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Russia's Growing Markets
22 March 2007
Russia's Growing Markets

Russia's Growing Markets
Investments Grow as the Economy Slowly Diversifies

By Josh Wilson, Asst. Director, The School of Russian and Asian Studies

The past few weeks have seen waves of press releases, articles, and government reports that all point to the fact that Russian markets are growing and diversifying and that American companies in particular are interested in investing and taking advantage of this. Below are a handful of articles that we came across. Note that most are for services and consumer goods.


Starbucks Unveils Plans For Russian Expansion
U.S. coffee giant Starbuck's has announced plans to open its first coffee shops in Russia later this year. This summer ten coffee shops will start operating in St. Petersburg and Moscow.

Coca-Cola to Make Kvass
Russians are skeptical, but the market is large and growing rapidly.

Wal-Mart Analyzing Russian Market - Company Vice President
The world's largest country, geographically speaking, could soon get stores that are part of the world's largest retailer, Wal-Mart Stores.

Toothpaste Dictates Development
Despite the fact that there are quite a few niches to be developed, overall oral hygiene growth is expected to remain dynamic in 2007. Consumption is gradually shifting towards more expensive products.

They've Driven a Ford Lately
Russians are snapping up its locally made models in record numbers.


Russia's Commercial Real Estate Gains Allure
Russia is luring real-estate investors away from some of its neighbors, thanks in part to burgeoning demand for shopping centers.

$30 Bln in Stock Offerings Slated for 2007
Alfa Bank analysts forecast that Russian companies will hold initial public offerings for $30 billion in 2007, the bank said in a press release.

$143 Bln Invested in Russia from Abroad in 2006, up 28%
Cyprus, Britain, the Netherlands, Luxembourg, Germany, France, the Virgin Islands, Switzerland and the United States were the largest investors in Russia during the reporting period, accounting for 84.8% of the country's total accrued foreign investment and 85.8% of total FDI, the statistics service said.


Taking Off
Although Russia's airline industry has experienced substantial expansion, it has not fully shed the baggage of the past. In Moscow, however, new project development is underway.

First Budget Airline for Russia
Russia's first budget airline, SkyExpress, piloted its maiden flight on Monday, January 29, and promised to shake up the market for domestic air travel in the world's largest country.

Commercial Flights Resumed to Grozny, Chechnya.
On March 8, a civilian airport in Grozny, Chechnya was reopened to commercial flights for the first time since 1994. Three regular flights Moscow-Grozny are expected weekly. The reopening of the airport is supposed to show that the war-ravaged region is rebuilding under the pro-Moscow administration of Ramzan Kadyrov. (contributed by Eugene Ivanov, Innocentive.com.) 


Chevron said Interested in Yukos Assets
Chevron Corp. has expressed interest in acquiring assets of OAO Yukos, a bankruptcy official said Friday, raising the prospect of a U.S. company participating in the liquidation of a business whose downfall rattled investor confidence in Russia.

Gazprom's Power Play
Through its state-controlled gas company, Russia is trying to acquire stakes in Europe's energy distribution networks. In the long run, it will likely succeed.

Russia, Qatar Eye OPEC-Style Natural Gas Cartel
Russian President Vladimir Putin and Qatari Emir Sheik Hamad bin Khalifa Al Thani told reporters here that they wanted more cooperation among competing gas producers in their dealings with natural gas-consuming countries.


Year of U.S. Sanctions -- And Record Sales -- For Rosoboronexport
Russia’s state arms trader, Rosoboronexport, set a new sales record in 2006 and expects to do the same in 2007, thanks to a Jan. 18 presidential decree making the firm's de facto monopoly on arms exports into a de jure one.


Tech Summit Looks Globally
U.S. corporate interest in Russia, Ukraine, the Czech Republic and several other countries is running high, despite political and commercial risks -- chiefly because those nations host deep reservoirs of creative technological talent.

Windows Vista Comes to Russia
As a special correspondent in London in the mid 1990s, I tried to interview Microsoft's owner during one of his visits to Britain. It was to no avail. The corporation's press service made it clear: Bill Gates wanted nothing to do with Russia, the nursery of intellectual piracy.

Software Giant Invests 100 Million USD in Russia
Seeing their Russian business grow by 60 percent in 2006, EMC announces plans for a 100,000,000 USD investment in Russia.


24-hour Business News FM Radio Launched in Moscow
A new FM radio station "Business FM" starts broadcasting on 1 March [2007]. "This is a new format of a talk radio - a round-the-clock broadcasting which will fully inform the targeted audience on the most important economic and business news." the radio's PR director Yelena Bystrova told Interfax on Saturday [24 February].

RIA Novosti to Launch English-Language Weekly 
RIA Novosti will further expand into the print media with the launch of an English-language weekly newspaper on Friday, the agency's editor-in-chief said.

New Moscow Weekly
The first issue ran two major themes, the Litvinenko murder and what the magazine calls "Operation: Successor - 2008."  An on-line version of the magazine is available at: NewTimes.ru


Forbes Magazine Billionaires Ranking
Forbes presented a listing of the world's top 400 richest people. Listings include rank, name, home country or state, age where known, wealth in billions of dollars and source of wealth. Forbes says the research that when into compiling the rankings began in early 2006 and ended on Feb. 9, 2007. The following are Russians included on the list.

16. Roman Abramovich, Russia, 40, $18.7, oil
35. Suleiman Kerimov, Russia, 41, $14.4, stocks
36. Vladimir Lisin, Russia, 50, $14.3, steel
38. Vladimir Potanin, Russia, 46, $13.5, metals
38. Mikhail Prokhorov, Russia, 41, $13.5, metals
40. Oleg Deripaska, Russia, 39, $13.3, aluminum
45. Mikhail Fridman, Russia, 42, $12.6, oil, banking
48. Vagit Alekperov, Russia, 56, $12.4, oil
54. Alexei Mordashov, Russia, 41, $11.2, steel
61. Viktor Vekselberg, Russia, 49, $10.4, oil, metals
71. Vladimir Yevtushenkov, Russia, 58, $9.1, telecom
83. Nikolai Tsvetkov, Russia, 46, $8.4, oil, banking
86. German Khan, Russia, 45, $8, oil, banking
86. Iskander Makhmudov, Russia, 43, $8, mining, metals
104. Viktor Rashnikov, Russia, 58, $7, steel
116. Alexei Kuzmichov, Russia, 44, $6.2, oil, banking
132. Dmitry Pumpyansky, Russia, 43, $5.7, steel pipes
137. Alexander Abramov, Russia, 48, $5.6, steel, mining
142. Alisher Usmanov, Russia, 53, $5.5, steel
150. Roustam Tariko, Russia, 45, $5.4, banking, vodka
152. Leonid Fedun, Russia, 50, $5.3, oil
167. Boris Ivanishvili, Russia, 51, $4.7, steel, banking
172. Andrei Melnichenko, Russia, 35, $4.6, banking, energy
172. Sergei Popov, Russia, 35, $4.6, banking, energy
194. Leonid Mikhelson, Russia, 51, $4.3, natural gas
237. Vladimir Bogdanov, Russia, 55, $3.7, oil
237. Alexander Lebedev, Russia, 47, $3.7, stocks
243. Pyotr Aven, Russia, 52, $3.6, oil, banking
271. Dmitry Rybolovlev, Russia, 40, $3.3, fertilizer
279. Elena Baturina, Russia, 44, $3.1, construction
314. Mikhail Goutseriev, Russia, 49, $2.9, oil, real estate
390. Alexander Frolov, Russia, 42, $2.4, mining, steel
390. Filaret Galchev, Russia, 44, $2.4, cement

(Review developed in conjunction with The School of Russian and Asian Studies)

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