As the world continues to watch the unfolding war in Ukraine, many companies wonder about the impact it will cause on their businesses. We have seen how many have decided to leave Russia, as part of the economic sanctions that global leaders are imposing on the country, hoping it will contribute to cease the war efforts. Others like Orbia, Kidzania and Nemak continue to operate in Russia, awaiting to see how things unfold. At the time, they have not reported serious problems, but as more countries continue to sanction the Russian economy, they will likely experience a slow down in their operations.
In Ukraine, some Mexican companies have been forced to close their facilities as the tensions continue to increase. Such is the case of Grupo Bimbo and Gruma. There are definitely concerns regarding the impact this will have on their revenue. However, in both cases, the impact of a temporary closure on the Ukraine facilities do not seem to be concerning. Grupo Bimbo operates in 33 countries and has more than 200 facilities around the world. With just 1 facility in Ukraine, that represents 0,48% of their production facilities, it’s not likely to affect their sales revenue. Gruma, with more than 70 facilities around the world, and just 1 in Ukraine, is not likely to experience a high impact either. For now, it is too early to tell what the real effect of this conflict will be. But it is safe to assume that these Mexican companies will rely on their global production facilities to counteract the effects of this war.
Other affected companies are Coca-Cola bottlers, Nestlé and McDonald’s. These three companies have also announced their temporary closure of Ukrainian production facilities. But what seems to be more concerning for them is the fact that they have a very significant consumer market in Russia. So if the conflict continues, it will not only force them to close facilities, but their revenue will be significantly impacted.
These next few days will be crucial. As things unfold, we will have a better understanding of the real consequences of this conflict, and we’ll see how all these companies react and adapt to their new reality.
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