Russian Markets Review Issue 03, June 2013
State reserves to be invested in the infrastructure
The President of Russia announced the budget address which determines the main public finance priorities for the period 2014-2016. The address includes plans to invest state reserves in returnable infrastructure projects run on public-private partnership. During the St. Petersburg International Economic Forum the President also noted that $15blnof the national welfare fund will be invested in three key projects, including the high-speed railway from Moscow to Kazan.
Source: President of Russia website, Vedomosti
Customs Union establishes joint logistics company
National railroad companies of Russia, Belarus and Kazakhstan have signed an agreement on establishing a joint logistics company to engage in container shipment within the Customs Union and to the neighboring territories. One of the main business projects of the Union is expected to secure over 4 mln TEU of freight traffic by 2020. The cumulative effecton the three countries’ GDP is estimated at $11 bln.
Steel industry news
1 mmt billet plant to be constructed
Russia's Koks Group considersseveral contractors for the construction of a 1mmt/year steel plant to be commissioned within three years at its Tulachermet pig iron plant. Initially output would consist of 500,000 mt of billets and another half-million tonnes of rolled long products.
Several more steel plant projects are expected to be completed by the end of 2013, including those of TMK, Severstal and UGMK with total steel capacity of 2.5 mty.
Source: Platts, Koks Group, company information
Steel using sectors
Another John Deere Plant
One of the world’s largest manufacturers of agriculturalmachinery John Deere opened its second plan in Orenburg, Russia (South Urals). The investments totaled $30 mln and the plant is to secure around 600 jobs. The firstJohn Deereplantin Orenburg was opened in 2005 and has already produced over 2.2 mln ofmachines.
Gas projects expanding
Vnesheconombank, gas company Novotek and maritime shipping companySovkomflot signed a contract on building two LNG carriers for Novotek’s LNGplant project in the Yamal Peninsula (West Siberia)by 2016. The plant’s capacity is 15 mty of LNG. According to the Ministry of Energy Russia’s LNG export will reach around 15% of production by 2020.