(MENAFN- Al-Anbaa) As U.S. and European sanctions piled pressure on Russia earlier this year, the Kremlin hit back with an unusual weapon: apples.
From Aug. 7 Russia banned imports of fruit from various countries that supported sanctions, including Poland, which has been a strong critic of Russia's actions in Ukraine. The ban had real impact: Poland is the world's biggest exporter of apples and last year sent more than $380 million worth to Russia, according to International Trade Centre figures.
While Poland's apple growers are suffering, the ban has also been an opportunity for an old friend of Russian President Vladimir Putin.
A day after Russia decreed Polish apples forbidden, Gennady Timchenko, who made a fortune from oil trading during Putin's years in power, applied to buy a large stake in one of Russia's biggest apple producers. Through his investment company Volga Group, he now owns 40 percent of Alma Holding, which has orchards in the Krasnodar region, southern Russia.
For Timchenko, 62, it is a chance both to profit from a market suddenly in need of homegrown apples and to support Russia in the face of Western sanctions. He portrays the investment as a patriotic act, a show of support for Putin, whom he has known since the 1990s, and of defiance against U.S. and European sanctions imposed on Russia over its meddling in Ukraine.
The deal also affords a chance for personal payback. In March, as part of its measures to punish Moscow over Ukraine, the U.S. Treasury put Timchenko on a list of individuals sanctioned as "members of the Russian leadership's inner circle."
Volga Group told Reuters: "Apples are the number one fruit for Russian consumers. Russia is the biggest importer of apples in the world, and less than 50 percent of demand is produced in Russia ... We see good opportunities to increase the company's business."
The investment suggests Putin's circle may be benefiting from the very sanctions that the West hoped would spur them to persuade the Kremlin to change tack over Ukraine. While external investors have taken fright as the value of oil and the ruble have plunged, allies of Putin such as Timchenko are cash-rich and willing to strengthen their hold on Russia's economy. Nikolai Shamalov, another long-standing associate of Putin, has also recently invested in agriculture.
While external investors have taken fright, allies of Putin such as Timchenko are cash-rich and willing to strengthen their hold on Russia's economy.
China, Serbia and Azerbaijan have increased exports to Russia to fill the gap caused by Putin's ban on food imports from countries supporting sanctions against Moscow. But Russian farmers and investors still see a chance to exploit one of the few buoyant industries as the country's economy falters.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.