French dairy Lactalis reopens Ukraine factory but war continues to impact operations 

UKRAINE – World’s largest dairy company Lactalis has resumed output at a factory in Ukraine where production had been halted amid nearby fighting. 

A spokesperson for the French group said its facility in Nikolaev in the south of the country “was able to resume operations but at a slower pace”. 

The two other factories – in Shostka in northern Ukraine and in Pavlograd in the east – had remained open but with limited production. 

“Activity at our sites in Shostka and Pavlograd has slowed down, these sites only receiving one to three truckloads of milk per day,” Lactalis said. 

“We were able to make a few shipments of products to the most spared cities in order to limit the shortage of food for the populations.”  

The company has committed to keeping operations running to ensure Ukrainians have a steady supply of food.

Lactalis markets butter, milk, cheese and yogurt in Ukraine, with its business in the country generating around EUR100m (US$112.1m) in sales.  

Its plants in Ukraine also export to markets including Georgia and Moldova. 

Lactalis which uses Ukraine as a production field for its export markets in Georgia and Moldova has however expressed concerns that the current conflict could hit supplies to its factories. 

“Certain shortages – for example, soda dedicated to industrial cleaning – are to be feared and could compromise the maintenance of site activity,” it said. 

“The teams are thinking about the best solutions to maintain production for as long as possible.”  

Food operations paralyzed 

As Lactalis struggles to maintain operations in the war-torn country, other multinational food companies are shutting down for security reasons. 

Danish brewing giant Carlsberg, Nestle, Mondelez International, a Coca-Cola bottling company, and Japan Tobacco have all shut down operations.  

A Carlsberg spokesperson was quoted saying the company has taken “several initiatives in Ukraine with the aim of taking care of the safety of our employees in the country,” those initiatives reportedly include keeping employees at home. 

A Nestle spokesperson told CNN that the company has temporarily closed its production and supply chain facilities in Ukraine and has advised workers to stay home. 

Russia’s invasion triggered Europe’s worst security crisis in decades and handed businesses just recovering from the pandemic a fresh set of challenges.  

Soaring costs of food prices are certainly expected to drive up costs for corporations and consumers alike. 

The West’s vow to impose tougher sanctions on Russia complicates the outlook for companies like Danone and Cargill that operate in the region or rely on the crops and raw materials produced there. 

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