IDS Borjomi Georgia has indefinitely ceased production, citing ‘difficulties’ brought about by the war in Ukraine. The company’s majority shareholder, Mikhail Fridman, a Russian oligarch, is currently facing Western sanctions.
IDS Borjomi, one of the biggest names in the Georgian mineral water industry, announced the ‘temporary’ cessation of its operations as of Friday.
In a statement, the company blamed disruptions in export markets as well as a lack of access to bank accounts.
‘The difficult situation created in the main markets for the sale of the company's products was compounded by the limited access to bank accounts, which closed the company to the possibility of receiving foreign exchange earnings and settling with creditors.’
Both Russia and Ukraine are among the top importers of Borjomi.
According to IDS Borjomi, the administration has offered several ‘solutions’ to its employees, without specifying any details, while confirming to OC Media that it plans on paying employees for the next month. However, Labor — a trade union of agricultural, trade, and industry employees — said that no settlement had been reached between the company and its roughly 400 employees.
The loss of jobs would represent a major blow to the town, which has a population of 11,000.
Alfa Group, owned by Russian oligarch Mikhail Fridman, has a controlling interest in IDS Borjomi, owning at least 60% of its shares. The investment holding acquired the stake from the family of the late Georgian businessman and oligarch Badri Patarkatsishvili in 2013.
Fridman was hit by western sanctions in the early days of Russia’s invasion of Ukraine, while on 15 March, the United Kingdom, the oligarch’s current place of residence, also imposed sanctions against him.
According to Forbes, in 2021, Fridman was the 11th richest person in Russia with an estimated fortune of $15.5 billion.