the option to continue producing and selling Viola processed cheeses in Russia.
The Valio brand will still be seen on store shelves in Russia until the packaging materials have been depleted and product expiration dates have been reached.
Product brand rights to the Valio Viola fresh cheeses sold in Finland and produced by Valio in Finland are not included in the transaction. The buyer must stop using the brands sold in Russia that are not included in the transaction by the end of the year within the framework of the transition period.
“Russia’s attack on Ukraine made it impossible to continue our operations in Russia, both ethically and from a business perspective. Exiting from Russia has proved difficult in this situation because of the constantly changing legislation and the reciprocal sanctions. We have sought out solutions and a suitable buyer throughout spring. With the transaction, we will complete this process and our operations in Russia will end,” says Valio CEO Annikka Hurme.
In 2020, Valio’s net sales in Russia were €87m and accounted for approximately 5% of Valio’s global net sales of about €1.8bn. The company decided on 7 March 2022 to withdraw from operations in Russia.
Valio exports products to some 60 countries around the world. The total value of its international operations and exports is about €750m annually, i.e. about 40% of Valio’s total net sales.