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Technology Newsletter, December 2013
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Technology Club Newsletter, December 2013 Dear Technology Club Members, Welcome to this Christmas' edition of the Technlogy Club newsletter. One year has passed with many exciting and successful events for the Technology Club. In this edition you will find information on the latest news on the technology sector. You get in depth articles, updates on future events and much more. This edition will also provide an overview of what has happened since the last edition. For example the Road Consortium has recently held a very succesfull Road Show to different regions of Russia. Furthermore 3 Danish companies participated in the 13th International Exhibition of Equipment and Technologies for the Woodworking Industries, Woodex, that was held near Moscow November 26 to 29, 2013. The latest news on technology is covered in depth on the later pages of the issue. We look forward to welcome you to the new year with the first edition of the Technology Club Newsletter in March 2014.
Enjoy your reading! ______________________ Дорогие члены Клуба Технологий, Мы рады представить Вам рождественский выпуск новостного письма Клуба Технологий. Прошел год со многими интересными и успешными событиями для клуба технологии В этом выпуске Вы сможете найти информацию о последних новостях технологического сектора. Вас ждут множество интересных статей, обзор предстоящих событий и многое другое. В этом новостном письме мы расскажем, что произошло с момента последнего его выпуска. Например, Дорожный Консоциум провел серию выездных презентаций в разных регионах России. Кроме того три датские компании приняли участие в XIII Международной Выставке Оборудования и Технологий для Лесоперерабатывающей Промышленности, Woodex, которая проходила в Москве с 26 по 29 ноября 2013 года. Подробности о последних технологических новинках Вы также найдете на страницах новостного письма. Мы с большим удовольствием поприветствуем Вас в Новом году с первым мартовским выпуском новостного письма клуба технологии Приятного чтения!
Newsletter Content What happened since last time - The Minister for Environment of Denmark, Ida Auken Visited St. Petersburg - Russia: Miles of untapped potential - Succesfull Road Show for the Danish-Russian Road Consortium: Danish road construction and maintenance companies to Kazan, Irkutsk and Moscow - The Trade Council Russia presents the first joint Danish Stand at Woodex 2013 - Sberbank Russia opens op for future cooperation with Danish companies - Uralmash OMZ Group has a big interest for the ‘Low Hanging Fruits’ projects - Future cooperation between the Consulate General and UNIDO - Visit to Tyumen and Chelyabinsk: Catched the Attention of the Russian Media – No More Money out the Window! Upcoming Events 2014 - Interested in the Russian airport market? - Continueing the success: Road Show 2014 - AutoInvest 2014 International Conference on Investment Attraction to Automotive Component Industry - Conference on Russian Wood and Timber - UMIDS 2014, the 16th International Furniture and Woodworking Exhibition - Trade Council Russia and Moscow's Cultural Minister Plans Study Trip to Denmark on Park Development
Sector News Infrastructure - Vladimir Putin: expand investments in the Russian Infrastructure - New Trains for the Sochi Games in Russia - Russian Railways invests $18.7 billion in Far East Aviation and Airports - Continuing growth in the Russian Aviation Industry and a lack of technology leaves room for foreign companies - Moscow Region plans to develop a fourth airport - From 2013 onwards, regional airports in Russia will be the priority area for capital investment Wood and Timber - Russian timber sector – new lease of life
Articles -Russian Consumers Demand for Environmentally Friendly Packaging Increases - Initiation of Energy-Efficiency Labels: New Opportunities for Danish Companies in Russia - Russian innovation leaves room for Danish technology - Composite materials pave a path to success
What has Happened since the
last Newsletter?
The Minister for Environment of Denmark, Ida Auken Visited St. Petersburg On September 19 and 20, 2013, the Danish Minister for Environment Mrs. Ida Auken visited St. Petersburg. Her visit was established in order to increase the focus on water and wastewater management and the opportunities of cooperation between Denmark and Danish companies and the city of St. Petersburg and Russian companies. During her stay several protocols and business agreements were signed. Visit to the Administration of Leningrad Oblast: The Danish Minister for the Environment Mrs. Ida Auken signs a Protocol with the Governor of Leningrad Oblast A.Y. Drozdenko and the Vice-Governor of St. Petersburg Administration M. P. Mokretsov On thursday September 19 the Danish Minister signed two protocols. The first was with the governor of Leningrad oblast A.Y. Drozdenko and a second with Vice-Governor M. P. Mokretsov. The two agreements are intended as a framework for environmental cooperation between St. Petersburg, Leningrad and the Ministry for Environment of Denmark, with focus on six priority areas: impact of climate change on urban economy, air quality in cities, water supply and discharge systems, resource-savings, waste management and waste minimization. To resolve these environmental challenges in Denmark and Russia Mrs. Auken pointed out how crucial it is to involve enterprises and organizations in the greening of the economy. Roundtable discussion between Danish and Russian companies on water and wastewater treatment in Vodokanal st. Petersburg During the day several Danish and Russian companies within the water and wastewater management sector had a roundtable discussion and presentation of their new products and initiatives. Denmark was represented by Grundfos, Danfoss, Per Aarsleff, J. Hvidtved Larsen, COWI, Carlsberg Group, UNIDO and Vand Center Syd. Mrs. Ida Auken addressed the companies and encouraged a continuation of the fruitful cooperation between Denmark and Russia; “Tomorrow’s improvements in the water sector can only take place if we today establish a strong and
fruitful cooperation between the public and the private sector. Therefore I am happy to see that so many private companies are present here today”
If you wish to read the whole artcle, please follow this link
Protocol following the results of negotiation on coorperation beween the Danish Minister for Environment Mrs. Ida Auken and the Vice-Governor of St. Petersburg Mr. Mikhail Mokretsov
See the protocol here
Protocol following the results of negotiation on coorperation beween the Danish Minister for Environment Mrs. Ida Auken and the Governor of Leningrad region Mr. Alexander Drozdenko
See the protocol here
Russia: Miles of untapped potential It is no secret that the roads in Russia are generally in a very poor condition and the vast majority of the renovation/maintenance of infrastructure takes place in Moscow and St. Petersburg. In this context the Russian government have agreed to allocate DKK 2,2 trillion to a federal implementation project. All this is clearly closely linked to the fact that Russia will host the Winter Olympics in Sochi in 2014 and host the football championships, World Cup in 2018. The Russian investment in the road network opens up great business opportunities for Danish companies in this sector. Seize the opportunities in the Russian market: The Danish - Russian Road Consortium The Danish Consulate General in St. Petersburg views these circumstances as a great opportunity to focus upon that particular market. The consulate has therefore created the Danish - Russian Road Consortium to strengthen Danish companies' presence in the infrastructural Russian market. This approach resulted among other things in a 'Road Trip' to Moscow, Kazan and Irkutsk in October (2013) along with 4 Danish companies from the Danish road sector (see article below).
Sector Expert in Technology and Machinery, Marina Piotrovskaya, denotes the event as an unquestionable success. The Danish companies created solid and concrete trade opportunities in the Russian market. She says the following about these opportunities: "Danish companies are very specialized and quality focused within specific areas of maintenance and modernization of the road network, such as machines for pavement and painting of stripes as well as salt spreaders and snowploughs - this is a property that the Russian market highly regards and it opens up the market further for Danish companies' expertise and input." We, at the Consulate General in St. Petersburg will continue to monitor this market closely, because there is a great potential for Danish companies here. We have already planned to continue our road show in 2014, and thus focus on the opportunities within the regions that offer significant infrastructural projects. If you want to know more about the opportunities in the Russian road market, please contact Marina Piotrovskaya on [email protected]
Succesfull Road Show for the Danish-Russian Road Consortium: Danish road construction and maintenance companies to Kazan, Irkutsk and Moscow On 7 – 12 October, a group of Danish companies, visited three cities of the Russian Federation (Moscow, Kazan and Irkutsk) and had a number of meetings with representatives of local authorities and business organisations. Participating companies (Borum A/S, Epoke A/S, Dynatest A/S and LKF Vejmarkering A/S) combined their efforts within Strategic Alliance Project supported by the Danish Ministry of the Foreign Affairs. These Danish companies are already known in Russia and have already proven to be leaders in their relevant sectors in other parts of the world. The Russian Federation is a very important market for them and there is an obvious need for new approaches and technical decisions for improvement of roads quality and road safety in Russia. In Kazan the Delegation took part at the IV International exhibition DorTransExpo. Together with the Prime-Minister of Tatarstan Republic, Mr. Ildar Khalikov and the Minister of Transport of Tatarstan
republic, Mr. Lenar Safin, Peter Mygind Rasmussen participated in the official opening of the Exhibition. Within the framework of the Exhibition the Ministry of Transport of Tatarstan Republic arranged a round table “Innovative road” where advanced Danish technologies and technical solutions from participating companies were presented and discussed. In total 66 companies and organisations from 10 different cities of Russia participated in DorTransExpo this year. In Irkutsk Danish companies and their Russian partners hold a technical seminar for members of Association of the road sector companies of Irkutsk region and also participated in meetings with Irkutsk City Administration and Irkutsk Region Ministry of Transport. We were lucky not only to discuss business cooperation and possibilities for future projects in the regions but also to get a bit of local culture and even first snow in Siberia followed by a spectacular firework right before our departure! The meetings will be followed up very shortly and we hope that the project will pave a road to Danish companies’ success in the Russian Federation.
The Trade Council Russia presents the first joint Danish Stand at Woodex 2013 Woodex 2013 in Moscow is the 13th international exhibition of equipment and technologies for the woodworking industry. The exhibition is well known in the industry as an important information and communication platform to establish new business contacts, to maintain existing ones, to promote the development of cooperation and sharing know-how.
This year’s exhibition took place on November 26-29, where more than 400 exhibitors from 29 countries participated in the event held in the 1st pavilion of Crocus Expo, in Moscow. The official opening ceremony took place November 26 at 12 p.m. at the stage in the lobby of the exhibition pavilion. Here Niels-Erik Lundvig the chairman of the Association of Danish Manufacturers of Machines for the Wood Industry, SMT, officially welcomed and opened the exhibition, along with colleagues from other countries associations. Many of the exhibitors and associations have attended the event several times and Niels-Erik Lundvig expressed his gratitude for the event on behalf of the wood industry in Denmark. The Trade Council Russia has this year gathered the three companies Danlist A/S, C.F. Nielsen A/S and Opel-P Group A/S plus the association SMT to establish the first joint Danish stand on Woodex. At the Danish stand the companies exhibited their products which was all from manual notch cutting machines, briquettes and briquetting solutions to turnkey customized production solutions shown on 42” B&O TV’s. The Danish companies complemented each other well and the joint stand was a great representative to promote Danish wood working industry as a whole. The Danish stand created a lot of attention with the physical presence of different types of notch cutting machines for the wood framing industry as well as with physical pellets and briquettes to show companies how they can transform wood waste into value. Combined with the visual film presentations of larger solutions the Danish stand had a great start to Woodex 2013. On the evening of the opening day, November 26, the Danish national stand was invited to a reception at the Danish Embassy in Moscow along with their established and new business contacts. At the reception the Danish Ambassador in the Russian Federation Mr. Thomas Winkler addressed the participant and wished them a good time in Moscow and a successful exhibition at Woodex. Woodex Moscow is the largest specialized trade fair introducing the leading international manufacturers of timber and woodworking equipment. The latest products, trends, developments and services in the areas of woodworking, pulp production, forest management is presented to an expert audience in several, creatively designed booths. In addition to the exhibition there are also interesting presentations in a pleasant atmosphere that perfectly complement the exhibition. For 15 years Woodex Moscow has been the leading woodworking forum in Russia attracting more participants and visitors every year.
For more information visit www.woodexpo.ru
Sberbank Russia opens op for future cooperation with Danish companies Sberbank Russia has expressed huge interest in establishing cooperation with technological innovative Danish companies to produce products and establish projects that can compete within the Russian market.
Cooperation with the largest bank of Russia and Eastern Europe will clearly create new possibilities for Danish companies within the Russian market. During a meeting between the Consulate General and Sberbank, Sberbank showed a great interest for the Danish business of energy efficiency, an area with huge possibilities in the Russian society. Energy efficiency in the heating sector - A number of possible collaborations in the field of energy efficiency in municipality services, focusing the attention on heat production, transmission and consuming, including hot water was discussed between the Consulate General and Sberbank. Denmark has a long-standing tradition of energy efficient production of heat which the Russian society clearly could benefit from. The representatives on both sides expressed interest for municipality heat projects in the regions of north-west Siberia, Ural and Khanty-Mansi Autonomous Okrug. Energy efficiency projects in the industrial sector – Sberbank Russia is also interested in including Danish investors and technical consultants in the identification of projects within the huge industrial sector of Russia. In search for more energy efficient ways of production the bank is interested in including Danish expertise within the areas of energy efficiency in all stages of production. Compared to Russia Denmark is but a snowflake against an iceberg, but even though we can’t compete in size the interest for including Danish companies in the projects of the largest bank in Russia clearly shows, that when it comes to energy efficiency, Danish technology and know-how can compete on all markets. The projects that might emerge from this cooperation will create huge opportunities for Danish companies on the Russian market of energy efficiency. The projects that will emerge during these negotiations with Sberbank will be a part of the Trade Council Russia’s Low Hanging Fruits Projects, which will be published in a new Low Hanging Fruits Reference book in April 2014.
Uralmash OMZ Group has a big interest for the ‘Low Hanging Fruits’ projects OMZ Group is one of Russia's largest heavy engineering companies, with diversified activities in the business areas such as: Equipment for the nuclear power industry, engineering and equipment for the oil and gas industry, production of special steels and mining equipment. Uralmash OMZ Group has expressed a keen interest in the Energy and Environments club’s Low Hanging Fruits projects, which was recently published in the new Reference Book 2013. Due to the high degree of innovative energy efficient and green Danish technologies they have an interest in sharing technological information and know-how by utilizing Danish mechanisms on the Russian market. The purpose of the Low Hanging Fruits projects is to keep the process simple. The focus is on smaller projects with a maximum payback period of 5 years. Uralmash OMZ Group is interested in being a part of these green investments. Due to the nature of the group the financial aspects are not a point of focus – the main interest is for partnerships with advanced technology to produce products that can compete in the field of green technology in Russia. Uralmash OMZ Group has offered the opportunity for the members and possible partners from the Technology Club to visit one of their main production locations one hour drive from Moscow – Cryogenmash. Cryogenmash is the largest company in Russia engaged in production of air separation technologies and equipment, supply of technical gases and development of comprehensive decisions on processing a casing-head gas, natural gas and liquefied natural gas. Furthermore Uralmash OMZ Group is very interested in going to Denmark to meet with possible partners and visit their respective production facilities to get the full understanding of the technology of the partner. Uralmash OMZ Group is a strong participant within the Russian market and a partnership will increase the strength of Danish technology within the field of green technology in Russia. The Energy and Environment Club will follow up on the above mentioned opportunities and if you are interested in knowing more about the possible partnership with Uralmash OMZ Group please do not hesitate to contact Marina Piotrovskaya on [email protected].
Future cooperation between the Consulate General and UNIDO UNIDO's mission is as cited from their webpage; Growth with Quality. The main purpose is to establish growth, but growth that is environmentally sustainable. Danish companies match this description perfectly due to their huge tradition in creating a green industry and environmentally sustainable solutions. UNIDO has shown an interest in investigating the possibility of cooperation between Danish companies and UNIDO in the area of energy-efficiency. The cooperation with UNIDO can create many business possibilities for Danish companies. UNIDO’s focus on growth and quality makes Danish companies a good match on the Russian market of energy efficiency. Director of UNIDO’s Center for International Cooperation, Sergey Korotkov explains: "(…) our idea is to attract Danish companies to our energy-efficiency projects here in Russia. For us it’s very interesting to be linked with some of these investments, which would be linked to Denmark, because Danish equipment is considered to be one of the best" UNIDO has different projects all over Russia and cooperates with about 40 Russian companies – with most of them located at Tartarstan. The priority for the Danish Consulate General is to facilitate Danish companies’ presence on the Russian market for energy efficient technology. Through the ‘Low Hanging Fruits’ projects the Consulate General is showing how short-term green investment projects can be implemented into the Russian structure of production. The future projects between UNIDO and Danish companies will be included in the next edition of the ‘Low Hanging Fruits Reference Book’ which will be available in 2014. The future cooperation between UNIDO and Danish companies in Tartarstan can be seen as a concrete result of the declaration of intend that was signed between the Danish Minister for Environment, Mrs. Ida Auken, Baltika and UNIDO during the Ministers visit on September 20, 2013.
Visit to Tyumen and Chelyabinsk: Catched the Attention of the Russian Media – No More Money out the Window! November 11 to 15 the Danish Consulate General in St. Petersburg, in cooperation with the Danish Board of District Heating (DBDH), arranged and participated in the District Heating Sector Visit to the regions of Tyumen and Chelyabinsk, together with several Danish companies. The aim for the Danish delegation was to share and discuss experiences on energy efficiency and introduce the concept of “Low Hanging Fruits”. The task of the latter was to show the Russian public services and industry, specific ways to implement energy efficient technology through projects with a short payback period. The presentation of the “Low Hanging Fruits” took place at the round table meeting focused on: "Increasing energy efficiency of enterprises, housing and communal services of Tyumen region“. The visit to Tyumen caught the eyes of the Russian media and showed just how ripe the Russian public as well as the official Russia is to implement energy efficient technology into their vast production apparatus. Tyumen service utilities are currently at a very bad condition. The chain of losses is simply depressing – to the consumer comes in the best case 37.5 % of the produced heat! One tenth of the heat is lost during production, 4% during transportation. Another 11.5% during distribution and 10% for regulating the inside buildings. Finally - the greatest loss - 27% - is due to open doors and windows. In other words – Money out the window! Forecasts of economists is not comforting, if Tyumen will continue to be careless about saving resources, by 2017 they will have to pay for heat 5 times more than the inhabitants of the Scandinavian countries. A task that the Danish companies GMF, Desmi, Grundfos, Logstor, Danfoss, Salling Plast and Aalborg Engineering participating in the visit are eager to change. A financial advisor from the Danish Export Credit Fund particpated also in the sector visit. During the visit the Danish delegation participated in round table meetings with the Finnish energy company Fortum, which is the leading energy company in the regions of Tyumen and Chelyabinsk.
Below you can see selected articles (in Russian) as well as a video (in Russian) from the Russian media about the sector visit to Tyumen.
Article from Newsprom.ru
Link to article
Article from UralPolit
Link to article
Video from Vesti
Link to video
Upcoming Events in 2014
Interested in the Russian Airport Industry? Are you interested in knowing more about the Russian airport industry and the possibilities in this expanding market? In the spring 2014 a seminar for Danish companies interested in entering or expanding their activities n the Russian airport market is held. Exact date and information will be given later. The aim of this seminar is to provide you with first-hand knowledge about the current stage of the Russian business climate within this sector and knowledge about the possibilities within this market. You will be presented with details about the state strategy for the air transportation and airport infrastructural development, specific plans on construction and reconstruction projects of more than 60 Russian airports and information about tender procedures and requirements to producers within this sector. Furthermore there will be rich possibility to discuss the strategy for joining efforts to strengthen the Danish profile and enhance the possibilities within the Russian market. Key participants in the seminar are the Federal Air Trasportation Agency (Rosaviacia) - the federal authority of executive power, providing state services and managing the state assets in the area of air transportation (civil aviation) and the Federal State Unitary Enterprise ”Administration of the civil Airports” (FSUE), an asset holder of the federal property of the aerodromes of federal significance. Furthermore the Institute for Industrial and Market Studies (IIMS), the Institute for Macroeconomic Research and Forecasting (IMRF) and the Institute of Transport from the Higher School of Economics will be participating.
INTERESTED? Register by sending an e-mail to Marina Piotrovskaya: [email protected]
Continueing the success: Road Show 2014 The Danish-Russian Road Consortium is following up on the very successful Road Show to Kazan, Irkutsk and Moscow in October 2013 with a new Road Show to the southern part of Russia in the spring of 2014. The second Road Show 2014 will, as the previous Road Show, consist of two parts. 1. Part: The Royal Danish Consulate General in St. Petersburg is planning, based on meetings held in Kazan and Moscow during the Road Show 2013, to invite representatives from Moscow oblast Main Directorate for the road sector, Mosavtodor and the Ministry of Investments and Innovations of Moscow oblast and the transport ministry in Tatarstan to Denmark. The program for this visit will include a meeting with the Danish Directorate for Roads, meeting with Danish consultants in traffic planning, and visits to the Danish companies participating in the event, so that they can show how their products, application methods and facilities work. 2. Part: The second part of the Road Show 2014 will consist of visits to three different regions in the southern part of Russia. During these visits your company will get a unique possibility to arrange B2B meetings with the largest Russian decision makers within the sector of road construction. Furthermore you will get direct access to the decision makers within the selected regions, get the possibility to present your technology and your products to several Russian commercial companies interested in developing international cooperation and targeted advertising campaign before the round trip where information letters and information about your company will be presented. The specific details and information about the Road Show 2014 will be presented later on. If you are interested in being part of this huge opportunity to enter or expanding your activity within the Russian market of road construction and maintenance please contact Marina Piotrovskaya on [email protected].
AutoInvest 2014: International Conference on Investment Attraction to Automotive Component Industry
The VIII Annual International Conference on Investment Attraction to Automotive Component Industry is held February 19-21, 2014, at Crowne Plaza by St. Petersburg Airport. During seven years the Conference have gathered professionals and experts of automotive manufacturing and automotive component production. Following a series of AutoInvest international conferences, experts in the world automotive market recognized the conference as a leading event in the automotive component industry, which enables to solve basic practical problems on establishing a constructive dialogue between automotive components manufacturers, OEMs, and the government, in the area of consolidating efforts to develop the Russian automotive industry. The conference is attended each year by 500 representatives of Russian and international automotive component manufacturers, public authorities and the banking sector, experts and analysts in the automotive market and car assembly plants from more than 20 countries. If you are interested in participating in or knowing more about this well renowned automotive conference please contact Marina Piotrovskaya on [email protected]
Click here for more information
Conference on Russian Wood and Timber RUSSIAN WOOD AND TIMBER 2014 is a conference on production, supply, processing and trade aimed to harness knowledge and create new business opportunities in the Russian wood sector. At the Russian Wood & Timber 2014 you will have ample opportunities to meet and discuss business with your peers, colleagues and potential partners over informal refreshment breaks, lunches and evening drinks receptions. Furthermore you will have possibility to introduce your products on specialized conference within the area of wood and timber. The conference will take place at InterContinental Moscow Tverskaya Hotel at April 1-3, 2014. On April 1 the conference will have a Special Focus Day devoted to the analysis, sales and distribution of timber products on domestic and international markets. On April 2 the Main Conference will begin with focus on State forest policy, domestic market and technological drivers for the industry. On April 3 the Main Conference will focus upon an analysis of Greenfiled, Brownfield and Innovative forestry projects. The hot topics of this year’s conference are: Analysis of timber products on domestic and international markets. The development of forest policy in Russia. Implementation of forest projects in Russia: evaluation of PPP potential in the Russian forestry sector, regional government development programs and capital sourcing. How to develop the Russian market of wood and timber products? How to use science and technology to drive the sector forward? Case Studies and forest projects reviews.
Link to the webpage of the conference
UMIDS 2014, the 16th International Furniture and Woodworking Exhibition UMIDS is one of the biggest exhibitions on the furniture and woodworking market of Russia. The exhibition gathers together the leading Russian and foreign suppliers and producers of industrial equipment, furniture and components for furniture production, timber merchants, business owners and representatives of authorities. The event has been held since 1998. More than 2 000 companies from 21 countries participate in the UMIDS exhibition. The exhibition is held at Kuban EXPOCENTRE, 5, Zipovskaya str., Krasnodar, Russia on April 3–6, 2013. UMIDS is also an effective business platform uniting specialists in order to discuss professional issues, conduct negotiations and establish new business contacts. There are a big number of practical seminars and conferences intended for furniture business community.
Link to the webpage of the exhibition
Trade Council Russia and Moscow's Cultural Minister Plans Study Trip to Denmark on Park Development The Trade Council Russia recently had a very positive meeting with the Cultural Minister of the Moscow City Government, Mr. Kapkov, who expressed interest for Danish producers of products and services of urban amenities development projects. The minister is very keen on arranging a study trip to Denmark in spring 2014 to meet with companies specialized in park development. The project idea is so far for 14 parks in the Moscow area, but could be extended to include St. Petersburg and Kiev. The minister was very interested in learning from Danish experiences especially within: Consulting services on bicycle roads and bicycle system development, children playgrounds, sport equipment, outdoor amenities, park lightening systems, outdoor plants and trees, materials for roads, kiosks plus the Danish know-how within the area of snow cleaning and removal. If you are interested in being a part of this event or want more information, do not hesitate to contact Marina Piotrovskaya on [email protected]
Sector News
Infrastructure
Vladimir Putin: expand investments in the Russian Infrastructure The Russian President Vladimir Putin recently proposed that the government consider increasing investments in the Russian infrastructure. A further investment in the Russian infrastructure will create multiple business opportunities for foreign companies within this sector. The funding for these investments is from the windfall oil revenue fund, a key fiscal buffer built up by the Kremlin during years of high energy prices. The possible areas of investment are Moscow airports, infrastructure in Siberia and the Far East, upgrade of the Trans-Siberian Railroad, the construction of a new multilane highway encircling Moscow, and a new high-speed railroad between the Russian capital and Kazan. The recent proposition from the Russian President is a further step in the Russian effort to modernize and strengthen the Russian infrastructure. The Consulate General in St. Petersburg is aware of the huge business possibilities this creates and has launched a Danish-Russian Road Consortium to promote Danish companies on the Russian market. So far it has led to a successful road trip to Kazan, Moscow and Irkutsk – continuing with a new road show in 2014.
New Trains for the Sochi Games in Russia Russian Railways is building the key transport route of the Sochi games — a combined automobile and railway line between Adler and the Alpica-Service mountain health resort. The line stretches for 30 miles, passing through 12 tunnels and over 46 bridges. The combined length of roads built for the project exceeds 80 miles. Another new railway line will connects central Sochi and the local airport. More than 50 percent of all air passengers arriving for the Games will use railway transport to get to the city.Estimated travel time will be under one hour. This is the fifth such air-rail service to be launched in Russia after Moscow, Yekaterinburg, Vladivostok and Kazan. The line will be served by Lastochka trains. This new type of electric locomotive, based on the Siemens Desiro design, has been developed for commuter transportation in the Russian environment and can withstand an outside air temperature between -40 and 104 degrees Fahrenheit. The developments within the transportation sector in connection with the coming Games in Sochi creates huge opportunities for foreign companies due to the enormous work pressure caused by the time factor. The overall focus upon the Russian infrastructure has increased in light of the coming games. The Russian Government has invested a huge amount of money to modernize and rebuild the Russian infrastructure – both in the areas of train – road or air transportation, which creates many business possibilities for foreign
companies with advanced technology and a focus on providing quality solutions
Russian Railways invests $18.7 billion in Far East On July 18, 2013, Russian Railways and the Ministry for Development of the Russian Far East signed a cooperation agreement of $18.7 billion to expand and modernize the railways in the Eastern part of Russia. The agreement encompasses the reconstruction of the railroad infrastructure in the district—in particular, the construction of a bridge to Sakhalin Island, the modernization of the Baikal-Amur Mainline, the reconstruction of the Trans-Siberian Railway, and the connection of the Trans-Korean Mainline to the network of Russian railroads. The ambitious program of railway expansion in Russia’s Far East opens up the prospect of creating rapid new trade routes between Asia and Europe. In addition to upgrading tracks to increase freight capacity, the work could greatly shorten the route for delivering goods from Asia to Europe. This may be reason enough to build BAM-2, as the modernization is being called, and to extend it from the present terminus at Sovetskaya Gavan to Sakhalin Island off the Far East coast. This agreement is just one of the recent efforts to modernize and expand the Russian infrastructure to integrate the vast landmasses of the biggest country in the world. The sector of infrastructure is therefore a sector of huge business possibilities for Danish companies for many years to come due to the bad condition of the Russian infrastructure.
Aviation and Airports
Continuing growth in the Russian Aviation Industry and a lack of technology leaves room for foreign companies After the break down of the Soviet Union the Russian aviation industry lacked behind due to undeveloped technology. With the recent governmental program “The Development of Civil Aviation Engineering in Russia for 2002-2010 and to 2015” the Russian Government’s goal was to stimulate the production level of the aviation industry. According to statistics over civil aircraft and helicopter construction from 1992 to 2013 the aviation industry has experienced a significant increase in production, especially after the new governmental program was implemented in 2002 (Source: RiaNovosti). Even though the Russian aviation industry is showing good signs of increasing production they still lack behind in technology. Furthermore the production apparatus industry will have difficulties meeting the increasing demands from the Russian aviation companies which leave a gap for foreign companies to do business within this sector.
Moscow Region plans to develop a fourth airport The Administration of the Moscow region is planning to turn the Ramenskoe Test Airfield into an international passenger terminal. Nowadays Ramenskoe is known for hosting the MAKS International Aviation and Space Show, but city authorities are planning that the airport will become a full-fledged passenger air hub, serving up to 10 million people annually end of 2019. The project will amount in 7 billion rubles, or $214 million – the administration is currently trying to find investors. Potential investors should consider the future airport planners’ goals, which are to have a “multi-functional center” with an international passenger terminal for “low cost” airfare companies at Ramenskoe by 2015. It will have the ability to offer its services to 400,000 people. Later, the capacity of the terminal will be brought up to 1.5 million people a year. By the second quarter of 2017, they are expecting to open a second passenger terminal and cargo terminal. By the end of 2019, the airport should be serving about 10 million passengers annually, and handling 25 million tons of cargo. The plan to turn Ramenskoe Test Airfield into an international passenger terminal underlines a growing tendency within the aviation sector in Russia, where the government and regional administrations are focused on developing this field. This focus creates huge business possibilities for foreign companies with advanced aviation and airport technology due to the fact, that the Russian business apparatus and level of technological know-how is not geared to carry on this enormous task by itself.
From 2013 onwards, regional airports in Russia will be the priority area for capital investment The Russian government is attempting to make regional airports a lucrative destination for international investors. The Russian government alone has pledged to invest approximately $5.7 billion in the period of 2013 - 2015 in airport development. By comparison, expenditure on comparable projects for the entire preceding decade was just $4.6 billion dollars, with the bulk of the cash going towards fixing up Moscow’s airports. The huge majority of transport movements in Russia are now made using foreign-manufactured aircraft, and passenger traffic accounts for 89 percent of this business, the renewed focus on the regional airports will therefor open up for further business opportunities for foreign technology within the aviation sector. Of Russia’s 315 airports, 64 require urgent rebuilding. Nearly half of these are located in areas where no other feasible transport alternatives to air travel exist. Even though these kind of projects are not that attractive for private investors, the Russian government believes that its cash injection into regional airports will help to promote private investment.
Wood and Timber
Russian timber sector – new lease on life The wooden industry in Russia has always been a main contributor to Russia’s economy - contributing with 5% of GDP. But during the last 1.5 years the industry has experienced crisis and more than 300 wooden companies has been forced to shut down. The Head of the Timber Complex Committee, Eugeny Turin, explains that the current decline is an effect of the following factors: high taxes and transportation costs, but the most crucial are technology obsolescence and a lack of professionals within the industry. The Russian Government has approved the national program “Development of Russian forest sector 2013-2020”, which is expected to get financed by 525 billion roubles (11 billion euros). The program aims to create the optimal conditions for rational and intensive timber exploitation without sacrificing the ecological role of forests - the growth of the wooden production is expected to increase with 100 million square meters by 2020. Another step towards improving the wooden industry is the Governmental Act # 1013 from November 13, 2013: “Rules of technical expertise for timber machinery”. The requirements have increased substantially and not many Russian timber producers are currently able to meet the new specifications. This creates an increased demand for new timber technologies of high standard that will both meet the requirements of the new law and improve the effectiveness and performance of wooden production. The Danish companies within the wooden and timber sector are known for their innovative and high-quality technology which the Russian producers will demand in light of the newly signed laws and initiatives.
Articles
Russian Consumers Demand for Environmentally Friendly Packaging Increases Russian consumers have more interest and demand for environmentally friendly packaging than their counterparts in some developed countries, but still are ranked at the bottom among 11 large consumer markets in terms of actual recycling activity, according to a study that global packaging giant Tetra Pak released this week. To identify attitudes to recycling and eco-friendly packaging which has high paper content and is manufactured in a way that maximizes its ability to be recycled, Tetra Pak conducted online surveys and in-
depth interviews of 7,000 consumers in 11 countries this spring. The study showed increased consumer demand for products in biodegradable and other low impact packaging, especially in developing markets where environmental degradation tends to be more glaring to local residents. However, people in these countries often could not match their enthusiasm for green containers with actual recycling activity due to a lack of infrastructure, said Libby Costin, Tetra Pak's global marketing director. More than three-quarters of Russian consumers questioned said they had purchased a product in eco-friendly packaging and 70 percent said they bought this product even though it cost more. This development depicts an increasing focus on environmentally sound solutions in the Russian society. The Russian consumer’s willingness to pay more to achieve an eco-friendly solution may develop into other areas of the Russian market and make Russia a more eco-focused country in all areas of political and societal life.
Initiation of Energy-Efficiency Labels: New Opportunities for Danish Companies in Russia The new step in promotion of energy-efficient technologies has been taken in Russia. By the end of the year the energy efficiency labels will appear on many appliances and building materials, xperts said at a news conference organized by the Association of European Businesses (AEB). This is a joint project of the European Bank for Reconstruction and Development and the Association of European Business, which will both promote the awareness of energy saving technologies and stimulate investments in such equipment. Danish technologies are considered as the most ecological and energy-efficient so the growth of interest in environment and resource saving can open the door to Russian market for Danish producers. The project includes concrete steps to bring the idea into life. The EBRD transferred the sum of 300 million euros to financial institutions specializing in funding the Russian entrepreneurs. To access these funds applicants need to demonstrate their projects that will both promote energy-efficiency and have at least 10 per cent of return on investment. Next important part of the project is the creation of the list of energy-efficient materials and equipment, which will be classified in more than 30 categories, so the customers can easily find needed item when selecting building materials. For initial testing of project three categories of products have be chosen: electrical motors, windows and refrigerators. In the light of the grown interest in energy-efficient technologies and environment in general Russian producers seem more willing to use innovations and experience of Danish colleagues. All these will further increase the possibility of Danish companies entering Russian market and strengthening of cooperation between companies of Denmark and Russia on the ground of environmental sustainability.
Russian innovation leaves room for Danish technology Jason Pontin, editor-in-chief of MIT's Technology Review, concludes after an investigation of Russia’s initiatives to enhance Russian innovation that it might take several generations before Russia’s investments in innovation bears fruit. This conclusion leaves a void for foreign and Danish innovative technology within the Russian market. Russia has many of the necessary elements to take its place among the great developers of global technologies, but there is an important aspect of corporate governance in Russia that puts Russian
technology entrepreneurs at a disadvantage. Jason Pontin explains: "If your company goes bankrupt in the U.S., and you are a founder, you are not personally responsible for the bankruptcy. But [this scenario] does not exist in Russia. And as long as Russian entrepreneurs feel that they are personally at risk … it forces them to fear failure. (…) And for a good reason as well — you can go to jail!" The uncertainty for Russian entrepreneurs, which decreases their innovative ventures, leaves a huge room for Danish technology. Denmark is among the leading countries in the area innovative technology within many different sectors. The Russian demand for innovative solutions and technology continue to increase, due to a high focus on sustainable production, energy efficiency and life cycle costs – when the Russian firms are not able to deliver the required technology, it leaves a room of possibilities for the Danish companies.
Composite materials pave a path to success 1st November 2013 Prime-Minister Dmitry Medvedev signed the Rules for granting subsidies for support of composite materials production development. This document contains mechanism of complex development from designing the new generation of composites to introduction of innovative technologies into the production process. The subsidy will cover 100% of research costs in the field of composite materials in any sector of production. How can composite materials be used? For example, implementation of composite materials in the road construction brings the quality of the roads on a new level. This technology represents synergy of the materials with different characteristics. Russian Road company RosAvtoDor has created an implementation program for polymer composite materials into the federal roads building. It is expected by 2020 that the total production of composite materials in Russia will amount to 120 bln rubles (2,6 bln euros). Moreover 8 sector development programs and 20 regional are about to be introduced in order to stimulate implementation of composite materials. Now the producers are in search of innovative ways to use composite materials, but they face lack of experience and obsolete technologies. This gives Danish companies an opportunity to offer their innovative technologies and in collaboration with Russian road companies bring this sector on the new stage of development.
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