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IKEA, the world's biggest home-furnishings retailer, will halt future investment plans in Russia until "key issues" affecting operations are resolved, the company's Russia chief said Tuesday.
While IKEA will finish current projects, "further investments will be temporarily halted," Per Kaufmann said in e-mailed comments. He did not specify the issues.
IKEA has faced at least four disputes with authorities while opening 11 stores since first entering Russia in March 2000.
"IKEA's case shows that the investment climate in Russia hasn't been improving," said Mikhail Krasnoperov, an analyst at .
IKEA plans to finish work in the cities of Samara, Omsk, Ufa and Moscow and continue talks on new stores in the Saratov, Voronezh and Tyumen regions, among others, Kaufmann said. In March, the company said it might halt expansion in Russia after the store opening in Samara was delayed because authorities balked at granting approval.
The company was "cheated" out of 1.5 billion kronor ($189 million) on overpriced gas and electricity bills in Russia, founder Ingvar Kamprad said in an interview with P1 radio channel, Dagens Nyheter newspaper reported June 20.
"The situation mentioned by Ingvar Kamprad is currently considered by a court," Kaufmann said. He declined to elaborate, saying "any comments may influence a court decision."
IKEA also had to postpone the opening of an outlet in the Siberian city of Novosibirsk in 2007 after local authorities required the company to build road links. Its outlet in Nizhny Novgorod was shut in December 2006 for the holiday season after Emergency Situations Ministry inspectors found more than 800 fire code violations on the premises.
In December 2004, officials blocked the opening of an expanded IKEA store in the Russian capital minutes before the start of the ceremony, citing the danger created by the location of its parking lot above a high-pressure gas pipeline.
IKEA Halts New Investment in Russia
24 June 2009
Bloomberg
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