A U.S.-owned canned food company seized by Russia to safeguard domestic food supplies is now aiming to boost its declining sales through exports to China, North Korea, and other new markets, according to documents and sources familiar with the situation.
Glavprodukt, Russia’s largest canned food producer and the only U.S.-owned firm seized by Moscow, was founded by Los Angeles-based Leonid Smirnov. The Kremlin took control of the company in October 2024, citing its strategic importance to Russia’s food security.
Despite maintaining production levels, Glavprodukt has experienced a sharp drop in sales, leading to excess inventory and the need for expanded warehouse space. Smirnov is currently contesting the seizure in court, with a hearing scheduled for July 11 at the Moscow Court of Arbitration.
New Export Strategy and Market Focus
Glavprodukt’s newly appointed, state-backed management proposed increasing exports to China and entering markets such as North Korea and the Middle East. China accounted for only about 1% of Glavprodukt’s sales last year, highlighting the ambitious nature of the pivot.
The company is also exploring opportunities in African and South Asian markets where demand for canned fish and other products may be strong. Efforts to develop e-commerce sales channels and register trademarks in China are underway.
However, logistical challenges have arisen, including delayed shipments of canned fish and condensed milk to China, underscoring the complexities of expanding export operations.
Russia’s move to leverage trade with countries like China and North Korea reflects a broader strategy to strengthen economic ties with nations outside Western sanction regimes.
This export focus contrasts with Russian President Vladimir Putin’s recent statements about welcoming American companies back, indicating internal tensions within Russia’s trade policies.
Deteriorating Financial Performance and Government Oversight
Financial filings reveal Glavprodukt has shifted from modest profitability to regular monthly losses. Russia’s Ministry of Agriculture has requested explanations for the sales decline.
Seized companies like Glavprodukt are under pressure to maintain employment and growth despite management changes. The ministry has yet to comment publicly on the situation.
Since the 2022 invasion of Ukraine, Moscow has placed numerous foreign companies under temporary management. Some, like Danish brewer Carlsberg and French yogurt maker Danone, have seen assets sold at steep discounts to Kremlin-friendly buyers.
U.S. multinationals including Procter & Gamble and PepsiCo still operate under these complex conditions. Russia routinely labels seized companies as strategic assets to justify state control.
Author’s Opinion
Russia’s strategy to expand exports of seized companies like Glavprodukt to non-Western markets underscores the complex reality of state control over foreign assets. While aiming to secure domestic supplies and bypass sanctions, these companies face logistical hurdles and shifting geopolitical tensions. This approach may offer short-term relief but risks long-term inefficiencies and market alienation, complicating Russia’s broader economic objectives.
Featured image credit: Rollz International via Pexels
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