SINGAPORE: At least one Singapore firm has suspended its operations in Ukraine where fighting rages on against invaders from Russia, while other businesses said they are monitoring the situation closely.
Russia launched the offensive in the early hours of Thursday (Feb 24) morning, shortly after President Vladimir Putin authorised what he called a special military operation in a televised address.
Russian missiles and shelling rained down on Ukrainian cities before tanks and other armoured vehicles crossed into Ukraine from several directions. The invasion followed weeks of escalating tensions, as Moscow massed more than 150,000 troops on Ukraine’s borders.
At least 137 Ukrainians were killed in the first day of fighting, with Russian troops advancing into the Ukrainian capital Kyiv.
Several international firms with operations in Ukraine, such as Carlsberg, Japan Tobacco and Coca-Cola, have announced temporary shutdowns, according to media reports.
Singapore-based agribusiness giant Wilmar International told CNA that its joint venture in Ukraine, Delta Wilmar, had on Thursday suspended operations at both of its processing plants located about 30km from the port city of Odessa.
Delta Wilmar employs about 600 people, according to its website. Its contributions to the group’s profit is “not significant”, said a Wilmar spokesperson, hence the Singapore-listed company does not expect a material impact on its overall business.
“Our top priority is the safety of our employees and we will continue to monitor the situation very closely,” the spokesperson added.
Olam, a Singapore-listed agri-food giant with offices and food processing facilities in both Ukraine and Russia, said its “overriding priority” is the safety of its people as it continues to assess the impact on operations.
Food and beverage manufacturer Food Empire said in an earnings release on Thursday that resilient sales and improving demand in its main markets of Ukraine and Russia have been “overshadowed by the ongoing conflict”.
It noted that current economic sanctions imposed on Russia are unlikely to have a direct or immediate impact on business prospects in these markets.
But the sanctions could cause an “adverse impact on the volatility of the exchange rates of the Russian Ruble and Ukrainian Hryvnia and further exert inflationary pressure on commodities prices and energy costs”, the Singapore-listed firm said.
“While details of prospective sanctions remain unclear, such new developments will compound the challenges faced by the group and present a more difficult operating environment going forward,” it added, noting that it is “closely monitoring the fluid situation and will do its best to manage”.
Enterprise Singapore told CNA that it is “monitoring the developments in Ukraine with grave concern”.
“Singapore companies have a limited presence in Ukraine. Given the evolving situation, we advise Singapore companies to monitor the situation closely and take the necessary steps to keep their employees safe,” a spokesperson from the government agency said.
Other Singapore businesses that do not have a physical presence in Ukraine, but procure food and agricultural items from the European country, are also monitoring the latest developments.
Egg wholesaler Kai Young Huat, which started importing eggs from Ukraine in 2019, said it has gotten in touch with its two local suppliers.
“They are alright, but they said the situation in the country remains uncertain and they are not sure if exports can continue,” said director Lee Siang Hwa.
Kai Young Huat had made orders for the months of April and May, with shipments for April scheduled to set sail soon given how it takes about one month for cargo ships to reach this part of the world from Europe.
That said, disruptions in egg supplies from Ukraine will not have a big impact given how the European country makes up a “small” share of the company’s imports, Mr Lee said.
Kai Young Huat procures almost three-quarter of its eggs from Malaysia, with the remaining sourced from a variety of countries like Thailand and Poland where supplies remain stable. Likewise, the broader Singapore market is unlikely to be affected given how the country takes its eggs from a diversified list of markets, said Mr Lee.
“The March shipments from Ukraine are already on their way and should reach us soon,” he told CNA in Mandarin.
"We will monitor how the situation goes before deciding if we want to continue ordering, but we can also increase our orders from other countries so the impact is not significant."
NTUC FairPrice is another importer of eggs from Ukraine but these make up less than 1 per cent of its sales. It noted that the bulk of its egg supplies are sourced locally and from Malaysia, with additional sources from Australia, New Zealand, Poland, Spain and Thailand.
“We will continue to monitor the situation closely and ensure that our customers have a stable supply of essential items at affordable prices,” said a FairPrice spokesperson.