Russian invasion will impact Mexican companies

Close-up on a red sign in a window written inside in English "Out of business".

Ukraine is one of the main grain producers in Europe, and the armed conflict with Russia will severly impact the industry and international prices will skyrocket.

(MEXICO CITY – TYT).- The effect of the armed conflict between Russia and Ukraine will impact Mexican companies due to the increase in the prices of raw materials. The list of affected companies includes Bimbo, Kuo, Gruma, Alfa, as well as airlines, automotive companies among others.

The direct impact on Mexican companies is related to the increase in the prices of raw materials: oil , gas and grains, that is going to be a problem”, warned Amín Vera Cerda, an analyst at Black Wallstreet Capital Mexico.

GAS PRICES

On the other hand, gas-intensive companies will also face higher costs. This includes firms such as Alfa, Alpek, Nemak, Kuo, Cemex, Bimbo, Gruma, as well as the manufacturing chain that operates in regions such as the north of the country.

Airlines such as Volaris and Aeroméxico will be hit by the price of jet fuel, which usually goes up when the price of oil increases, as it is one of its derivatives.

EXPENSIVE OIL

One of the main fears in the face of the armed conflict is the increase in inflation, an issue that already generates stress among the economies of the entire planet, since Russia is the third largest producer of crude oil in the world.

The increase in the price of raw materials can be absorbed by companies to a certain degree, but another part of these adjustments will be transferred to the consumer, affecting their personal economies.

According to information from the Russian embassy in Mexico, companies such as Gruma, Omnilife, Nemak and Mabe operate directly in that country. 

MEXICAN COMPANIES TEMPORARILY SUSPEND THEIR OPERATIONS IN UKRAINE

Grupo Bimbo closed its operations in Ukraine temporarily due to the armed conflict with Russia. The company reported, via social networks, that “it temporarily suspended operations at its plant in Ukraine, which is located in the city of Dnipro, to safeguard the physical integrity of its 150 employees, who are all Ukrainians, due to the armed conflict that recently started.

Another Mexican company that announced the temporary closure of its operations in Ukraine was Gruma, the flour and tortilla manufacturer had to stop activities at its Cherkassy plant, where around 500 people work.

In the case of Gruma, the suspension occurred after the closure of the port of Odesa, through which they distribute their products to other markets. Meanwhile, the Gruma plant in Russia continues to operate normally.

 

The Yucatan Times
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