The Russian language newspaper Kommersant reports that McCain Foods recently started with the construction of its first potato processing plant in the Russian Federation.
The facility is reportedly being constructed in the Tula Oblast region. Tula is the largest city in the Oblast and located 193 kilometers (120 mi) south of Moscow in European Russia.
According to the report by Kommersant, McCain Foods Holland and McCain Europe established McCain Foods Rus LLC in Uzlovaya in the Tula Region in June. A Kommersant source in the market confirmed that McCain is working on a project building a plant for the production of French fries, which is reportedly being built in the Uzlovaya Industrial Zone in Tula Oblast.
According to the Kommersant article, some of the conditions agreed upon by stakeholders involved in the project, are zero import duties and no VAT payments until 2065, and for the first ten years, the income tax rate will be 2%. McCain’s European office did not provide Kommersant with a comment on this.
According to forecasts by Euromonitor International, sales of packaged processed potatoes in the Russian retail market in 2020 will grow by 9.8%, to $46 million. McCain is the largest player with a share of 20.6%. According to customs data, Russia imported more than 90 thousand tons of processed potatoes in 2019. McDonald’s said it “welcomed the emergence of new industries and the expansion of existing ones.” Burger King did not answer Kommersant’s questions; and KFC declined to comment.
According to the Institute for Agricultural Market Studies, 19.8 million tons of potatoes were harvested in the Russian Federation in 2019. The executive director of Rusbrand, Alexei Popovichev told Kommersant that localization will help McCain save on logistics, which is rather expensive in the case of frozen products. But there may be issues with obtaining raw material of the required quality, he noted.