leaflet b construction sector in russia 2009 2012 promotion
DESCRIPTION
TRANSCRIPT
Construction sector in Russia 2009 Development forecasts 2009-2012Publication date: October 2009Languages: English
3rdedition!
quic
k lin
ks
Word from the author:
The construction industry in Russia has been hit hard by the global economic downturn. The slowdown on the domestic construction market began in 2008 and deepened in 2009, with 80% of construction projects suspended and virtually no new residential and commercial property projects started. For the first time in the current decade the value of construction works will shrink this year, by over 15% in comparison to 2008. However, the worst for Russia’s construction is over now as the market will stabilise next year and return to a growth path in 2011.
In 2010, construction of buildings will remain subdued due to the still ongoing problems with financing, but the industry will be stimulated by picking up capital expenditure for infrastructure
development projects. Investment in roads, railways and airport expansion will be driven by the federal programme to modernise the country’s transport system, which envisages total outlays of $420bn, including $147bn from the federal coffers. Assuming a down-to-earth scenario that only 10% of the programme will be implemented, this will translate into a $7bn annual boost in construction activity each year through 2015. With federal budget deficit expected at 3-7% of GDP in the three upcoming years, much of the funding for Russia’s infrastructure projects will have to be attracted from private investors through schemes such as public-private partnerships and other non-budgetary sources, which will thus gain growing importance.
Robert Obetkon, Senior Construction Market Analyst
See other reports See how to order
See the table of contents See the list of graphs and tables
2
www.constructionrussia.com
quic
k lin
ks
About the report:
This third edition of PMR’s popular report, Construction sector in Russia 2009, Development forecasts 2009-2011 provides readers with a timely assessment of the construction industry in Russia as a whole, describes conditions in each major segment – engineering, non-residential and residential construction – and explores the major opportunities for the coming years. It supplies vital new information on planned energy and transportation infrastructure projects.
As lagging economic conditions slow development and construction around the world, this report examines the reasons why Russia remains a country of continuing opportunity for construction related businesses and investors. Government funded projects, an abundance of in-demand natural resources and an increasing need for housing continue to provide solid options for innovative construction related businesses in each federal district of Russia’s vast and varied economy. Profiles of the largest companies engaged in locating and seizing those opportunities enhance the informational value of this document.
The professionals at PMR have gathered all of the latest market intelligence and assembled it into this single clear, concise document – ready for delivery to you in convenient electronic format.
3
www.constructionrussia.com
See other reports See how to order
See the table of contents See the list of graphs and tables
quic
k lin
ks
In addition, Construction sector in Russia 2009, Development forecasts 2009-2011, third edition reveals all the details and plans of the market’s most successful players in a special section dedicated to insightful company profiles.
If you are looking for:
Russian economic conditions � , including domestic and foreign investment levels, inflation and exchange rates and current and projected GDPComplete coverage of the � Russian construction industry – output, top companies and profits, employment, wages, taxes, building materials and development forecastsRussian infrastructure development � – including planned projects for roads, railways, airports, gas and oil pipelines, power generation and environmental developmentNon-residential development status � – factories and warehouses, office facilities, hotels and trade and service facilitiesRussian residential construction market � conditions, including levels of housing stock and new construction, housing prices and federally funded housing construction plans…
…then this is the document you have been looking for!
Decreased availability of credit around the world has resulted in lower levels of foreign direct investment in Russian construction projects. Opportunities do exist, however, particularly in energy, infrastructure and transportation projects financed by government funding, and the steady demand for imported construction materials. Are you searching for the data, analysis and direction needed to locate these opportunities?
See other reports See how to order
See the table of contents See the list of graphs and tables
4
www.constructionrussia.com
quic
k lin
ks
Who will find the report Construction Sector in Russia 2009 most useful?
PMR has specifically targeted this report to meet the informational needs of top managers at regional construction companies, strategic planners and executive decision makers at companies considering market entry, regional producers and distributors of building materials and supplies, architectural and consultancy firms, developers, construction equipment producers, commercial and investment bank personnel and decision makers for real estate investment trusts will benefit from this concise yet comprehensive PMR publication. With a focus that is broad enough to present the complete market picture, yet specific enough to provide a solid basis for strategic planning, this report is a must-have resource for those interested in locating and maximising opportunity in the marketplace.
See other reports See how to order
See the table of contents See the list of graphs and tables
5
www.constructionrussia.com
quic
k lin
ks
��www.pmrpublications.com
Construction sector in Russia 2009 – Development forecasts for 2009-2012
Despite the doom and gloom brought about by the economic crisis, in the medium and long term, there is little doubt that the opportunities on the construction market in Russia are both lucrative and numerous. A mere fraction of domestic demand for housing and infrastructure development has been satisfied during the recent construction boom and so prospects for future development remain strong.
Employment and wagesIn 2008 the number of people employed in the construction industry increased by
6.5% to approximately 5.6 million. The economic downturn, however, resulted in H1 2009 employment levels falling by 4.8% in comparison with the same period of the previous year. The number of foreign workers employed on Russian construction sites decreased by almost 9% in H1 2009, to 730,700. As a comparison, in the first half of 2008, the number of foreign workers employed in the Russian construction industry rose by 80% in year-on-year terms.
Employment levels are expected to decrease further before the end of 2009 as companies still plan to lay off more workers than they intend to hire. The numbers of construction workers forced to drop from full to part time, or even accept unpaid leave, is also on the rise.
In the second quarter of 2010, the situation is expected to improve. Russian authorities recently announced that 75,000 construction jobs will be created in 2010 and 2011 as the country ramps up its preparations for the winter Olympics in 2014. At present, 11,000 workers are employed on Olympics-related construction projects in Sochi, of which 300 are foreigners. Construction projects related to the APEC-2012 Summit will also create new demand for labour. There are currently over 5,000 construction workers employed in these projects, almost 3,500 of which are working on the construction of two bridges: the 70-metre-high suspension bridge that traverses the Bosfor Vostochny Strait, which divides Vladivostok and Russky Island; and the bridge across the Golden Horn Bay. In 2010 and 2011, the expected peak construction period for these projects, at least 12,000 people will work on Russky Island alone.
Source: Rosstat, 2009
www.pmrpublications.com
Number of employed in construction industry in Russia (’000), 2005-2008
CSR019
4,916
5,073
5,268
5,610
2005 2006 2007 2008
In �00� the number
of people employed
in the construction
industry increased
to �.� million.
��www.pmrpublications.com
Construction sector in Russia 2009 – Development forecasts for 2009-2012
Traditional obstacles, such as high costs of building materials and structures, have ceased to pose such serious problems for constructors8. Instead, insolvency of clients has been the major problem for Russian constructors this year.
* Before 20
** Before 2008: over 200 workers
08: 101-200 workers
Source: Rosstat, 2009 www.pmrpublications.com
Capacity utilisation rate of construction companies in Russia (%),
by company size, 2006-2009
CSR027
including companies employing:All construction
companies
Fewer than 51 51-100 101-250* Over 250**
2006
Q1 61 50 60 64 70
Q2 60 49 61 64 68
Q3 65 54 65 66 73
Q4 66 56 65 67 72
Q1 65 55 62 65 71
Q2 66 57 65 67 72
Q3 68 58 68 70 74
Q4 69 59 67 70 75
2008
Q1 66 57 64 66 71
Q2 68 58 65 68 74
Q3 69 60 67 70 75
Q4 67 59 66 68 72
Q1 58 50 56 58 63
Q2 57 49 54 57 62
2007
2009
8 The same percentage of respondents now cite expensive materials as the main obstacle as was the case back in Q1 2006. Interestingly, at the beginning of 2006 just over half( 52%) of respondents cited high taxes as one of the main obstacles, which is 12 p.p. more than in Q3 2009.
Source: Rosstat, 2009
www.pmrpublications.com
Main barriers to doing business in the Russian construction sector
(% of all construction enterprises), Q4/2008-Q3/2009
CSR028
27
44 44
43
41
40
46
31
32
Q4/2008 Q1/2009 Q3/2009
Insolvency of clients High taxes Expensive building materials
�1www.pmrpublications.com
Construction sector in Russia 2009 – Development forecasts for 2009-2012
Investment Fund & PPPRussia’s Investment Fund (IF) was created at the end of 2005 with the aim of bolstering
the realisation of investment projects, particularly in the area of infrastructure. In 2006, RUB 69.7bn was earmarked for the IF, a figure that rose to RUB 72.9bn in 2007 and RUB 73.2bn in 2008. In 2009, as has been mentioned already, budget allocations for the IF are to be cut to RUB 64bn ($2bn). The IF is intended to become the primary source of funding for PPP projects and to act as a catalyst in attracting private investment. To date, the fund appears to have performed its task successfully – for every one rouble provided by the federal budget, just over two (2.2) roubles worth of private investment are attracted.
Investments from the IF may take the form of:direct financing of up to 75% of total capital project costs as equity investment or through the financing of certain assets in exchange for the ownership title to the assets
guarantee for 60% of the borrowings for the purposes of the project.
The project approval procedure involves three stages: investment commission, governmental commission, and finally approval, which takes place during a meeting of the Russian government.
Financing can only be provided for projects worth over RUB 5bn ($156m) over five-year period. Two types of evaluation are used for project examination: qualitative (first of all, generation of social benefits) and quantitative, which include:
macroeconomic productivity – the implementation of the project should contribute to an increase in GDP on a national or regional level
budgetary effectiveness – the project should generate tax revenues for local and federal budgets
financial effectiveness – i.e. the project should have a negative stand-alone net present value (NPV) justifying state support for implementation. It should generate economic profit if support is provided (creating a positive NPV). Project profitability should be at least 4%, but no higher than 11%.
In 2008, five road construction and five railway construction projects received support from the IF. This support amounted to RUB 18.5bn ($578m) in total.
So far, 21 investment projects of national importance have been approved by the government for state support from the IF. Support for these 21 projects amounts to RUB 400bn ($12.5bn).
In addition, between September 2008 and mid-2009 the ministry of regional development received 53 project proposals from over 30 regions requesting funding from the IF. The value of claims associated with these projects amounted to a combined total of RUB 51bn (of which private investors would contribute RUB 247bn while an additional RUB 20bn would come from regional budgets). Nineteen of these projects have already been approved by the government commission for project review. The total combined value of these projects is RUB 103.6bn ($3.2bn), of which RUB 13bn is to be provided by the investment fund.
See other reports See how to order
See the table of contents See the list of graphs and tables
6
www.constructionrussia.com
Excerpts from the report:
quic
k lin
ks
PMR MarketInsight Methodology:This report was prepared using PMR MarketInsight methodology developed by PMR which assists in the complex preparation of industry reports. It defines the ways in which data should be collected for such reports and outlines the methods to be used in analysing the information collected in order to obtain a true picture of the market in question. It also contains special procedures to follow in the case of incomplete market. PMR MarketInsight precisely defines report content and structure. Industry reports prepared using PMR MarketInsight are based on information from a variety of available statistical, industry, general and official sources as well as information from PMR’s own database and primary research independently carried out by PMR. The sources we use are individually tailored to each project.
Selected PMR clients:
See other reports See how to order
See the table of contents See the list of graphs and tables
7
www.constructionrussia.com
About PMR:PMR www.pmrcorporate.com a British-American company providing market information, advice and services to international businesses interested in Central and Eastern European countries as well as other emerging markets. PMR key areas of operation include business publications (through PMR Publications), consultancy (through PMR Consulting) and market research (through PMR Research).
PMR Publications www.pmrpublications.comprovides reliable market intelligence for business professionals interested in Central and Eastern European countries as well as other emerging markets. Publications by PMR analyse the business climate in the region, in particular in the construction, retail, IT, telecommunications and pharmaceutical sectors. The offer includes both free and paid reports, newsletters, online news services.
PMR Research www.research-pmr.comoffers a full array of qualitative and quantitative research methodologies, providing services such as customer satisfaction studies, brand awareness and brand image research, distribution and competition studies, segmentation analyses, fieldwork, online surveys and customised analyses of selected branches of the economy.
PMR Consulting www.pmrconsulting.comprovides a wide range of services, including market entry feasibility studies, sourcing, CI (competitive intelligence), strategic advisory, FDI assistance (M&A and greenfield projects), quick consulting as well as any other services and support a company might require to enter a market, find a business partner or gain reliable information.
PMR Ltd. Sp. z o.o., ul. Supniewskiego 9, 31-527 Krakow, Poland
Questions about ordering? Contact our sales department:tel. /48/ 12 618 90 30fax /48/ 12 618 90 08e-mail: [email protected]
See other reports See how to order
101109
��www.pmrpublications.com
Construction sector in Russia 2009 – Development forecasts for 2009-2012
Despite the doom and gloom brought about by the economic crisis, in the medium and long term, there is little doubt that the opportunities on the construction market in Russia are both lucrative and numerous. A mere fraction of domestic demand for housing and infrastructure development has been satisfied during the recent construction boom and so prospects for future development remain strong.
Employment and wagesIn 2008 the number of people employed in the construction industry increased by
6.5% to approximately 5.6 million. The economic downturn, however, resulted in H1 2009 employment levels falling by 4.8% in comparison with the same period of the previous year. The number of foreign workers employed on Russian construction sites decreased by almost 9% in H1 2009, to 730,700. As a comparison, in the first half of 2008, the number of foreign workers employed in the Russian construction industry rose by 80% in year-on-year terms.
Employment levels are expected to decrease further before the end of 2009 as companies still plan to lay off more workers than they intend to hire. The numbers of construction workers forced to drop from full to part time, or even accept unpaid leave, is also on the rise.
In the second quarter of 2010, the situation is expected to improve. Russian authorities recently announced that 75,000 construction jobs will be created in 2010 and 2011 as the country ramps up its preparations for the winter Olympics in 2014. At present, 11,000 workers are employed on Olympics-related construction projects in Sochi, of which 300 are foreigners. Construction projects related to the APEC-2012 Summit will also create new demand for labour. There are currently over 5,000 construction workers employed in these projects, almost 3,500 of which are working on the construction of two bridges: the 70-metre-high suspension bridge that traverses the Bosfor Vostochny Strait, which divides Vladivostok and Russky Island; and the bridge across the Golden Horn Bay. In 2010 and 2011, the expected peak construction period for these projects, at least 12,000 people will work on Russky Island alone.
Source: Rosstat, 2009
www.pmrpublications.com
Number of employed in construction industry in Russia (’000), 2005-2008
CSR019
4,916
5,073
5,268
5,610
2005 2006 2007 2008
In �00� the number
of people employed
in the construction
industry increased
to �.� million.
��www.pmrpublications.com
Construction sector in Russia 2009 – Development forecasts for 2009-2012
Traditional obstacles, such as high costs of building materials and structures, have ceased to pose such serious problems for constructors8. Instead, insolvency of clients has been the major problem for Russian constructors this year.
* Before 20
** Before 2008: over 200 workers
08: 101-200 workers
Source: Rosstat, 2009 www.pmrpublications.com
Capacity utilisation rate of construction companies in Russia (%),
by company size, 2006-2009
CSR027
including companies employing:
All construction
companies
Fewer than 51 51-100 101-250* Over 250**
2006
Q1 61 50 60 64 70
Q2 60 49 61 64 68
Q3 65 54 65 66 73
Q4 66 56 65 67 72
Q1 65 55 62 65 71
Q2 66 57 65 67 72
Q3 68 58 68 70 74
Q4 69 59 67 70 75
2008
Q1 66 57 64 66 71
Q2 68 58 65 68 74
Q3 69 60 67 70 75
Q4 67 59 66 68 72
Q1 58 50 56 58 63
Q2 57 49 54 57 62
2007
2009
8 The same percentage of respondents now cite expensive materials as the main obstacle as was the case back in Q1 2006. Interestingly, at the beginning of 2006 just over half( 52%) of respondents cited high taxes as one of the main obstacles, which is 12 p.p. more than in Q3 2009.
Source: Rosstat, 2009
www.pmrpublications.com
Main barriers to doing business in the Russian construction sector
(% of all construction enterprises), Q4/2008-Q3/2009
CSR028
27
44 44
43
41
40
46
31
32
Q4/2008 Q1/2009 Q3/2009
Insolvency of clients High taxes Expensive building materials
�1www.pmrpublications.com
Construction sector in Russia 2009 – Development forecasts for 2009-2012
Investment Fund & PPPRussia’s Investment Fund (IF) was created at the end of 2005 with the aim of bolstering
the realisation of investment projects, particularly in the area of infrastructure. In 2006, RUB 69.7bn was earmarked for the IF, a figure that rose to RUB 72.9bn in 2007 and RUB 73.2bn in 2008. In 2009, as has been mentioned already, budget allocations for the IF are to be cut to RUB 64bn ($2bn). The IF is intended to become the primary source of funding for PPP projects and to act as a catalyst in attracting private investment. To date, the fund appears to have performed its task successfully – for every one rouble provided by the federal budget, just over two (2.2) roubles worth of private investment are attracted.
Investments from the IF may take the form of:direct financing of up to 75% of total capital project costs as equity investment or through the financing of certain assets in exchange for the ownership title to the assets
guarantee for 60% of the borrowings for the purposes of the project.
The project approval procedure involves three stages: investment commission, governmental commission, and finally approval, which takes place during a meeting of the Russian government.
Financing can only be provided for projects worth over RUB 5bn ($156m) over five-year period. Two types of evaluation are used for project examination: qualitative (first of all, generation of social benefits) and quantitative, which include:
macroeconomic productivity – the implementation of the project should contribute to an increase in GDP on a national or regional level
budgetary effectiveness – the project should generate tax revenues for local and federal budgets
financial effectiveness – i.e. the project should have a negative stand-alone net present value (NPV) justifying state support for implementation. It should generate economic profit if support is provided (creating a positive NPV). Project profitability should be at least 4%, but no higher than 11%.
In 2008, five road construction and five railway construction projects received support from the IF. This support amounted to RUB 18.5bn ($578m) in total.
So far, 21 investment projects of national importance have been approved by the government for state support from the IF. Support for these 21 projects amounts to RUB 400bn ($12.5bn).
In addition, between September 2008 and mid-2009 the ministry of regional development received 53 project proposals from over 30 regions requesting funding from the IF. The value of claims associated with these projects amounted to a combined total of RUB 51bn (of which private investors would contribute RUB 247bn while an additional RUB 20bn would come from regional budgets). Nineteen of these projects have already been approved by the government commission for project review. The total combined value of these projects is RUB 103.6bn ($3.2bn), of which RUB 13bn is to be provided by the investment fund.
SUBSCRIPTION CARDTO ORDER RETURN THE FORM TO US VIA FAX ON: /48/ 12 618 90 08
Please send me the report:
Construction sector in Russia 2009 Development forecasts for 2009-2012Publication date: October 2009Language versions: English
1
2
* With this price the client is purchasing a license authorising the unrestricted copying, distribution and dissemination of the electronic PDF publication (in part or in whole) via a computer network solely within the organisation indicated on the order form, regardless of country location. By choosing the additional CD, delivered by courier, the client is purchasing the PDF version of the Report plus CD with extra files with all the graphs and tables in a copyable format easy to use in your own analyses and presentations.
Report
English
If your contact details are different to the invoicing details, please fax them to us together with the completed order form.
MrLast Name
Job title
Country
Tel./Fax Core business EU VAT Number
First Name
Company
Invoicing address
YOU
R LI
CEN
CEIN
VOIC
ING
DET
AIL
S Mrs Ms
PDF*
€1500
PDF + CD*
€1750
Please note that chosen PMR Construction sector reports, as part of a promotion, have one price for PDF version plus an extra price for additional CD version, which is valid until December 31st 2009.
3
4
Polish clients will be invoiced in PLN (based on the NBP exchange quoted on the day preceding the invoice date) and need to add 22% VAT. Foreign clients will be invoiced in EURO.
MONEY TRANSFER TO: CREDIT CARD:VisaDiners Club Eurocard / Mastercard American ExpressPMR Ltd. Sp. z o.o.
For Polish clients:Raiffeisen Bank Polska S.A.ul. Armii Krajowej 18, 30-150 KrakowAccount number: 36 1750 1048 0000 0000 0758 5225
For foreign clients:Raiffeisen Bank S.A.ul. Armii Krajowej 18, 30-150 KrakowAccount number: PL 92 1750 1048 0000 0000 0758 5284SWIFT CODE: RCBWPLPW
Name of card owner
Credit Card No
Billing address of card
Correspondence address
E-mail / Tel. to accounting
I undertake to contact PMR within seven days should I not receive any of the copies.In sending this form I authorise PMR to invoice me without my signature and to use the companydetails on the form for processing my subscription (Ustawa o ochronie danych osobowych Dz. U. nr 133/97, poz. 883)
Thank you! We will contact you soon to confirm your order.PMR Ltd. Sp. z o. o., tel. /48/ 12 618 90 00, fax /48/ 12 618 90 08, e-mail: [email protected], ul. Supniewskiego 9, 31-527 Krakow, Polska
NIP number: 676-20-95-189, destination of region court: Sad Rejonowy dla Krakowa-Srodmiescia w Krakowie XI Wydzial Gospodarczy Krajowego Rejestru Sadowego, KRS number: 0000057694, the amount of company’s nominal capital: one hundred and thirty thousand PLN
Signature: only signed forms can be processed
281107
PAYM
ENT
FORM
Account to be charged and currency (Credit card charges will be made in PLN at current exchange rates)
Valid until