Foreign companies on the construction market of Russia: Review of Russian media from 05.02.2016 to 16.02.2016

Foreign companies on the construction market of Russia: Review of Russian media from 05.02.2016 to 16.02.2016
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Construction of the Moscow-Kazan high-speed railway is attracting the attention of foreign partners. Besides the Chinese investors, Siemens is now participating in the project as well.

Siemens has confirmed its intention to invest €2 bln in the Moscow-Kazan high-speed railway

On February12th, the RBC agency has confirmed its intention to invest 2 bln euros in the Moscow-Kazan high-speed railway. This is what the president of Siemens Russia and Central Asia, Dietrich Möller, said at a meeting with the head of Russian Railways (RZD), Oleg Belozerov, which took place on February 11th.

“The amount of €2 bln is fixed. We are working actively. We know that the Chinese party is working as well – I hope that, on a trilateral basis, this issue can be solved, since for such megaproject it’s necessary that not just Russia and China make an effort, but the other partners as well”, explained Mr Möller.

At the same time, the Siemens representative acknowledged a certain risk in the investment, in connection with the rouble’s volatility. To remind you, this 770-km-long high-speed railway will pass through 7 regions of Russia.


Chinese business on the Russian construction market

As “Komsomolskaya Pravda” reported on February 5th, a Chinese investor is considering participating in the construction of a new bridge worth 40 bln roubles, which will connect the cities of Saratov and Engels. The plans of the investor from China have been discussed by the Minister for Transport and Road Facilities of the Saratov Region, Nikolay Churikov. “Such objects are being built within the framework of public-private partnerships, and both the region and the investor should participate in their implementation. If the investors are content, at the end of 2016 we are planning to file an application for the implementation of this project”, he said.

On February 13th, RuNews reported that in 2016 the construction of a dairy product farm would be launched near Tomsk. The project’s cost is 1 bln roubles, allotted by a Chinese investor. According to the region’s deputy governor for agricultural policy, Andrey Knorr, the Chinese-Russian company will build a farm in the neighborhood of Tomsk, in place of an already existing enterprise which will be reconstructed.

On February 11th, Ufa Time talked about the plans of the Chinese OWS enterprise, specializing in construction of modern greenhouse complexes, to invest $30 mln into Bashkiria. This project has already been endorsed by the Bashkir government.

“We are planning to buy and rent a ground plot in order to build a plant producing greenhouse complexes… I’m going to bring to the Republic not only equipment but modern technologies as well, which will boost agriculture”, explained the OWS director general, Tyan Xingang.

On February12th,  Interfax Real Estate reported that a Chinese company, which is conducting reconstruction of the “Druzhba” trade center in Novoslobodskaya Street in Moscow, will have completed its work within a period of 12 months. According to the president of the Moscow Committee for Investment and Construction (Moscomstroyinvest), Konstantin Tomofeev, the Chinese branch of the Center for Development and Investments Management in Europe is already finishing the preparation of initial permit documentation and will start on the reconstruction this year. The area will expand from the current 16,690 m2 to 18,838 m2 by means of a lounge area, a fast food outlet and a sanitary medical complex in the building.  

Nezavisimaya Gazeta, in an article on February 10th entitled “Russia’s Switch to the East Has Not Occurred For a Year”, said that the total volume of direct investment from China abroad has continued to rise 2015 would amount to $118 bln. At the same time, the volume of Chinese investment in the Russian economy is dropping: by the results of 2016, the figure might total $6 bln, less than in 2014.

The reason is macroeconomic instability in Russia, and it is why Chinese businessmen have rejected a number of noteworthy projects. For example, at the beginning of the year the Chinese interrupted negotiations with Moscow authorities on the investment of $6 bln in the construction of a new metro line and some real estate in this region. The prospects for the ambitious construction project on the “Power of Siberia” pipeline remain unclear, indicates the website.


Kazakhstan will replace Finland on the concrete panels market in Saint Petersburg

On February11th, reported that Kazakh investors acquired the enterprise, which produces concrete panels in Saint Petersburg. Before that, it had belonged to the Finish Betset company. The transaction was for an estimated 1 bln roubles.

“In these times of crisis, the construction market in Saint Petersburg has shrunk twofold. Developer’s orders are down proportionally”, commented the Betset director general, Yussy Urpula. At the same time, as the website pointed out, the trend for active substitution of the European investors for companies from the Customs Union countries is in evidence on the Saint Petersburg market. indicated as a key reason for this a complicated economic situation in Russia and a coolness in political relationship with Western countries.

The Kazakh investors, who have bought out the Betset factory, have already announced their plans. This is the construction of housing in Saint Petersburg, the export of concrete panels to Northern Europe and the construction of two panel plants using Finnish technology.

Foreigners participate in plant construction throughout Russia

On February12th, Kommersant, in an article entitled “A Pig Shower Outside The Window”, talked about the prospects of a threefold increase in pork production in the Nizhny Novgorod region due to the involvement of a Norwegian business. The Nizhny Novgorod regional governor, Valery Shantsev, and the general director of NNPP Plc — the Russian subsidiary of the Norwegian RBPI company — Thomas Norgaard, have signed an agreement on the construction of two pig-breeding complexes in the Bolshemurashkinsky district.   

Investment in the first enterprise amounted to 2.5 bln roubles, and 3 bln roubles will be allotted for the second one. Construction will start in summer 2016 and the complexes will be put into operation in 2017. The company is planning to market its produce in the Nizhny Novgorod region. According to estimates from the RF Ministry of Agriculture, in this way will the region’s demands for pork be met.

On February 11th, the TASS agency reported that specialists from Tokyo, jointly with their Russian colleagues, have been developing a construction project in Moscow for a large plant for rubbish recycling and incineration. The object is expected to be put into operation by 2019. Japanese specialists have started their work on the basis of an agreement reached last year in the course of Moscow Mayor Sergey Sobyanin’s visit to Tokyo.

On February11th, RIA Novosti talked about the plans of Brazilian businessmen from Prana State to build large meat-producing complexes in a number of Russian regions, including Crimea.

“Both Russian and Brazilian businessmen are gradually becoming aware of the fact that the agricultural trade has its limits. The real projects for such construction are emerging now”, said the Russian ambassador to Brazil, Sergey Okopov. According to him, Brazil, as the world’s major producer and supplier of agricultural products, has accumulated huge experience in this field, as well as advanced technologies and scientific research.

At the same time, on February 8th , the Moskovsky Komsomolets wrote that the authorities of the Chelyabynsk Region have deflated the rumours about the construction by Roshen Confectionery, which belongs to Ukrainian President Petr Poroshenko, on the region’s territory.

As Minister for Agriculture Sergey Sushkov put it, the department didn’t use the data, and reminded readers about the Russian sanctions program. Earlier, the writer Alexander Prokhanov published online information about construction projects from Roshen Confectioneries allegedly being implemented in the Chelyabinsk and Kaluga regions. This message has provoked a negative reaction from many Internet users.

The French “Leroy Merlin” is going to open a hypermarket for construction materials in one more city in Russia. This is what the Delovoy Saratov web portal announced on February15th. As the Saratov press office noted, the company has already got a permit to build on the 2-hectare area where the hypermarket itself, with an area of 16,500 m², a parking lot and a utility space will be located.

“Leroy Merlin” opened its first hypermarket on the territory of Russia in 2004 in Mytishchi. Later, similar malls appeared in 18 more cities.


Review prepared by Tatyana KANUNNIKOVA