The biggest Russian glass factory AO “Kavminsteklo” has halted glass bottle deliveries to the Republic of Crimea in order to fulfill US sanctions. This may force Crimean wine producers to halt their work for a period from 2 to 6 months because another large glass bottle producer – “Rusjam” – has no capabilities to secure deliveries for all Crimean wine producers.
Aleksandrs Pavlovs, a recently appointed top manager, of “Kavminsteklo” is from the Baltics (Latvia). He’s well known for his anti-Russian sentiments. Pavlovs, who has spent most of its carrier in the fast-moving consumer goods (FMCG) sphere, got his new appointment in early April. Previously, he worked in Minsk, Belarus as a country manager of Danone Russia.
Almost immediately, Pavlovs told AO “Kavminsteklo” employees that the company is freezing any cooperation with Crimean businesses in the framework of the imposed “US sanctions”. He also told his new workers to keep the reason of this decision in secret because it may cause a negative reaction from the Russian government.
However, far from all Pavlovs’ new employees appeared to be persons without principles. Some of them leaked details of this situation to the media. Despite this, the bottle deliveries to Crimea were stopped. No Russian authorities or officials have reacted to this situation so far.
It should be noted that a tourist season is starting in Crimea soon. The tourism makes a notable part of the republic’s annual budget.
The risk posed by the decision of “Kavminsteklo” to halt bottle deliveries to Crimea was addressed by the head of the association of winegrowers and wine-makers “Sevastopol” in a letter to a member of Russia’s Parliament (Duma), Dmitry Belik. This very letter states that “Kavminsteklo” and “Rusjam” are de-facto monopolists in Crimea and described the situation as “critical”. However, issues related to bottle deliveries have appeared just recently.
Russia’s news website RBC conducted a brief research into the situation with “Kavminsteklo”. According to the RBC data, until 2015, “Kavminsteklo” was a part of the international concern “Saint-Gobain”. In 2015, the concern’s business section “Verallia”, which includes “Kavminsteklo”, was sold to the consortium of the US fund “Apollo Global Management” and the French state investment bank “BPI Finance”. At that moment, “Verallia” was the third biggest glass package producer around the world. The California Public Employees’ Retirement System (CalPERS) is among strategic investors of “Apollo Global Management”.
One of the biggest Russian glass container producers, which has roots from the Soviet times, is controlled by the Western capital. Nonetheless, “Kavminsteklo” legally is a Russian company that makes billions by exploiting Russian soil and is patronized by officials of various levels. The very same company immediately halted deliveries to its core clients by a decision of the newly-appointed top manager. No formal reasons were publicly provided. De-facto the decision was made by a political-motivated request of the third party.
In any another large country around the world – the US, EU states, China or India – this would not be possible. However, all seems to be possible in Russia.
Similar approaches were used against Russian strategic enterprises, especially defense enterprises, in the 1990s. Such enterprises were gained via an illegal takeover or bought for a mere song by investors affiliated with Western sponsors. Then, they were intentionally led to a bankruptcy or stopped deliveries to internal Russian clients using various justifications. These approaches allowed to eliminate a notable part of the post-Soviet industrial potential. It seems that concerned parties have decided to repeat this successful case of combating Russia.
Today is April 25. The problem with bottle deliveries has been delivering for a third week in a row. Russian authorities have undertaken no measures against the legal entity or its top manager.
In a much more debatable situation, US authorities pushed for a detention of Meng Wanzhou, Huawei’s chief financial officer and deputy chair. The Huawei top manager was arrested in Canada’s Vancouver on December 1 under the US request. She remains detained. Multiple Russian citizens also remain detained in the US under various pretexts. If one takes into account the US behavior, Russian authorities must detain Pavlovs immediately over his deliberate attempt to damage Russia’s state interests.