Danish companies halt operations in Russia as rouble plummets

Expectations for 2015 are less than rosy

The worst financial downturn in Russia since 1998 – which has caused the rouble to tumble by 16 percent this week – has led to a number of Danish companies ceasing operations and withdrawing capital from the beleaguered nation in the face of tremendous losses.

In particular, the Danish agriculture and food product sector, which is already struggling due to the Russian import embargo, is on the back foot, including the slaughterhouse giant Danish Crown, which has given up on Russia altogether next year.

”We are in a situation in which we are planning without Russia,” Jens Hansen, the head of communications at Danish Crown, told Børsen business newspaper.

”With the situation as it is, it would be a huge bonus if an opening comes up in Russia, but we are in a situation where we have to act based on the opposite happening. We'll keep our Russian offices, however, and the changes haven't led to job losses. But we are planning 2015 without Russia.”

READ MORE: Lobby: 1,000 farms and 4,500 jobs at risk from Russian boycott

Rockwool rocked
Insulation goods producer Rockwool is also racing to act as the rouble plummets. It is trying to transfer capital out of Russia in anticipation of a total collapse of the currency that would result in the closure of financial borders.

Jens Krogsgaard, the deputy head of finance and taxes at Rockwool, argued that Russia (Rockwool's fourth-largest market) could potentially introduce some form of currency restriction in order to protect the rouble from further depreciation.

”We are withdrawing money from Russia, but we aren't exchanging the roubles for euros at the moment, as prices remain far too volatile,” Krogsgaard told Børsen.

”It will be scary next year. This year it will only affect a small portion of the turnover, but if the rouble remains at its current level for the whole of next year, our business in Russia will barely bring in half as much compared to where the rouble was at the start of 2014.”

Nordea, Pandora and Carlsberg have also been affected by the Russian financial crisis as the three C20-Index firms are highly involved in the Russian market.

Nordea fell by 2.2 percent in yesterday's trading, corresponding to a loss in value of almost 9 billion kroner, while Pandora fell by 5 percent, a loss of 3.3 billion kroner.