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Opportunities remain in Russia for Irish companies despite €100m hit to food exports

October 8, 2014

Opportunities remain in Russia for Irish companies despite €100m hit to food exports

Irish food companies have been hit hard by Russian sanctions against Europe, but also by the pork ban introduced at the start of this year, costing Ireland in total an estimated €100m in food related exports in 2014.

This was one of the messages to come out of a business breakfast briefing held by the Ireland Russia Business Association (IRBA) recently.

Speakers included Gerard MacCarthy, director, Enterprise Ireland Russia/CIS and head of the commercial department at the Embassy of Ireland in Moscow and IRBA chair Dr Constantin Gurdgiev.

“From a trade point of view, the rouble euro-exchange rate, the so-called ‘Presidential Ban’ targeted at the food sector as a response to EU sanctions against Russia, and a volatile and unpredictable political and legislative environment are key current risk factors in dealing with the Russian market,” said MacCarthy.

However, the seminar heard opportunities still remain, particularly in genetics, ingredients, and food technology/agricultural consultancy, and it is hoped that the current ban will be lifted in the short term.

Despite a volatile and unpredictable multilateral political landscape in the Russia/CIS region, Irish non-food companies have shown agility and resilience in engaging with what is the third biggest non-EU exports market for Irish companies after the US and China.

Irish exports to Russia amount to around €635m a year. The latest available figures from the Central Statistics Office (CSO) show an increase of 28pc from January to July in comparison with the same period in 2013, with July alone showing a 121pc increase.

The growth has been consistent over time. Enterprise Ireland client exports to Russia – which account for over 45pc of the CSO figures – have increased 87pc between 2008 and 2013.

“The opportunity space for Irish exporters in Russia remains wide open in areas not impacted by sanctions. And new opportunities should open up in areas relating to agricultural production, food processing, storage and transportation,” said Gurdgiev.

“In addition, there is renewed scope for investment in Russia in the above areas and in areas relating to technological innovation and modernisation in a wide range of sectors.”

“While over the next one to two years we can expect more uncertainty and risks to materialise, including the risk of significant further devaluation of the rouble. Taking a longer term horizon of five to 10 years, these factors are likely to be replaced by more positive growth momentum and improved returns on foreign investment.”

The IRBA started in 2010 as a subsidiary of the Irish Exporters Association.

http://businessandleadership.com/exporting/item/47896-opportunities-remain-in/

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