The "half-baked" attempts by Western nations to punish
Russia, through sanctions, over its role in the Ukraine crisis are doomed to fail,
the head of a leading John Deere seller in the country said, after a tumble in the
price of its bonds.
Wolfgang Bläsi - chief financial officer of Ekotechnika, the
holding company for Ekoniva-Technika, Russia's largest dealer in
foreign-branded farm machinery – said that he was "very sceptical" over the
sanctions against Russia by the likes of the European Union and the US working.
"I do not see any reasonable outcome for the Western
countries," he said.
"To believe that these half‐baked measures bring Russia to
give in cannot be taken seriously."
The crisis "can be solved only by active co-operation of the
Ukrainian government, the EU and Russia," said Mr Bläsi, who is also chief
financial officer at Ekosem Agrar, one of Russia's top dairy producers.
"Common trusting conversations instead of sanction spirals
and recriminations are the only means to progress here ‐ we are moving ever
further away from a solution, every day a bit more."
However, he was optimistic over the situation "stabilising",
and of an improved performance at German-based Ekotechnika, which saw its bond
rating downgraded to CCC from B by rating agency CreditReform last week, before
Russia announced restrictions on imports of food products from the likes of the
EU and the US.
"The [import] restrictions have no meaning for us," he told
The downgrade reflected both the risk for companies
operating in Russia, as well as the company's widening losses.
Instead, it was the weakening of the rouble prompted by the
region's ructions, besides the squeeze on Russian farmers' access to loans,
which was undermining Ekotechnika, which saw its losses double to E10.6m in the
The loss was caused largely by a revaluation of inventories
of foreign farm equipment, of which the group sells in particular John Deere
machinery, to account for a decline in the rouble, which has lost 6% over the past
month as regional tensions have revived.
On sales, "when selling machines based on euro or dollar
prices, payment at the daily exchange rate will be converted in roubles, so
that falling prices lead to higher sales," said Mr Bläsi, also a former chief
financial officer at German farm operating KRG Agrar.
In the April-to-October period, the second half of the group's
financial year, and a seasonally stronger period for trade, "we expect positive
currency effects on the figures, which lead, from today's perspective, to an improvement
Already, in the April-to-June quarter, the group had
achieved "good" farm machinery sales, "well above the industry average".