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Russian Fries for McDonald’s; Tyson Looks Abroad; Fresh Iran Sanctions |
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Today’s newsletter was written by the WSJ Logistics Report’s Jennifer Smith.
Supply-chain realpolitik is yielding double dividends for McDonald’s Corp. in Russia. The fast-food company makes a point of finding local producers to shrink the distance between suppliers and its restaurants while helping hedge against foreign-currency fluctuations. The WSJ’s Thomas Grove writes the American burger giant is touting its use of Russian suppliers as it woos customers in a market where new McDonald’s restaurants are opening four times as quickly as they are globally. McDonald’s began hunting down more local producers after Russian authorities shut some locations in 2014 because of U.S. sanctions. Its use of Russian suppliers hit
98% this year when it also signed a contract for the first time to buy french fries from a Russian company that is teaching local farmers how to meet McDonald’s exacting standards. Still, Russian politicians may not be lovin’ it, as calls to close the chain persist.
A U.S. meat glut has Tyson Foods Inc. seeking stability abroad. The biggest American meat processor wants to reduce exposure to domestic agricultural-market swings and is looking at possible deals outside the U.S., the WSJ’s Jacob Bunge reports. The U.S. is awash in record levels of chicken and pork, and the oversupply along with tariffs by Mexico and China has tamped down prices and sharpened competition. Buying meat-processing or food companies elsewhere could help spread the risk, says Tyson Chief Executive Noel White. The company is also retooling its strategy in China to focus on selling branded products like chicken nuggets after avian influenza
outbreaks and slowing economic growth eroded poultry demand. A recent deal to acquire McDonald’s supplier Keystone Foods will expand Tyson’s broader Asian portfolio, adding facilities that could supply more products to the Middle East and Northern Africa.
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A new Russian potato-processing plant is producing McDonald's french fries./REUTERS
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Western firms that invested in Iran are facing new hurdles as fresh U.S. sanctions take effect. Measures to close off critical finance channels could hamper operations for businesses that set up production there years ago, and complicate matters even for companies with food, medical and other U.S. Treasury waivers, the WSJ’s Asa Fitch and Denise Roland report. Many are trying to keep their relatively new supply chains running. Danish pharmaceutical giant Novo Nordisk A/S says limits on banking options “will make it more difficult to run our business,” while Nestlé SA and Coca-Cola Co. are working to mitigate the sanctions’ impact on their Iranian
operations. The country’s economic woes have also crimped business for Western exporters such as California-based Fresh Del Monte Produce Inc., which stopped shipping packaged food there earlier this year because currency fluctuations meant prices became too high for Iranian consumers.
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Bombardier Inc. is ceding ground to its global aerospace competitors. The Canadian plane and train maker is slashing another 5,000 jobs, the WSJ’s Robert Wall and Colin Kellaher report, and selling its turboprop plane-making and pilot-training units. The deals signal an end to its push to wrestle market share from aviation titans Boeing Co. and Airbus SE. A decade ago Bombardier began developing a fuel-efficient jet meant to rival the Boeing 737 and Airbus A320. But it found few takers, and technical problems caused costs to skyrocket. The deals announced this week leave Bombardier as a diminished manufacturer of private jets, regional jetliners, plane
parts and trains, and the company is now exploring strategic options for its regional plane business.
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“People are only now starting to understand: We’re one of the most Russian companies there is.”
| — Elena Chilingaryan, a Moscow-based spokeswoman for McDonald’s. |
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1.6% |
Year-over-year rise in coal carloads in October, the first increase in five months, according to the Association of American Railroads.
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