- Enormous Russian demand for plant and machinery
- Partner Country unaffected by euro crisis
- As leading natural gas supplier, Russia has pivotal role to play in transition to alternative energy sources
The Russian Federation has been named the upcoming Partner Country for HANNOVER MESSE 2013. This was announced on Thursday by Deutsche Messe and the Russian Federation’s Ministry of Industry and Trade. Both parties expressed their conviction that Russia’s participation as the Partner Country for HANNOVER MESSE 2013 in Germany would offer important opportunities to intensify bilateral business and trade relations.
Dr. Jochen Köckler, Member of the Managing Board of Deutsche Messe AG, commented: “Russia is the ideal Partner Country for HANNOVER MESSE 2013. The economic ties between Germany and Russia will continue to intensify and the potential for investment in the Russian market will exude a strong appeal to exhibitors and trade visitors.”
The Russian Government regards HANNOVER MESSE as one of the most representative events worldwide with regard to industrial as well as scientific and technical innovation. The Russian Federation’s Minister of Industry and Trade, Denis Manturov, stated: “I am convinced Russia’s participation as the Partner Country at HANNOVER MESSE 2013 will provide a strong boost to Russian-German relations.”
According to a survey by the Russian-German Chamber of Foreign Trade, German enterprises are planning to invest almost one billion euros in the Russian market over the course of 2012. More than one half of all German companies operating in the Russian market do not expect the euro crisis to have an impact on their business performance. The survey indicates trade with Russia might even compensate for losses incurred in the EU area. According to the Chamber, the positive economic trend in Russia has led to a rise in exports in the first five months of 2012.
“Following the crisis in 2008, numerous European enterprises are showing a greater level of interest in the Russian market. This is due, firstly, to the relative proximity of Russia and, secondly, to the long-term attractiveness of Russia as a customer for capital goods intended for the modernization of the domestic economy,” Jochen Köckler explains.
The Partner Country for HANNOVER MESSE 2013 is already playing a key role in the transition to alternative energy sources. Russia is Europe’s largest supplier of natural gas, currently covering approximately one quarter of total demand. According to a study by the energy company ExxonMobil, natural gas will become the single most important energy source within the next two decades. As from 2030, gas will supersede oil as the predominant energy source and thus contribute decisively to the transition to alternative energy. At present one third of all gas imports come from Russia. The country has the world’s largest natural gas reserves, accounting for one quarter of all proven recoverable reserves.
Russia’s political leadership however is not relying solely on the energy sector. A number of top sporting events in the period leading up to 2018 (for example Formula One, the Olympic Games and the FIFA World Cup) will create new opportunities. The same applies to high-priority state investment programs in the areas of agriculture, housing and infrastructure development. For example, in the period up to 2014, the state-owned Russian Railways are planning to invest around €27 billion. The economic development of the Far Eastern Federal District will receive government funding amounting to approx. €24 billion in the period up to 2013. President Vladimir Putin recently announced the creation of 25 million new skilled jobs. This will open up new opportunities — for major European conglomerates, as well as for small and medium-sized enterprises in Germany. The structure of the companies operating in Russia is similar to that found in Western Europe: 90 percent are small and medium-sized enterprises, which successfully market highly specialized products.
Russia's accession to the World Trade Organization is expected to unleash an enormous potential. Following the decision to join the WTO (taken at the end of 2011) and the outcome of the presidential elections, there is now greater clarity about Russia’s future economic policy. Thanks to its high raw materials revenues, Russia offers excellent sales opportunities for European exporters. Road vehicles, machinery and electrical engineering products are in high demand. The gradual opening of the domestic market in the wake of WTO accession will make it easier for foreign companies to carve out a position in Russia.
Following the signing of the WTO accession protocol by the Russian Federation at the end of 2011 and the completion of the ratification process by June 2012, new perspectives have emerged for Russia and its trading partners. On the one hand, customs tariffs and valuation codes will become more predictable. Spontaneous tariff increases to protect the domestic economy (as seen recently in the case of agricultural machinery) will no longer be possible. On the other hand, there is an enormous demand for plant and machinery in Russia. Following the downturn in investment in 2009, the country has now embarked on a massive program of infrastructure development.
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Source: HANNOVER MESSE