Kalev's exports to Russia disrupted

Some retail chains in Russia have announced that they will stop selling the
Kalev Chocolate Factory's products in their stores, but no jobs are
jeopardized. 
Russia accounts for a couple percentages of the total sales of the company
and less than a third of all exports. In 2007, around 70 tons of products
were shipped to Russia, mostly sugar- and chocolate confectionary products.
Ms Kati Kusmin, Chairman of the Management Board of AS Kalev Chocolate
Factory said that Kalev has made strategically sound decisions to focus on
the Baltic markets. "The Russian crisis of 1998 taught us first
and foremost that Estonian food producers should not take on significant
risks in that market and this strategy has proven to be right in the light
of current developments. We are talking about loss of potential sales, but
we are putting our hopes on our loyal consumers in the Baltic and in
Finland," said Kusmin. According to her, the disruption of sales to Russia
will not significantly hamper the economic performance of Kalev. "The topic
is hot, emotions high and therefore the massive headlines. Incidentally it's
important to highlight that not a single job at Kalev is jeopardized due to the
developments," said Kusmin.
According to AS Kalev Chocolate Factory's manager of the export sales group
Ms Mai Nuudi the share of Russian sales in the overall turnover of the
company is small, but still it counts as an important export market. "We
have thus far considered the Russian market as fast developing, with major
opportunities and threats, where we could sell out our spare producing
capacity. Due to the price level of competing products and the customs
duties, Russia is not a very attractive market in terms of making a profit,
but it could be in the future. To forge a road into the market, it is
important to establish a presence already today and to grow along with the
retail sector there."
The consolidated group of AS Kalev recorded a turnover of over EUR 56
million in the financial year 2005/2006, the company employs 790 people.

Aire Mill
Tel 6077853
Aire.Mill@kalev.eu