Singaporean Firm First Foreign Investor in Russian Milk Production

Feb. 1 – Singapore-based commodity trading group Olam International will invest a record-breaking US$400 million in Russia over the next five years, in a joint venture with its new partner Russian dairy firm Rusmolco LLC.

The decision was announced after the two companies signed a partnership agreement on Monday for the large scale development of dairy and grain farming in the Penza region of Russia, where Rusmolco has nine dairy facilities.

“Russia is one of the most attractive markets for dairy farming today,” the Singapore-based company said. It cited large supply shortages and Russia’s status as the “lowest-cost producer of grain today” as the rationale behind its investment. Read the rest of this entry »

Russian Private Equity Market Grows in 2011

Jan. 18 – Russia saw 15 new private equity funds established last year, but very few newly established and existing funds succeeded in attracting institutional investors, Financial Consulting Group (FCG) says in its report “Private Equity Market in 2011.”

The non-food retail sector – clothing retail, children’s clothing and toys, household appliances, and media retail (movies, music, etc.) – was at the center of attention for private equity funds last year. Read the rest of this entry »

Sino-Russian ‘Bad Dates’ and Chinese Relations with ‘Abandonment Child’ of Moscow

By Marina Romanova

Sino-Russian series of bad dates
Chinese-American international energy consultant Edward Chow once said that the Russian-Chinese energy relationship isn’t a marriage, but rather “a series of bad dates.” As far as their energy relationship goes – also keeping in mind the two rather extreme types of relationship of ‘honeymoon’ (1950s) and ‘divorce’ (1960s and 1970s) between Beijing and Moscow – the whole Sino-Russian strategic partner can be described with this kind of metaphor.

Chinese businessmen and bureaucrats are playing a part in almost every Russian investment round-table and economic forum. And it wouldn’t be too much to say that almost every presentation by Chinese participants contains some words about Russia’s “investment unattractiveness” as one of the main reasons not to invest in the Russian economy. Read the rest of this entry »

Toyota Corp. to Open Dealerships in Far East Russia by Next Summer

Dec. 23 – Toyota Motor Corp. plans to open new authorized dealer’s centers in the Far East Russian cities of Khabarovsk, Vladivostok and Nakhodka by summer of 2012, President of Toyota Motors Russia Takeshi Isogaya said in a statement released to the press.

Dealer’s centers would be established in concentrated areas within the cities already receiving Japanese investment. Read the rest of this entry »

Moscow to Cut Gas Price for Minsk, Offer US$10 Billion in Loans

Nov. 29 – Minsk received everything it asked for from Moscow, including a reduced price for gas, a lucrative contract on its transit, and US$2.5 billion for a 50 percent stake in the unprofitable state-run Beltransgaz. Furthermore, Russia will lend Minsk US$10 billion to build a nuclear plant, Prime Minister Vladimir Putin said on Friday.

Belarus would pay US$164 per 1,000 cubic meters of Russian gas in the first three months of 2012, a discount of more than 40 percent on the price it paid Russian gas export monopoly Gazprom in the third quarter of 2011. The average price for 2012 was set at US$165.6. Read the rest of this entry »

Russian Phosagro to Discount Phosphate Fertilizers for Indian Buyers

Nov. 28 – Russian fertilizer group Phosagro agreed to cut current contract prices for India Potash Ltd. (IPL) and Indian Farmers Fertilizers Cooperative Ltd. (IFFCO) after a drop in the value of the rupee caused local prices to rise sharply.

In return, the Russian firm said in a statement, the two key Indian buyers committed to buying additional volumes of phosphate fertilizers, with Phosagro holding a seller’s option over those supplies. Read the rest of this entry »

New Issue of Russia Briefing: The Russia-Belarus-Kazakhstan Customs Union

Nov. 24 –The new issue of Russia Briefing Magazine, titled The Russia-Belarus-Kazakhstan Customs Union, is out now.

Nearly two years have elapsed since Russia, Kazakhstan and Belarus boldly began to link their economies by forming a Customs Union planned to evolve into a more ambitious common market by 2012, with Russia as its hub.

While the three states are still a long way off from the eventual Eurasian Union heralded by Russia’s Prime Minister Vladimir Putin as a bridge between Asia and Europe, the agreement has thus far managed to ease trade among the three large former Soviet economies in a rather short period of time.

In this issue of Russia Briefing, we will assess the implications the Customs Union has on trade, looking broadly at the principles and progress of the union thus far, and clarifying key modifications to the VAT procedures for transactions involving the three member states. Read the rest of this entry »

Russia’s Steel Producers to Become Partners with Vietnam Steel Corp

Nov. 22 – Two of Russia’s largest steelmakers – Novolipetsk Steel and Evraz Group SA – are interested in becoming strategic partners of Vietnam Steel Corporation (VN Steel), according to VN Steel President Le Phu Hung.

“We consider various possibilities of our billets rerolling to an end-product in Southeast Asia, but no decision has been made so far,” an Evraz representative said to the Russian daily Vedomosti.

Vietnam’s biggest steel producer made its IPO in early June this year, selling off a 5.75 percent stake – or 39.1 million shares – of its US$329 million in chartered capital to the public, Vietnam Investment Review reports. The share volume sold to the public fell short of the planned offering of 10 percent, or 68 million shares. Read the rest of this entry »

Russia’s Schools and Clinics to be Free from Profit Tax

Nov. 21 – Russia’s Cabinet has finally approved a list of educational and medical services that are no longer subject to pay profit tax. Authorities believe the move will attract investment and inspire entrepreneurs to set up new schools and hospitals, but the market is predicting only modest results.

The law on zero taxes for these kinds of entrepreneurs until January 1, 2020 was signed last year, but it could not come into effect until the list was compiled. Now the organizations providing the listed services will be exempt from the 20 percent profit tax. Read the rest of this entry »

Pros and Cons of Russia’s WTO Membership

Nov. 18 – After roughly 18 years of membership talks, Russia finally looks set to enter the World Trade Organization on favorable conditions, both Russian and international analysts say noting the minor import tariff cuts.

The final barrier keeping Russia from the global trade club fell when Russia and Georgia signed an agreement approving Russia’s WTO entry on November 9 in Geneva, after both agreed on international monitoring of the disputed crossings with the breakaway regions of South Ossetia and Abkhazia. Read the rest of this entry »

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