Published On: Mon, Dec 29th, 2014

Putin Ally Gennady Timchenko Enjoying Fruits of Russia’s Buoyant Apple Industry

Russian billionaire Gennady Timchenko,   whose oil firm Gunvor has been targeted by US sanctions

The Kremlin is using apples to strengthen its food security in response to U.S. and European sanctions on Russia this year, Reuters said.

From Aug. 7 Russia banned imports of fruit from various countries that supported sanctions, including Poland, which has been a strong critic of Russia’s actions in Ukraine. The ban had real impact: Poland is the world’s biggest exporter of apples and last year sent more than $380 million worth to Russia, according to International Trade Centre figures, the report said.

While Poland’s apple growers are suffering, the ban has also been an opportunity for an old friend of Russian President Vladimir Putin.

A day after Russia decreed Polish apples forbidden, Gennady Timchenko, who made a fortune from oil trading during Putin’s years in power, applied to buy a large stake in one of Russia’s biggest apple producers. Through his investment company Volga Group, he now owns 40 percent of Alma Holding, which has orchards in the Krasnodar region, southern Russia, Reuters said.

For Timchenko, 62, it is a chance both to profit from a market suddenly in need of homegrown apples and to support Russia in the face of Western sanctions. He portrays the investment as a patriotic act, a show of support for Putin, whom he has known since the 1990s, and of defiance against U.S. and European sanctions imposed on Russia over its meddling in Ukraine, the report said.

“This is our first asset in agriculture. I am sure … it will complement Volga’s portfolio of initiatives to strengthen food security, ” Timchenko said in a statement in October. “For me it is not just business, it is part of the social mission of my group.”

The deal also affords a chance for personal payback. In March, as part of its measures to punish Moscow over Ukraine, the U.S. Treasury put Timchenko on a list of individuals sanctioned as “members of the Russian leadership’s inner circle, ” according to Reuters.

Timchenko did not respond to a request for an interview. Volga Group told Reuters: “Apples are the number one fruit for Russian consumers. Russia is the biggest importer of apples in the world, and less than 50 percent of demand is produced in Russia … We see good opportunities to increase the company’s business.”

The investment suggests Putin’s circle may be benefiting from the very sanctions that the West hoped would spur them to persuade the Kremlin to change tack over Ukraine. While external investors have taken fright as the value of oil and the ruble have plunged, allies of Putin such as Timchenko are cash-rich and willing to strengthen their hold on Russia’s economy, the report said.

Meanwhile, Newsweek reported that Moscow’s fabulously wealthy appear to be doing fine despite facing the biggest economic challenge in two decades. It quoted a financial analyst as saying that many oligarchs and others with cash had plenty of time and warning to transfer their wealth out of the country well before this crisis, and that most of their net cash is safely in foreign currencies in foreign banks, and has been for a while.

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