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Firms skittish on Russian trade

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As the retaliatory environment between Canada and Russia intensifies, a number of Manitoba business people are keeping their fingers crossed that travel bans and individual sanctions don't escalate into trade sanctions.

But there are worrying signs that trade sanctions may be in the offing.

Russia and Canada have both released a list of individuals, political and in some cases business leaders, who will not be allowed to travel in the respective countries -- 13 from Canada and 19 from Russia.

But at least one Manitoba export-industry official said he believes there is more to come.

"Our sources say the federal government is going to apply sanctions," said Ron Koslowsky, the Manitoba vice-president of the Canadian Manufacturers and Exporters.

And if that is the case, the Canadian companies that continue to do business in Russia and Ukraine will not be able to rely on recourse to Canadian government agencies if trade disputes occur.

A handful of Manitoba companies, particularly in the agricultural equipment and storage and handling business, have been doing a growing volume of business in that part of the world.

Ag Growth International, the Winnipeg grain-storage and handling equipment manufacturer, has been steadily growing its presence in Russia, Ukraine and eastern Europe as that part of the world has a substantial need to beef up its grain-handling infrastructure.

Dan Donner, the company's head of sales and marketing, said there has been no disruption in its business in that part of the world.

He said Ag Growth does not have any current business underway in Crimea, the Ukrainian region recently annexed by Russia.

"We have not seen anything," he said. "We haven't heard from customers that they are concerned about sanctions at this stage. Shipments continue into both countries and customers continue to provide new quotes."

Sean Lepper, head of operations at Behlen Industries in Brandon, said some Behlen officials just arrived in Moscow to attend a trade show related to sports and recreation facilities, and others attended another on aviation facilities a couple of weeks ago.

"It's a hot topic these days (potential trade sanctions) but what we are finding is that it's really business as usual at this point," he said. "We're very much continuing to push forward to do what we need to do to expand our presence there."

Last year, Behlen landed a contract to build what will be the largest frameless building in the world, an indoor facility currently being erected in Krasnoyarsk, Siberia.

Other agricultural equipment companies in Manitoba, including MacDon, Westeel and Buhler Industries, do business in Russia.

Buhler is 80 per cent owned by Russian combine manufacturer Combine Factory Rostselmash Ltd., and that company has been developing two-way trade between its products manufactured in Russia and Buhler in Winnipeg.

Recent reports have called for particular sanctions against three members of Buhler's board of directors, Konstantin Babkin, Yury Ryazanov and Dmitry Udrasm connected to Rostselmash Ltd., who are said to be members of Russia's Action Party.

A video has recently emerged from a rally in Moscow that shows Babkin publicly supporting Russian President Vladimir Putin's actions in Ukraine.

Republished from the Winnipeg Free Press print edition March 25, 2014 A7

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