Many Maritime businesses pivoting, halting business relations with Russia as new sanctions take effect

The war in Ukraine is forcing some Maritime businesses to pivot or potentially halt production in Russia.

McCain Foods paused construction of a more than $200 million plant in a region south of Moscow that was meant to localize the production of french fries and other potato appetizers in Russia that have long been imported from Europe.  

“As a result of the invasion last Thursday, we stopped all construction at our Russian production facility in the Tula Oblast region on Feb. 24 and are reevaluating the future of the project,” said Charlie Angelakos, the vice president, global external affairs and sustainability at McCain Food.

“A final decision will be taken in the coming days."

Angelakos said the company is carefully watching the situation in Ukraine and is donating $200,000 to the Red Cross Ukraine relief efforts.

The Cape Breton-based Glenora Distillery is also facing business challenges.

Until last week, it had been selling whisky in both Ukraine and Russia. The company decided to stop business with Russia after it invaded Ukraine.

A day later, Russia’s major banks were blocked from SWIFT -- a system the Glenora Distillery relied on for its transactions.

“We feel bad for our friends that we made over there in both countries,” Lauchie MacLean said.

“We’ll try to keep our relationships up. But in regards to actual sales, we don’t know what the logistics will show coming down the pipe,” he said. 

Canadian waters are also now closed to Russian vessels, but the Halifax Port Authority doesn’t anticipate a huge impact on trade because there are no direct shipping routes from Halifax to Russia.

“We don’t have direct routes with Russia and in fact, the bulk of our trade is with Southeast Asia, South Asia, the UK, the EU and the Caribbean,” said Lane Farguson, a spokesperson with the Port of Halifax. 

According to Nova Scotia Business Inc., Nova Scotia exports to Russia and Ukraine combined are 0.26 per cent of the international merchandise exports in 2021.

That included about $10 million worth of Coldwater prawns and shrimp sent to Ukraine, and approximately $500,000 of fruits and edible nuts.

Its imports were about 0.84 per cent of its international trade. That included $2 million of Kraftliner Paper in rolls and sheets.

As for McCain’s next move, Sylvain Charlebois, with Dalhousie University, believes it will come down to what its customers do – especially McDonalds.

“I think it’s going to be up to McDonalds to decide, and if McDonalds decides to close for a while, there’s going be no point for McCain to continue to operate,” Charlebois said.