GERMAN INVESTMENTS INTO RUSSIA OSINT

SUMMARY:

Germany is generally looking to strengthen its small and medium-sized businesses and has the Federal Ministry of Economics and Technology backing German small/medium-sized businesses by coordinating with them. New and high-end technologies are key foreign investment sectors for Germany

In Russia, Germany is actively pushing infrastructure development, with concentration on energy efficiency, the health care industry, information and telecommunications technology.

In order to create an appropriate environment, the removal of barriers to trade and the promotion of small and medium-sized enterprises headed the agenda of the SWG. This will help to release the potential of highly innovative German medium-sized companies engaging in plans to modernize the Russian economy.

Approximately 6,500 German companies are currently operating in Russia. Their cumulative investments are around $23 billion as of November 2010. German firms provide one sixth of investments in Russia. SOURCE

Bilateral trade between Germany and Russia increased by 29.6% between Jan – Sep 2010, as compared to 2009, increasing to €42.0 billion (compared to €32.4 billion in 2009). SOURCE

In addition,

Major Firm Investments Timeline:

Nordstream – Fmr. Chancellor Gerhard Schroeder is in charge of the Gazprom-owned project (conflict of interest?)

May 2008 - Xella a concrete manufactureinvests €24 million in 2008 for the production of its aero concrete SOURCE

Dec 2010Daimler – Daimler invests €100 million in GAZ Nizhny Novogod to produce the Mercedes-Benz Sprinter SOURCE

BMW Group in the Kaliningrad region DaimlerChrysler to produce agricultural machinery Bayer for the production of rubber and construction of chemical factory in St. Petersburg MAN Ferrostall construction of chemical plant for methanol production in Arkhangelsk with the

participation of MAN Ferrostaal BASF (through a subsidiary - the company Wintershall) in projects for exploration and

production of oil and natural gas Metro wholesale and retail German retail branch Swedish company IKEA AVA (Edeka), which begins building its own network of hypermarkets «Marktkauf"

Siemens – over 2.2bn euro ($2.8bn) deal with SINARA to produced double-section electric freight locomotives, 240 have been ordered; Siemens and Russia Railways signed a deal for the modernization of 22 railway yards by 2026 and local production of Desiro commuter trains (planned production volume: 1,200 train cars produced in 10 years).

15 July 2010 - Siemens signs a partnership and cooperation agreement in the renewable energy sector with Russian companies Rostechnologii and RusHydro to produce wind turbine components, aiming for 1,250 megawatts of total capacity by 2015, generating an overall capacity of 5,000 megawatts by 2020.

The German firm also inked a deal with state conglomerate Russian Technologies and utility company RusHydro.

Russia’s VEB development bank and Germany’s KfW bank group for their part signed an agreement to support small and medium-sized businesses.

Feb 2011 – SOURCE

Other areas of close German-Russian collaboration:

G8 Partnership -

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SOURCES

http://www.bmwi.de/English/Navigation/Press/press-releases,did=373038.html Retrieved 110303 at 11:20am

Press Release 2010-11-26

Minister Brüderle meets with Russian Prime Minister Putin

Declaration signed on the economic priorities of the German-Russian modernisation partnership

Federal Minister of Economics and Technology Rainer Brüderle met today with Russian Prime Minister Vladimir Putin, who was in Berlin for a one-day working visit. Both Mr. Brüderle and Mr. Putin took part in a round table organised by the Committee on Eastern European Economic Relations, where business representatives exchanged views on current issues facing German-Russian economic relations.

On this occasion, Minister Brüderle stated: "The global financial and economic crisis in 2009 also had an impact on German-Russian economic relations. However, just in the course of this year, we have succeeded in gaining back most of the ground we lost during the crisis. Now, by intensifying our co-operation in forward-looking economic sectors, we want to expand the basis for trade and investment between Russia and Germany and to place our economic relations on strong structural foundations for the long term.

Very good conditions are falling into place. The successful conclusion of bilateral negotiations between the EU and Russia regarding Russia's WTO accession gives reason for optimism that Russia will soon be integrated even more closely into the global economy. Economic activity between our two countries will benefit considerably from this. In order for our economic ties to flourish, it is important for Russia to reduce protectionist measures and to establish a dependable framework for investment."

Earlier today, the Economics Ministries of Germany and Russia signed a declaration that specifies priorities for economic co-operation within the framework of the German-Russian modernisation partnership that was launched in 2008. The declaration was signed by Dr. Bernd Pfaffenbach, State

Secretary at the Federal Ministry of Economics and Technology, and Andrey Slepnev, Russia's Deputy Minister for Economic Development, who serve as co-chairs of the German-Russian strategic working group on economic and financial affairs.

The declaration aims in particular to strengthen bilateral co-operation in sectors that are crucial for establishing a modern, broad-based economy in Russia. Certain projects are already leading the way toward this objective, such as joint efforts in the fields of energy efficiency and renewable energy, which have been underway since 2009 and are being co-ordinated by the Russian-German energy agency Rudea.

For the period January-September 2010, bilateral trade between Germany and Russia posted a 29.6% gain over the same period in 2009, totalling €42.0 billion (2009: €32.4 billion). Imports and exports increased at approximately the same rate. However, this was still 20.5% below the level for the same period in the pre-crisis year of 2008 (€52.8 billion).

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http://rbth.ru/articles/2010/10/21/berlin_paris_moscow_axis05046.html Retrieved 110303 12:38pm

The Berlin-Paris-Moscow axis

October 21, 2010

Business New Europe

For most of the last decade, Western European politicians have been staring down their wrinkled noses at Russia, complaining about its poor record on democracy, human rights and corporate governance. But over the last year, French and German politicians have beaten a path to the country to make sure they get a piece of what is soon to become the largest consumer market on the continent and one of the few that is sure to grow over the coming years.

Source: Ria Novosti

Europe has done an abrupt about-face in its attitude to Russia, and a Berlin-Paris-Moscow triangle has appeared in European politics. The change is remarkable. Russian President Dmitry Medvedev has been talking non-stop about improving Russia’s investment climate and glad-handing with European leaders to rebuild relations. Only three years ago, then-President Vladimir Putin gave a fiery speech in Munich as relations decayed to levels of animosity not seen since the Cold War that amounted to an ultimatum: stop criticizing Russian internal affairs or the Kremlin will look for new friends.

The economic crisis has changed everything. Rich countries could afford high-minded ideals before the financial firestorm swept the globe in Fall 2008, but now faced with impossible debt loads and crushing deficits, the key goal is to get economies moving – and Russia is one of the few places in Europe where companies can make any money.

Germany was the exception to this EU conceit. Former chancellor Gerhard Schroeder spent most of the last decade wooing Russia. As a result, Schroeder won a nice job for himself – he now works for Russian state-owned gas giant Gazprom as head of the Nord Stream gas pipeline project. But this project should also prove a boon for his country, as the pipeline terminates on the German Baltic coast, making Berlin a lynchpin in European energy politics.

When Angela Merkel took over as chancellor in 2005, she pointedly gave Moscow the cold shoulder, choosing to visit Poland on her first foreign visit. More recently, relations have improved, as the chancellor follows Germany's leading companies to this increasingly important European market. The rest of the German elite have taken her lead. "In Germany, we have an old saying that goes like this: 'When Russia seems strong, it is not as strong as it seems. When Russia seems weak, it is not as weak as it seems'," wrote Wolfgang Clement, a former German economy minister, in an op-ed in The Moscow Times in October. "The relations between Germany, the European Union and Russia can be summed up in five words: We depend on one another."

Reaching the summits

German President Christian Wulff was in Moscow for a state visit in the middle of October, complete with military honors and gala dinners, and gushed about the growing ties between the two countries. "About 6,500 German companies are working in Russia, and many of them plan to enlarge their business,” Wulff said in one of his many speeches.

The Kremlin, on a modernization drive that needs foreign investors, returned the compliment. "We have a large amount of cumulative German investments in the Russian economy. This is almost $23 billion. The growth in the first half-year equalled nearly $6 billion," said Prime Minister Vladimir Putin at his meeting with the German president. That means Germany already accounts for just over a sixth of all Russian investment on its own.

France has been slower to follow, but over the last year, it has been impossible to attend any high-level investment conference without running into the impressive French finance minister, Christine Lagarde, who was in Moscow again in October for VTB’s second investment summit, her third visit this year. Speaking on the eve of the IMF annual meeting and just ahead of the start of France’s chairmanship of the G7, she came bearing gifts. "There is a new monetary policy in the world. It is not unilateral, not bilateral, but multilateral—we need to be multilateral in all areas," said Lagarde at the event, echoing Russia’s decade-old position that was widely ignored while the United States was still the only superpower in the world. Lagarde crowed in the same speech that French investment into the Russia economy has just overtaken that of the U.S.

If there were any doubts over France and Germany’s commitment to pleasing the Kremlin, then the

Deauville summit between Medvedev, Merkel and French President Nicolas Sarkozy in the third week of October should have put them to rest.

The German and French leaders promised to nix visa restrictions on Russian travelers to their respective countries (although not anytime soon). The Kremlin has aggressively been pushing for the end of visa restrictions, as it is the top item on the population’s wish list for Russia’s foreign policy – and both Russian leaders face elections over the next two years.

Sarkozy's office spilled the beans during the Deauville talks saying, "Russia wants the EU to relax visa requirements, while EU nations want clearer access to Russian gas and its economy." Merkel said the same thing, calling for an acceleration of a treaty with Russia that could address plans to abolish visas between Russia and the EU, even at a time when both Germany and France have taken a radical lurch to the right and clamped down hard on immigration.

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http://www.bmwi.de/English/Navigation/Press/press-releases,did=373038.html Retrieved 110303 12:17pm

2010-11-26

Minister Brüderle meets with Russian Prime Minister Putin

Declaration signed on the economic priorities of the German-Russian modernisation partnership

Federal Minister of Economics and Technology Rainer Brüderle met today with Russian Prime Minister Vladimir Putin, who was in Berlin for a one-day working visit. Both Mr. Brüderle and Mr. Putin took part in a round table organised by the Committee on Eastern European Economic Relations, where business representatives exchanged views on current issues facing German-Russian economic relations.

On this occasion, Minister Brüderle stated: "The global financial and economic crisis in 2009 also had an impact on German-Russian economic relations. However, just in the course of this year, we have succeeded in gaining back most of the ground we lost during the crisis. Now, by intensifying our co-operation in forward-looking economic sectors, we want to expand the basis for trade and investment between Russia and Germany and to place our economic relations on strong structural foundations for the long term.

Very good conditions are falling into place. The successful conclusion of bilateral negotiations between the EU and Russia regarding Russia's WTO accession gives reason for optimism that Russia will soon be integrated even more closely into the global economy. Economic activity between our two countries will benefit considerably from this. In order for our economic ties to flourish, it is important for Russia to reduce protectionist measures and to establish a dependable framework for investment."

Earlier today, the Economics Ministries of Germany and Russia signed a declaration that specifies priorities for economic co-operation within the framework of the German-Russian modernisation partnership that was launched in 2008. The declaration was signed by Dr. Bernd Pfaffenbach, State Secretary at the Federal Ministry of Economics and Technology, and Andrey Slepnev, Russia's Deputy Minister for Economic Development, who serve as co-chairs of the German-Russian strategic working group on economic and financial affairs.

The declaration aims in particular to strengthen bilateral co-operation in sectors that are crucial for establishing a modern, broad-based economy in Russia. Certain projects are already leading the way toward this objective, such as joint efforts in the fields of energy efficiency and renewable energy, which have been underway since 2009 and are being co-ordinated by the Russian-German energy agency Rudea.

For the period January-September 2010, bilateral trade between Germany and Russia posted a 29.6% gain over the same period in 2009, totalling €42.0 billion (2009: €32.4 billion). Imports and exports increased at approximately the same rate. However, this was still 20.5% below the level for the same period in the pre-crisis year of 2008 (€52.8 billion).

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http://www.thepeninsulaqatar.com/business-news/120398-germany-russia-cement-ties-with-trade-pacts.html

Germany, Russia cement ties with trade pacts

Friday, 16 July 2010 03:10

YEKATERINBURG: Russian President Dmitry Medvedev and German Chancellor Angela Merkel yesterday oversaw the signing of multi-billion-euro deals to cement tight Moscow-Berlin links further.

German engineering giant Siemens signed deals worth several billion euros for the supply of trains and wind turbines to Russia as the country embarks on a drive to modernize its outdated economy.

Siemens also agreed to help the Kremlin in its efforts to establish a technology centre in Skolkovo just outside Moscow — the country’s answer to Silicon Valley — for which the government has earmarked 170bn rubles ($5.5bn).

“These truly are serious, big agreements,” Medvedev told reporters after the talks with Merkel — their fifth meeting this year — in the Urals city of Yekaterinburg.“This is the evidence of a fundamental character of our strategic partnership.”

Medvedev expressed hope that German companies would bring their expertise to the Skolkovo high-tech hub as he welcomed a decision by Siemens to build a research centre there.

“This is a very encouraging example for us,” he said.

Under a memorandum of understanding Siemens will modernise 22 Russian railway switching yards by 2026 and jointly with Russian Railways build 240 regional trains over the next 10 years.

Siemens is also to install wind turbines with a total capacity of up to 1,250 megawatts in Russia by 2015, the company said in a statement.

The deals have a total value of “several billion euros”, Siemens said, without giving further financial details.

German government sources have reportedly said the railway deal alone is worth ¤2.2bn ($2.8bn).

The German firm also inked a deal with state conglomerate Russian Technologies and utility company RusHydro.

Russia’s VEB development bank and Germany’s KfW bank group for their part signed an agreement to support small and medium-sized businesses.

Medvedev invited German businesspeople to invest in companies which had until recently been off limits to foreigners.

“I expect that German companies will take part in the modernisation of companies they are interested in, also taking into account my decision to reduce the number of strategic enterprises,” Medvedev said.

Last month, Medvedev announced he was cutting fivefold the number of firms deemed “strategic” and in which the state is obliged to own a stake, opening the way for broader participation of foreign companies in the economy.

He also expressed hope that Russia’s “strategic partnership” with Germany would help Russian companies expand their footprint in the Western European market.

While German investment in Russia amounted to around 20 billion dollars, Russian investment in Germany lagged behind.

“There is a certain disproportion indeed,” Medvedev said. “Of course we would like to be more actively represented in the German economy. We have both a desire and money for it,” he added.

Germany is Russia’s main economic partner and enjoys close diplomatic relations with Moscow.

Medvedev this week told Russian diplomats that one of their top tasks was to help businesses forge economic alliances with the West and Germany in particular.

“Germany should take a worthy place in the modernization alliances,” the Kremlin chief said on Thursday.

Calling Medvedev “dear Dmitry,” Merkel for her part said Russia and Germany had achieved “a high level of understanding.”

“I believe that the aim to diversify Russia’s economy, put it on a broader footing also meets the needs of our cooperation,” Merkel said, noting that 6,000 German companies were now active in Russia.

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http://www.powergenworldwide.com/index/display/articledisplay/9290231590/articles/powergenworldwide/renewables/wind/2010/07/siemens-signs_wind.html

Siemens signs wind turbine production agreement with Russia's Rostechnologii, RusHydro

Published: Jul 15, 2010 15 July 2010 - Siemens has signed a partnership agreement for cooperation in the renewable energy sector with the two Russian companies Rostechnologii and RusHydro to produce wind turbine components. The three companies will establish the joint venture “wind energy” where Siemens will retain the majority stake. The planned joint venture is to set up production facilities for wind turbine components for the Russian market and will also be responsible for sales and service of Siemens wind turbines in Russia and other countries. "This strategic partnership will put us out front on the highly-promising market for renewable energy in Russia", states René Umlauft, CEO of the Renewable Energy Division of Siemens. Russia is planning to have a wind power capacity of approximately 5000 megawatts installed by 2020. "In the coming five years we intend to install wind turbines with a total capacity of 250 to 500 MW per year." With this joint venture in Russia, Siemens is pushing determinedly ahead with the regionalization of the manufacturing network on important markets. In the current year alone Siemens will bring three further factories for production of wind turbine components on line in the USA and in China. Other production facilities are planned for India and the UK.

http://www.bmwi.de/English/Navigation/External-economic-policy/foreign-trade-campaign.html Retrieved 110303 12:04pm

Foreign Trade and Investment Campaign

On 23 March 2010, Federal Minister of Economics and Technology Rainer Brüderle unveiled the Economics Ministry's Foreign Trade and Investment Campaign.

Container ship at port© Colourbox.com

1. Providing political support for the international economic activities of German companies 2. Tapping the full potential of policy instruments 3. Cutting red tape - boosting trade 4. Shaping an effective policy framework for foreign trade and investment:

Providing political support for the international economic activities of German companies

The Ministry's political support for the international economic activities of German firms will place a central priority on small and medium-sized enterprises (SMEs), and international trips by the Minister and his State Secretaries will give particular consideration to SMEs. We will also work together with business associations in exploring ways to help SMEs participate in bids for larger contracts.

We want to attract the world's best minds to Germany by providing for the open and non-bureaucratic recognition of diplomas and qualifications obtained abroad.

We will take action to foster the mobilisation of German industry during the run-up to major sporting events. For example, security technology was one of the main topics on the agenda for Federal Economics Minister Rainer Brüderle's visit to Brazil (host of the 2014 World Cup) in April 2010.

We intend to support German companies on markets with major economic potential, and we aim to identify and act on forward-looking trends. To this end, we will pool our foreign trade and investment activities in accordance with specific thematic priorities. Key steps will include:

o creating an export-oriented component as part of our national platform for electric mobility, and organising an international electric mobility conference in 2011;

o formulating a policy framework in 2010 to promote foreign trade and investment in the health care industry;

o launching a security technology export initiative;o providing political support for the acquisition efforts of Germany's defence industry in

compliance with export rules;o providing continuous support for the aerospace industry's activities in growth markets.

We will press forward with the worldwide marketing of earth remote sensing data and services, particularly with a view toward the innovation and market potential of the future Galileo satellite navigation system;

o placing an even stronger emphasis on forward-looking energy supply systems as a central component of our external economic policy and expanding these efforts into a genuine "external energy policy". In this connection, we will press forward with our export initiatives for renewable energy and energy efficiency to boost the export and dissemination of German technology on foreign markets;

o boosting exports of cultural and creative products and services and enhancing international awareness and recognition of what Germany's cultural and creative

industries have to offer. To this end, our existing set of instruments to promote foreign trade and investment will target this sector more effectively, and these activities will be conducted in cooperation with the German government's Centre of Excellence for the Cultural and Creative Industries;

o targeting knowledge-intensive sectors such as pharmaceutical technology, biotechnology, medical technology and environmental technology.

We will establish procurement information centres in cities where United Nations offices are located, in order to better assist German companies participating in the procurement processes of international organisations.

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http://rt.com/business/news/german-building-materials-firm-invests-24-million-into-russia/

German building materials firm invests €24 million into Russia

permalink email story to a friend print version

Published: 14 May, 2008, 15:51

Germany’s building materials manufacturer Xella is launching its first production unit in Russia. The company is investing €24 million in the production of its aero concrete on the premises of a concrete plant in the city of Mozhaisk near Moscow

This is in response to skyrocketing demand and prices for building materials.

Moscow is now the biggest real estate market in Europe. Construction has caused a shortage of raw materials supply such as cement.

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http://rt.com/business/news/spur-russian-commercial-vehicles/

Daimler teams up with GAZ to spur Russian commercial vehicles

Published: 23 December, 2010, 17:44

TAGS: Retail, Regional development, Commodities, Russian economy, Infrastructure, Big deal

Daimler has selected GAZ as its Russian partner and is planning to invest more than €100 million producing the Mercedes-Benz Sprinter in Nizhny Novgorod

At an official presentation attended by Prime Minister Vladimir Putin in Nizhny Novgorod the German auto giant announced that it was teaming with Gaz, controlled by Oleg deripaska’s Basel group, in Russia. Daimler CEO, Dr. Dieter Zetsche, said the Russian van market offers great opportunities and emphasized that his company was looking at the longer term.

“Russia is an attractive place to invest with great opportunities for growth, and that’s why Daimler has made a long-term commitment to it. The partnership with GAZ underscores once again the fact that Daimler has come to stay and to achieve further growth.”

Depending on the outcome of a feasibility study the two companies plan to produce Mercedes-Benz Sprinter vans in Russia. Plans, supported by locally produced engines, transmissions, axles, and other components, which can be used Mercedes-Benz and GAZ product portfolio.  Sprinter output will be roughly 60000 per year. Sales and servicing is planned via the existing Mercedes-Benz dealer network with support from certain GAZ dealers.

AUTOSTAT analyst Azat Timerhanov said a tie up with GAZ was more logical than one with Kamaz with which Daimler also has close ties.

“GAZ already has enough experience for the production, sale and maintenance of light commercial vehicles, so the decision to choose Daimler as a partner is GAZ is quite logical.GAZ conveyor is more suitable for the production of LCV, than manufacturing facilities of KAMAZ. In addition, as it became known, the implementation and maintenance of minibuses Mercedes Sprinter, assembling on GAZ facilities, is expected to realize through a dealer network of Mercedes-Benz in Russia. GAZ dealers will provide a support in this direction they've adapted to it and there is no need to

establish a service-sales network from scratch.”

Daimler estimates that the LCV market in Russia is about 117,000 vehicles per year, and the company reckons that market will grow to 275,000 by 2020. Volker Mornhinweg, Head of Mercedes-Benz Vans, said the potential size of the Russian market was a key part of Daimler’s focus on the country.

 “For Mercedes-Benz Vans Russia remained an unexplored market. Our traditional markets are in Western Europe, Latin America, and North America. In Russia the market volume for midsized and large vans is about 117,000 units. By 2020 the market is expected to grow to approximately 275,000 units. That shows how important and right it is to be active in Russia. Together with GAZ we will put the optimal products for the Russian market on the road. To do this, Daimler will invest more than €100 million.”

Siegfried Wolf, Chairman of the GAZ Board of Directors explained in his letter to Prime Minister Putin that this partnership is a milestone for the company with export benefits and optimization of output capacity

“The partnership with Daimler enables GAZ Group to load capacity and to stabilize the financial and economic situation, as well as developing its own engineering competence by bringing innovative technology from western countries. This project has export potential and It falls within the Russian Government drive to increase the automotive industry’s share of the GDP. GAZ expects to create its own model on Daimler cars base in future”

Bo Andersson, President of GAZ Group pointed out extra advantages of the partnership

 “The cooperation will see GAZ´s existing LCV production facilities upgraded with employees receiving new training. All this will help to improve the consumer characteristics and the reliability of GAZ´ own models. It is expected that around 25,000 Sprinter vans will roll off the assembly line in Russia in a typical year. As GAZ and Mercedes LCVs largely target different customer groups, both companies expect to be able successfully develop in their respective market segments in Russia”.

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Germany and Russia Discuss Strategic Partnership in Microelectronics, Investments into Infineon, Qimonda.

Authorities Confirm Talks Regarding Russian Investments into Infineon, Qimonda

[08/14/2009 01:03 PM]by Anton Shilov

The chancellor of Germany and the president of the Russian Federation on Friday confirmed discussions regarding potential strategic partnership in the field of microelectronics as well as possible investments into chipmaker Infineon AG and its daughter company Qimonda AG. No actual details have been revealed, but the claims confirm interests of Russia to invest into the European semiconductor giant.

“We talked about strategic partnership in the field of electronics. The key-word here is Infineon and, possibly, Qimonda. […] [Such projects] provide chances for more intensive cooperation based on the win-win principles, when both parties succeed,” said Angela Merkel, the federal chancellor of Germany, during a press conference.

Late on Thursday a Russian business daily reported that Sistema Financial Corp., a high-technology investment firm from Russia, is interested in acquiring a stake in Infineon. However, the report claimed that there were no direct discussions between Sistema and Infineon, but the negotiations were held at the highest political levels.

Infineon badly needs money these days. Earlier this year it applied for state aid. Besides, Infineon owns 77.5% stake in Qimonda, the maker of dynamic random access memory that filed for insolvency early this year, which is being liquidated. Meanwhile, Russia-based companies need access to modern technologies and would be interested in acquiring a stake in high-tech companies.

“Such ideas like investing into Infineon or Qimonda, or acquisition of Opel, those are high-tech fields, are exactly something that we need, something that will improve the structure of our economy and may provide protection during the future downturns,” said Dmitry Medvedev, the president of Russia, at the press conference.

At this time no actual deals were announced, as a result it is hard to say whether Sistema or other high-tech financial institution is interested in buying a stake in Qimonda and at what terms.

Tags: Infineon, Qimonda, Sistema, Semiconductor, Business

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http://www.bloomberg.com/apps/news?pid=newsarchive&sid=af_UJ9VSrYzg

Russia May Purchase Stake in Infineon, Sistema Says (Update1)

By Maria Ermakova and Ragnhild Kjetland - September 17, 2009 07:08 EDT

Sept. 17 (Bloomberg) -- Russia’s government is in talks with Germany to buy a stake in semiconductor maker Infineon Technologies AG, said AFK Sistema, billionaire Vladimir Yevtushenkov’s holding company.

The Russian government plans to purchase a stake in Infineon, Sistema Chief Executive Officer Leonic Melamed said at a press conference in Moscow. “Sistema is being invited to participate in this project as an industry professional expert,” he said.

Sistema doesn’t have plans to buy Infineon shares, said Anton Abugov, Sistema’s vice president for strategy and development. “If some options of a possible cooperation with the government are found, we may consider them,” he said.

If Russia were to take a stake in Infineon, Europe’s second-largest maker of chips for cars, electronic devices and passports, it would add to other commercial ties between Germany and Russia. This year, German industrial giant Siemens AG quit a joint venture with French nuclear reactor builder Areva SA to design, build and operate nuclear plants with Russia’s state-run nuclear holding company Rosatom Corp.

Another project is the Nord Stream pipeline connecting Germany and Russia via the Baltic Sea, due to start deliveries in 2011. That project is backed by Russian Prime Minister Vladimir Putin and chaired by former German Chancellor Gerhard Schroeder.

Cooperation Options

A spokesman in German Chancellor Angela Merkel’s office referred questions to the Economy Ministry, which said it would look into the matter.

“We are always in talks with companies all over the world about cooperation that might make sense, but there’s nothing concrete related to Sistema at the moment,” Infineon spokesman Kay Laudien said by phone from Munich today. “Everyone knows that there have been some talks on a political level.”

The Kommersant newspaper had reported that Sistema wanted to buy a 20% stake for about 1 billion euros ($1.47 billion) and Russian state development bank VEB might finance the transaction. VEB spokeswoman Ekaterina Karasina declined to comment.

In August, Infineon spokesman Laudien said he was aware of Russia’s interest in some form of cooperation.

Rights Offer

Sistema’s Abugov said Infineon approached Sistema in the spring this year, offering participation in a planned share issue. “Sistema rejected the proposal and passed the information over to the Russian government,” Abugov said. “We are consulting the government on a possible integration of Infineon’s services in Russia.”

In August, Infineon completed a 725 million-euro, 2.15 euros-per-share rights offer. It was underwritten by Apollo Global Management LLC. After announcing the capital increase, the company’s traded shares rose to widen the discount on the stock to 25 percent on the last day of the offer, from an initial 6.8 percent discount. Infineon is spending the proceeds to pay off debt and invest in the business.

Infineon fell 0.3 percent to 3.80 euros at 1:05 p.m in Frankfurt trading, giving the company a market value of 4.13 billion euros.

-- With assistance from Claudia Rach in Berlin. Editors: Robert Valpuesta, Vidya Root.

To contact the reporters on this story: Maria Ermakova in Moscow at mermakova@bloomberg.net; Ragnhild Kjetland in Frankfurt rkjetland@bloomberg.net

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net

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http://outsourcing-russia.com/docs/?doc=1223

German Media On Cooperation With Russian IT CompaniesThe model project for the promotion of cooperation between German and Russian firms in the field of IT has started successfully.

Source: Auriga, Inc.Aug 29, 2006

The Russian IT market is booming. Russia is set to become an attractive partner in Central and Eastern Europe owing to a growth rate of 25 to 30 percent, whilst it was selected to be a partner country of CeBIT, the greatest worldwide IT fair, in 2007. For this reason, in February of this year, the Karlsruhe Department of Economic Development, in association with BITKOM (German Association for Information Technology, Telecommunications and New Media), CLOE (Clusters linked over Europe), CyberForum Karlsruhe and RUSSOFT (Russian Software Developers Association), commissioned a study to ascertain the possibility and readiness for cooperation between both countries and, based on the findings of this study, develop a model approach which would pave the way for business contacts and support cross-border economic relations. The first positive results were already to be seen shortly after the conclusion of the study.

Evgeni Deryugin, Business Development Manager of Auriga, came from Moscow to Karlsruhe and the Technology Region to begin exploratory talks with potential cooperation partners in Germany. Auriga has been in the market for 15 years as a development service for high-tech software, with particular focus on the areas of system software, embedded systems and real-time systems. In Moscow’s development centre as well as in locations in the USA and France, Auriga presently employ a workforce of 240. Globally active companies such as IBM, Hewlett-Packard, Siemens, Toshiba and Dräger Medical Systems rank as some of Auriga’s most prominent customers. The visit programme included exchanging information with member firms in the CyberForum and a discussion with the CAS chairman of the board, Martin Hubschneider, at the Karlsruhe Technology Park.

‘We have drawn the attention of Russian IT companies to Karlsruhe and the Technology Region with our initiative unique in Germany. The visitors immediately appreciated the existing networks CyberForum and CLOE as well as the international business strategy of our IT companies. The first reactions from Russia already show that Karlsruhe is taken seriously as a door to the German IT market’, illustrated Manfred Groh, Bürgermeister in charge of economic affairs, who is exceedingly satisfied with the outcome of the initiative, for besides Auriga, further companies from Russia have already expressed their interest in information talks.

As a summary of the results, the director of the Department of Economic Development in Karlsruhe, Dr. Adolf Kopp, stated, ‘The study has proved that there is a large market potential in the IT domain which can be opened up through German-Russian cooperation – and that Karlsruhe is an excellent location for such transactions’.

Ewgenij Deryugin was convinced that ‘the initiative from Karlsruhe came at the right time’. He further stated that ‘the IT market in Russia shows an enormous dynamism and there are many companies which are interested in a cooperation with Germany as a strategic partner in Europe. Karlsruhe has led the way and I’m impressed by the IT potential of this area.’

Identifying new prospects, Martin Hubschneider, managing director of the CyberForum and chairman of the board of CAS Software AG, stated, ‘The business start up platform 'CyberForum' supports firms in their activities in Eastern Europe opening up the potential of this continually expanding market. CAS Software, too, valued the approach and the exchange that will help us to find out the chances of cooperation which can ultimately benefit both parties.’

‘The merit of this study is to direct the interest of German firms towards the possibility of becoming involved in the Russian IT market’, said Dr. Mathias Weber from BITKOM. ‘For this reason we have chosen Russia as partner country of BITKOM in 2007’.

"Markets of information technology: Russia and Germany" - primary results of the project

The study was commissioned in February 2006. It was based upon a survey among eleven Russian and ten German firms and institutions. Decision makers were asked to define the chances and risks of cooperation and to outline the necessary basic conditions and activities that they deem necessary to promote cross-border cooperation.

The results can be summarized as follows:

There is an interest in cooperation. However, scepticism still prevails on the German side. No single firm from Russia would decline to cooperate with German companies. 82 percent of

the Russian entrepreneurs questioned have already initiated cooperation with German companies. 45 percent have a technology transfer commitment in Germany (offshoring, co-production, licensing). For 33 percent the relationship concerns a trade partnership (import, export).

Only two of the German firms questioned reported a successful experience in the Russian market (one of them selling products, the second producing in Russia). The number of "inexperienced" firms on the German side is higher: Five firms still haven’t considered this subject but given the opportunity, it is likely that they would cooperate in business with Russia.

70 percent of German firms and 64 percent of Russian firms consider offshoring/ outsourcing to be a starting point for further intensive cooperation between Germany and Russia taking into account the countries’ specific conditions. This could be the basis for the development of other cooperation forms, which should be arranged so as to promote a "mutual win-win situation" for the German as well as the Russian economy.

The survey revealed that the challenges met most frequently by German companies when working with a Russian partner were inefficient administration, corruption, cultural and language difficulties, which strongly affect the development of bilateral cooperation. It is interesting to note that cultural and linguistic barriers are still of importance though in recent times the cultural proximity between Germany and Russia has been emphasised.

Russian firms have stressed that the positive aspects and the opportunities provided through cost reduction and access to new markets far outweigh the existing disadvantages and problems. Regarding a list of overestimated disadvantages, the Russian firms questioned were in agreement: 91 percent of the firms were of the opinion that cultural and linguistic difficulties can be overcome by direct contact.

A fifth of the German companies questioned aren’t able to find any reliable information which would be useful for their business planning. About three quarters of the questioned firms are looking for direct, reliable sources. On the Russian side the situation is similar.

Poor networking: Even if a majority of German firms see a strong commitment in the Russian IT market as a great challenge promising large profits in the future, the intensity of cooperation remains on a low level.

For further development more than the half of German firms (56 percent) need both a strong commitment from the Russian side as well as more support and business recommendations from the German side. Russian companies agree 100 % that they need more commitment from the German side to support their business operations in Germany.

Conclusions and Recommendations

It is both possible and useful to initiate and to modify German-Russian economic relations through offshoring/outsourcing.

To improve the partners’ ability to cooperate is the most effective way to attain international competitiveness. Emphasis was given to the following points:

Offshoring/outsourcing as a means of innovation obviously carries risk and is expensive.

Offshoring should be seen as a precondition for further cooperation in the area of innovation. Furthermore, against a backdrop of increasing international activity and competition in the field of research and development, it should serve as a way into foreign countries (Russia) for local firms (German companies) and enable them to secure their position within Germany.

Innovation networking and the integrated cooperation resulting fro

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http://www.mediaglobe.ru/eng/news/german_technology/

GERMAN TECHNOLOGY TO THE RUSSIA'S MILITARY CONSTRUCTORS

27.10.2009

On August 6, 2009, dated to the Day of the Constructor scheduled meeting of the Federal Agency Board on special construction of Russia took place on the basis of Russia's Spetsstroy Military Technical University in Balashicha.

According to the tradition the members of the Board have visited the exhibition of the existing university exhibition fund, as well as the materials presented to the special guests of the exhibition. The exhibition stand of "Benninghoven Rusland" Ltd., the Russian subsidiary of the largest bituminous concrete plants producer, German company Benninghoven, has attracted the special interest of the Russia Spetsstroy command. The Visitors of the stand have come to know the series-produced models, as well as the latest innovations in bituminous concrete plants construction, including those to be displayed at domestic exhibition and company's 100-years’ anniversary in Germany.2000-2008 MEDIA GLOBE

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http://www.kooperation-international.de/en/russland/themes/info/detail/data/44418/

German-Russian cooperation in laser technology successful

Laser weld seam on the shell of the photochemical reactor, made using a Trumpf laser. Equipment for a water treatment plant in Russia has been built with the help of German laser technique. This is an example of the successful cooperation in a project between Germany and Russia. In Russia there are five Laser Innovation Technological Centers (LITC), which are supported by the Federal Ministry of Education and Research (BMBF).

The idea behind the LITCs is based on a network of testing and consulting centers for laser technology, which was founded in Germany in 1996. Just like in Germany, the LITCs in Russia want to make their laser know-how available to a broad industrial spectrum.

An example for the work in this project was given by the LITC Moscow. A company asked the center for help in constructing a photochemical reactor for water decontamination. Different parts of a reflective stainless steel had to be cut using a laser, and then welded together to form a reactor shell. Since the

reactor works under a pressure of up to 6 ATM, the welding seams had to be hermetically sealed and maintain narrow tolerances.

The laser technology for this project was exported from Germany to Moscow. The laser of the south German company Trumpf (Ditzingen) was connected to a processing head of the company Scansonic, based in Berlin. Both parts were then connected to a KUKA robot (Augsburg). Finally, using German technology, the engineers in Moscow could fabricate this complex piece to the satisfaction of the company.

Ultimately, the project follows two main goals. On the one hand, the LITCs provide small and medium-sized businesses (SMB) in Russia with a sort of "jump start in laser technology." The expansion of laser manufacturing in Russia is being supported through consulting and testing. On the other hand, this project should help German laser technology to have a wider basis in Russia.

The Laser Zentrum Hannover e.V. (LZH) carries out research and development in the field of laser technology and is supported by the Ministry of Economic Affairs, Labour and Transport of the State of Lower Saxony (Niedersächsisches Ministerium für Wirtschaft, Arbeit und Verkehr).

Contact

Laser Zentrum Hannover e.V. (LZH)

Michael Botts

Hollerithallee 8

D-30419 Hannover

Tel.: +49 511 2788 - 151

Fax: +49 511 2788 - 100

E-Mail: m.botts(at)lzh.de

Web: http://www.laser-zentrum-hannover.de/en/index.php

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http://www.kooperation-international.de/en/russland/themes/info/detail/data/39186/

Russian-German Laser Network at the Photonics Fair in Moscow

[ARCHIVE]

external Linkhttp://www.photonics-expo.ru/en/

The "Network of Russian-German Laser Centers" will be exhibiting at the fair "Photonics. World of Lasers and Optics" from April 20th to 23rd, 2009 in Moscow. The five members of the expert network will present their services in the field of laser technology at a joint exhibition stand.

The individual "Laser Innovation Technological Centers (LITC)" from Moscow, Yekaterinburg, Kaluga, Rostov and St. Petersburg are especially geared towards small and medium-sized enterprises (SME's). The idea behind the LITC is based on the network of laser testing and consulting centers, which was founded in Germany in 1996. Like in Germany, the Russian LITC aim at presenting their laser know-how to a wide industrial base, acting as a sort of "jump start" in laser technology for SME's.

The five Russian centers will not only present the network at the Photonics fair in Moscow, but will also show uses of laser technology in industry, including samples that were manufactured in the course of the project.

The project leader and stand organizer is the Laser Zentrum Hannover (LZH), who is bringing the expertise they gained in the project in Germany into the LITC. "If the Russian network is as successful as the German network was," says project head Klaus Nowitzki of the LZH, "there will soon be a boom in the industrial use of lasers in Russia."

The network of Russian-German Laser Centers LITC, which is supported by the Germany Ministry of Education and Research (BMBF), is located in Pavilion 3, Stand G 30.

Contact:

Laser Zentrum Hannover e.V. (LZH)

Michael Botts

Hollerithallee 8

D-30419 Hannover

Phone: +49 511 2788-151

Fax: +49 511 2788-100

E-Mail: m.botts@lzh.de

Internet: http://www.lzh.de

Source: Laser Zentrum Hannover e.V.

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http://www.kooperation-international.de/en/russland/themes/info/detail/data/51425/

Network of Russian-German Laser Centers Expands

Two new Testing, Consulting and Training Centers for the industrial use of laser technology have opened in the regions Taganrog and Kaluga. The Network of Laser Innovative-Technogical Centers (LITC) now has expanded its activities to five centers in Russia. The goal of the centers for the industrial use of laser technology in Russia under the leadership of the Laser Zentrum Hannover e.V. (LZH) and the Bavarian Laser Center (BLZ) is to modernize manufacturing in Russia with the help of laser technology and know-how from Germany.

Logo LZHAt the end of September, two new Testing, Consulting and Training Centers for the industrial use of laser technology opened in the regions Taganrog and Kaluga. The Network of Laser Innovative-Technogical Centers (LITC) now has expanded its activities to five centers in Russia.

The goal of the centers for the industrial use of laser technology in Russia under the leadership of the Laser Zentrum Hannover e.V. (LZH) and the Bavarian Laser Center (BLZ) is to modernize manufacturing in Russia with the help of laser technology and know-how from Germany. German enterprises, in return, hope to have easier access to the market in these economically interesting regions of Russia. The five laser centers of the network use modern laser equipment from leading German companies like Trumpf, LIMO Lissotschenko, Rofin Sinar, Jenoptik or the Maschinenfabrik Arnold. Depending on the available equipment, each site has specialized in certain areas of laser technology, for example cutting and welding of metals, plastics or other non-metal materials, or on surface treatment.

At the LITC's, especially the small and medium sized enterprises from the region, but also research institutes and universities have the possibility to use modern laser equipment to push process development and training and education, and to open new fields of application. Support in training and education for specialists in the fields of laser technology and laser safety are given by the staff of the German laser centers in Lower Saxony (LZH) or Bavaria (BLZ).

The Southern Laser Innovative Technology Center (SLITC) in Taganrog is located near one of the important centers of the Russian aeronautic industry. Obninsk, on the other hand, site of the Kaluga Laser Innovative Technology Center, is well-known for its automotive industry. These two new innovation centers are joining the centers already established in Moscow, Saint Petersburg and Jekaterinburg. At the opening ceremonies in Taganrog and Obninsk, a number of representatives from regional companies, universities and organisations were present, along with German cooperation partners. Head of the Training and Education Group at the LZH, Markus Klemmt said, "The main advantage is in the networking. The consulting competencies and the training and education courses in the new centers will also be available for the whole network."

By engaging local enterprises, for example the Beriev Aircraft Corp. und AviaOK International, the Southern Federal University, and the Laser Association Russia, and local government offices, the project initiators could form important cross-connections between industry, science and politics, even during the set-up phase. This regional networking plays an important role, not only for the successful establishment of laser technology in Russia, but also for the interregional cooperation between the five Russian-German laser centers.

The "Testing, Consulting and Training Centers for Laser Technology in Russia" project is supported by the German Federal Ministry of Education and Research (BMBF) in the framework of the programme "Optical Technologies". This project aims at furhtering scientific and technical cooperation between Russia and Germany. The project management is carried out by the VDI-Technologiezentrum GmbH.

The Laser Zentrum Hannover e.V. (LZH) carries out research and development in the field of laser technology and is supported by the Ministry of Economic Affairs, Labour and Transport of the State of Lower Saxony (Niedersächsisches Ministerium für Wirtschaft, Arbeit und Verkehr).

You can find the LZH press releases with a WORD-download and when possible illustrations at www.lzh.de under "publications/press releases"

Contact

Laser Zentrum Hannover e.V.

Michael Botts

Hollerithallee 8

D-30419 Hannover

Germany

Tel.: +49 511 - 2788 - 151

Fax: +49 511 - 2788 - 100

E-Mail: m.botts(at)lzh.de

Web: www.lzh.de

Source: Laser Zentrum Hannover e.V.

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http://www.xbitlabs.com/news/other/display/20090814130353_Authorities_Confirm_Talks_Regarding_Russian_Investments_into_Infineon_Qimonda.html

Germany and Russia Discuss Strategic Partnership in Microelectronics, Investments into Infineon, Qimonda.

Authorities Confirm Talks Regarding Russian Investments into Infineon, Qimonda

[08/14/2009 01:03 PM]by Anton Shilov

The chancellor of Germany and the president of the Russian Federation on Friday confirmed discussions regarding potential strategic partnership in the field of microelectronics as well as possible investments into chipmaker Infineon AG and its daughter company Qimonda AG. No actual details have been revealed, but the claims confirm interests of Russia to invest into the European semiconductor giant.

“We talked about strategic partnership in the field of electronics. The key-word here is Infineon and, possibly, Qimonda. […] [Such projects] provide chances for more intensive cooperation based on the win-win principles, when both parties succeed,” said Angela Merkel, the federal chancellor of Germany, during a press conference.

Late on Thursday a Russian business daily reported that Sistema Financial Corp., a high-technology investment firm from Russia, is interested in acquiring a stake in Infineon. However, the report claimed

that there were no direct discussions between Sistema and Infineon, but the negotiations were held at the highest political levels.

Infineon badly needs money these days. Earlier this year it applied for state aid. Besides, Infineon owns 77.5% stake in Qimonda, the maker of dynamic random access memory that filed for insolvency early this year, which is being liquidated. Meanwhile, Russia-based companies need access to modern technologies and would be interested in acquiring a stake in high-tech companies.

“Such ideas like investing into Infineon or Qimonda, or acquisition of Opel, those are high-tech fields, are exactly something that we need, something that will improve the structure of our economy and may provide protection during the future downturns,” said Dmitry Medvedev, the president of Russia, at the press conference.

At this time no actual deals were announced, as a result it is hard to say whether Sistema or other high-tech financial institution is interested in buying a stake in Qimonda and at what terms.

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http://en.rian.ru/business/20080530/108889933.html

Russia says foreign investment in Russia reaches $220 bln

14:58 30/05/2008

MOSCOW, May 30 (RIA Novosti) - Accumulated foreign investment in Russia has exceeded $220 billion, a Russian deputy prime minister said at an international economic conference in Moscow on Friday.

"We expect more foreign investors to come to Russia. So far accumulated foreign investment has exceeded $220 billion," Alexander Zhukov said.

Transport, mineral production, power generation, the social sector and the real estate market have been the major areas for investment, Zhukov said.

The official acknowledged that a lack of protection for intellectual property rights has hampered investment in Russian companies.

He also said investment in infrastructure development in Russia was expected to top $1 trillion by 2020.

"We expect investment in the construction of roads, railroads and airports will exceed $1 trillion," Zhukov said, describing the sums as "huge."

He also said proposals for implementing large-scale projects in infrastructure development were included in a long-term socio-economic development plan up to 2020 which is due to be approved by the end of this summer.

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http://www.cnbc.com/id/41658829

MOSCOW, Feb 18 (Reuters) - NLMK: * NLMK (LSE: NLMK) has approved the construction of a pelletizing plant at stoilensky with a capacity of 6 million tonnes of iron ore pellets per year. * Investments into Stoilensky's operating and infrastructure facilities over 2011-2014 will total some 39 billion roubles * During the Stoilensky's pellet plant construction, supplies of iron ore pellets to Novolipetsk will be made under long-term contracts between NLMK and Metalloinvest Holding * The project will be jointly executed with Siemens VAI/Outotec, a German-Finnish consortium, responsible for supplying the required equipment and technologies, as well as rendering other construction-related services (Moscow Newsroom, + 7 495 775 12 42, moscow.newsroom@reuters.com) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

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http://www.bmwi.de/English/Navigation/Press/press-releases,did=361492.html

Press Release 2010-9-24

28th session of the German-Russian Strategic Working Group on Economic and Financial Affairs

The 28th session of the German-Russian Strategic Working Group on Economic and Financial Affairs (SWG) took place today in Nizhny Novgorod, a Russian major economic centre on the mid-Volga.

The Working Group was headed by Dr. Bernd Pfaffenbach, State Secretary at the Federal Ministry of Economics and Technology, and Andrey Slepnev, Deputy Economic Development Minister of the Russian Federation. It has been given a permanent mandate by the German Federal Chancellor and the President of the Russian Federation.

The SWG, as the main governing body for bilateral economic relations, gives active assistance to joint projects, discusses measures to improve the environment for bilateral economic cooperation and helps to shape the strategic prospects of German-Russian economic relations. Business representatives of both countries make a significant contribution here. Thus Prof. Dr. Klaus Mangold, Head of the Committee on Eastern European Economic Relations, and Mr. Gert-Michael Raabe, Head of the East and Central Europe Association (OMV), took part in the session. Russian business was represented by Mr. Alexey Mordashov, Vice-President of the Russian Union of Industrialists and Entrepreneurs (RSPP).

Today's session concentrated on finding new ways for Germany and Russia to give a fresh impetus to their economic cooperation, in particular to cooperation in future-oriented industries.

State Secretary Dr. Pfaffenbach said: "I am confident that our countries will overcome the economic crisis and that the exchange of goods between Germany and Russia and our overall economic cooperation are going to develop dynamically again."

Apart from infrastructure development, particular interest is focused on energy efficiency, the health care industry, information and telecommunications technology.

In order to create an appropriate environment, the removal of  barriers to trade and the promotion of small and medium-sized enterprises headed the agenda of the SWG. This will help to release the potential of

highly innovative German medium-sized companies engaging in plans to modernize the Russian economy.

After a difficult year in 2009 business transactions between Germany and Russia have revived considerably in 2010. The volume of bilateral foreign trade in the 1st half of 2010 was 29 % higher than for the same period last year.

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http://www.bmwi.de/English/Navigation/Press/press-releases,did=353050.html

Press Release 2010-7-15

Federal Minister Brüderle signs German-Russian declaration on co-operation in the energy efficiency sector

Within the framework of the 12th German-Russian Intergovernmental Consultations in Yekaterinburg, Federal Minister of Economics and Technology Rainer Brüderle today co-chaired a Russian-German forum on energy efficiency together with Russian Energy Minister Sergei Shmatko. On this occasion, the ministers also signed a joint Russian-German declaration on intensified co-operation in the energy efficiency sector. The declaration contains a list of priority projects to enhance energy efficiency in Russia.

Minister Brüderle stated: "The joint Russian-German Declaration on co-operation in the energy efficiency sector represents another important step in the intensification of our co-operation with Russia in the field of energy. The concrete projects outlined in the joint declaration will contribute to the advancement of energy-efficient modernisation processes in Russia with the help of German technology companies. Both sides can benefit tremendously from this collaboration."

There is great potential in Russia for increasing energy efficiency in buildings, in power grid infrastructure and in industry. According to the Russian government, Russia has set the target of achieving an energy savings level of roughly 40% by 2020 through the more efficient use of energy. Increased energy efficiency in Russia will enable Russia to boost its exports of oil and gas and thereby enhance Europe's security of supply. Furthermore, greater energy efficiency will make an important contribution to climate protection.

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http://yourbusinessinrussia.blogspot.com/2010/11/german-companies-in-russian-market.html

Monday, November 8, 2010

German Companies In The Russian Market The classic way to develop the Russian market by German firms is as follows: first sales through representatives or through their own trading partners. If these transactions are successful, German firms establish their representative offices in Russia, in order to serve customers better. 

German companies usually take a decision to invest or establish manufacturing only in a few years in the Russian market. 

German medium-sized businesses today are represented in Russia mainly in the production of food and construction materials in the construction industry. 

Among the advantages of the Russian market are: first of all, it is every year increasing purchasing power of the Russian population, which is evident from the impressive data on the growth of retail turnover. Revenues are growing three times faster than the supply of goods and services. The Russian economy is still unable to meet this growing demand. Second, continued economic growth leads to an increasing demand for investment goods. Since the degree of deterioration of Russian machinery and equipment is high, it should be updated. Therefore, almost half of Russian imports are machinery and equipment, one third of which is German production. And, last but not the least: political stability in Russia  is also an important argument for investment in Russian market. 

Among the most important and interesting projects can be called an assembly production of BMW Group in the Kaliningrad region, a joint venture with DaimlerChrysler to produce agricultural machinery, the project company Bayer for the production of rubber and construction of chemical factory in St. Petersburg , the construction of chemical plant for methanol production in Arkhangelsk with the participation of MAN Ferrostaal, as well as participation of BASF (through a subsidiary - the company Wintershall) in projects for exploration and production of oil and natural gas. Store network of wholesale and retail company Metro, the German retail branch Swedish company IKEA, as well as the company's AVA (Edeka), which begins building its own network of hypermarkets «Marktkauf". 

It is noteworthy that in recent years, the Germans began to invest actively in the information sphere, realizing that most effectively exploit the potential of Russian market of programming can not by inviting specialists to work in Germany, and the execution of orders directly to German companies in Russia and the creation of joint companies. Good examples of such cooperation could be joint projects in Zelenograd, St. Petersburg and Novosibirsk. Unfortunately, in absolute terms such investments remains slow. 

If we talk about regional cooperation German investors prefer regions with political stability, good economic potential, rich labor and natural resources, with a constructive attitude toward foreign investors and having access to transportation and other infrastructure. Therefore, the highest priority for the region of the Russian Center and the North-west. Considerable interest has been shown also to the Volga and Ural regions. 

In recent years, not only Moscow and St. Petersburg, but also other Russian regions are becoming more attractive for investments of German investors.  In other words, more than half the funds were sent to other Russian regions.

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BMW's Russia factory opens in Kaliningrad

Sun, 1999-10-24 13:00 — admin

Issue Number: 

35

Author: 

Sam Green Published: 

1999-10-25

KALININGRAD - German carmaker BMW opened its first Russian factory Friday in a city that earlier this century was the capital of German East Prussia.

The $69 million plant, intended to churn out 900 automobiles a year, actually began limited production in August but was officially opened last week in this sliver of Baltic Russia stranded between Poland and Lithuania.

"For BMW, the opening of this new venture in Kaliningrad is not simply the beginning of production of BMW and Land Rover automobiles in Russia," Heinrich Heitmann, one of BMW's managers, said.

"This event is a witness of our belief in the future of Russia. With our work, we are setting an example for other investors and are showing how it is possible to achieve success quickly in this country."

However, in picking a location almost not in "this country," BMW assured itself a slew of benefits. Kaliningrad and the surrounding region constitute a "special economic zone," in which manufacturers pay few or no duties and taxes -- and can more easily transfer profits abroad.

"The choice of the Kaliningrad site was not due solely to the prospect," said Luder Paysen, BMW's regional director of sales. "The region is located in one of the only special economic zones guaranteed by Russian law and therefore offers substantial and clear benefits."

It took BMW and its local partner, Avtotor, only seven months to get the plant ready for production. In the process, they shipped in virtually all the assembly line's parts and brought in engineers and experts to make sure the facility runs smoothly. With such a short deadline, some thought they would never make it.

"This April, when we'd just signed the cooperation agreement with BMW, many didn't believe our joint project could be realized, and especially not this quickly," Avtotor Chairman Vladimir Shcherbakov said. "I'm happy all the pessimistic forecasts for our program didn't come true."

The plant will produce a total of about 900 BMW 523i and 528i models and Land Rover Defenders, but has capacity for more than 10,000, officials said.

The three models are the company's best sellers in Russia. A total of 4,500 were sold in Russia over the past five years. Of the cars produced at the plant, all are intended for sale in Russia. One hundred of them will be bought by the Russian government, Paysen said.

The plant will open with 300 employees. It is intended to grow to 500 in the near term, officials said.

The territory of Kaliningrad was known until the end of World War II as East Prussia, and its capital was Koenigsberg - also the birthplace of the famous philosopher, Immanuel Kant.

Following the defeat of Nazi Germany, it was renamed Kaliningrad and as an important Soviet naval base. It remained a closed region until the fall of the Soviet Union.

Business

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