AAK announced its plan to make a ‘controlled exit’ from its operations and investments in Russia. In March, AAK temporarily froze deliveries to, and sales in, Russia. The decision was now reached to permanently close the business in the country. In this process, AAK will ensure both legal compliance and the safety of its employees. Russia makes up for around 3% of AAK’s volumes, as measured in metric tons.
As it exists Russia, AAK leaves a local joint venture in which it holds a 75% stake. It intends to return its share to the original owner.
The joint venture makes up for approximately half of AAK’s volumes in the country ( measured in metric tons) – most of which are reported in Food Ingredients. The remaining half are imported to and sold via AAK’s Russian sales company, which will be closed. Most of these volumes are are in the segment of Chocolate & Confectionery Fats. “AAK is now working diligently to re-route as much as possible of this to customers in other geographies,” the company announced in a statement.
AAK estimates the exit to lead to a cost of SEK 300–350 million, affecting the income statement in the second quarter. Given an expected gradual transfer of volumes, AAK estimates that the total impact on operating profit will be in the range of SEK 75–100 million in 2022.