FT: the new Chechen bosses of Russian Danone are distinguished by their professionalism
“New Chechen bosses” of “Danone Russia” (the Russian “daughter” of the French Danone) conduct business “as MBA, quite professionally and without drawing a weapon.” This is how the British newspaper Financial Times (FT) described the work of the company under Ramzan Kadyrov’s nephew Yakub Zakriev.
According to the publication, a relative of the head of the Chechen Republic mainly manages the company’s factories only nominally; the former management is still involved in most of the activities of the dairy products manufacturer.
It is clarified that the duties of the company’s general director continue to be unofficially performed by Charlie Cappetti, who has held this post since 2017. He and the company’s other senior managers maintain regular contact with Danone’s head office in Paris to ensure the smooth running of the businesses.
According to FT, Zakriev appeared several times at the office of the Russian subsidiary. He introduced ex-Deputy Minister of Agriculture of Chechnya Ruslan Alisultanov and businessmen from Kazan – Yakov Khachanyan and Mintimer Mingazov – to the board of directors.
As the publication notes, the new top managers conduct business “extremely friendly,” like professional MBAs. Danone still expects to sell the Russian business: the company has new potential buyers since the arrival of new management, and the company believes it can still make some money if it finds a suitable buyer approved by the Kremlin.
Yakub Zakriev. Photo: Said Tsarnaev / RIA Novosti
Foreigners’ shares in Danone were transferred to temporary management in Russia
On July 16, 2023, Russian President Vladimir Putin signed a decree on the transfer of foreign shares in Danone Russia JSC to the temporary management of the Federal Property Management Agency. Yakub Zakriev, deputy chairman of the Chechen government, minister of agriculture of the republic and nephew of Ramzan Kadyrov, was appointed general director of the Russian subsidiary of the French Danone.
Chechen Minister for National Policy, External Relations, Press and Information Akhmed Dudayev noted that Zakriev has extensive experience in the most responsible positions in Chechnya. In particular, he was the mayor of Grozny and the head of the administration of the head and government of the republic.
In August, it became known about the decision to rename the Russian subsidiary of the French Danone to H&N. In September, it changed its name and began using a new logo, which appeared on the company’s letter to contractors. It uses the English version of the updated name – Health & Nutrition (H&N). The company retained Danone’s previous corporate colors, white and blue, and replaced the red line under the previous name with a green leaf above the “&” sign. It is not yet known whether the logo is registered with Rospatent.
The transfer of control came as a surprise to the Western owners; they said they were investigating the situation and assured that asset impairment would not affect capital. The company also said it remains the legal owner of businesses in Russia even after the country’s government took control of its business.
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Photo: Kristina Kormilitsyna / RIA Novosti
Danone announced its intention to leave Russia in 2022
In October 2022, the French company announced its intention to leave the Russian market. Investors were offered to buy out 75 percent of the business, subject to the possibility of repurchasing the asset. Due to the difficulties of exiting the local market, the company was ready to abandon the use of global brands.
Later it became known that the company decided to localize the international brand Activia and rename it for the Russian market. It was reported that the changes should only affect the brand name and packaging design. The recipe for dairy products has not been changed – it will be produced according to the same quality and safety standards, using the same technology and at the same production facilities.
The press service of the Russian branch of Danone clarified that the localization of the brand will allow the company to resume investing in the development and support of the industry, which will have a significant impact on the development of modern dairy products in Russia.
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Putin explained the transfer of foreign assets to temporary management
The head of state emphasized that the transfer of foreign assets into temporary management cannot be regarded as a seizure of property. According to him, Russia is friendly to foreign companies that want to continue operating in the country.
Previous [решения] – not taking away property
The Russian leader made such a statement against the backdrop of concerns among Western companies doing business in Russia about the loss of all Russian assets and investments.
Then research fellow at the Carnegie Berlin Center for Russian and Eurasian Studies Alexandra Prokopenko (The Carnegie Foundation is recognized as a foreign agent in Russia) stated that “Western assets are no longer safe in Russia.” She believed that if the Kremlin “goes further,” the Russian economy could return to the 1990s, when there was a redistribution of assets in favor of “more favorable owners.”
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