INDUSTRY REPORTS

Russia, China, Announce USD13 Billion Wide Body Passenger Jet JV

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comacRussia and China have announced the signing of a USD13 billion Joint Venture company, the China-Russia Commercial Aircraft International Corporation (CRAIC), set up to compete with Boeing and Airbus. The license to operate in China was granted in Shanghai on Monday. The JV is between the Commercial Aircraft Corporation of China (COMAC) and Russia’s United Aircraft Corporation (UAC), with COMAC chairman Jin Zhuanglong saying the joint venture will develop wide-body aircraft and aims to produce “competitive” long-haul planes for the world’s aviation market.

CRAIC will be responsible for research, manufacturing, marketing, sales and services of its aircraft. According to an agreement by COMAC and its Russian partner United Aircraft Corp (UAC), 280-seat jets with a range of 12,000 kilometers will be prioritized.

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Russian Economy Diversifying As New Agricultural Trends Lead The Way

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The Russian economy, long criticized for being too dependent on oil and gas exports, has shown signs of responding to planned diversification as Q1 Russian export trade figures are released. Commenting on these, Pavel Kadochnikov, President of the Center for Strategic Research (CSR) has highlighted fast growth in the agricultural sector especially, and including items such as corn, soybeans, confectionery and chocolate.

“New export positions have recently emerged, such as corn.” said Kadochnikov. “We normally exported a value of USD100 million and now the it is USD860 million in the First Quarter. Soybeans and soy products export was USD15-17 million and became USD330 million in 2015 and USD530 million in 2016… We sold honey worth USD14 million in two years; confectionery and chocolate sales were USD40 million and USD60 million. These are sound export positions. They are growing and have sources and prospects”

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Understanding Russia’s e-Commerce Market

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1The e-commerce market in Russia is constantly growing. The volume of cross-border trade in Q1, 2016, grew more than twice compared with the same period in 2015. In 2017, Russian buyers will spend 37 percent more via foreign online stores than in the past.

According to AKIT, the association of e-commerce companies, online sales volume in Russia grew by 15 percent by the end of 2016 – up to RUR 850 billion compared to the previous year. Among the main market drivers behind the growth of internet commerce is the increase in internet users and their competence, and the reduction of mobile internet costs. The key factors limiting growth are Russia’s negative economic situation and the decline of purchasing power. According to experts, the potential for the Russian e-commerce market is enormous. The online segment currently makes up a modest 4 percent of all domestic retail, which can be compared to 12 percent in the UK. The Russian online market is therefore not yet saturated, and the biggest players have not entered.

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Russia Becomes World’s Largest Supplier of Crude Oil

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russia-oil-flagRussia has taken over from Saudi Arabia as the world’s largest supplier of crude oil, according to the Riyadh based Joint Organisations Data Initiative. Russia pumped 10.49 million barrels a day in December, with Saudi Arabia just behind at 10.46 and the US third at 8.9 million barrels. Iraq came up in fourth place with 5 million barrels.

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LinkedIn Banned in Russia

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By Marina Romanova

linkedin-banned-in-russiaSince Friday, November 17 LinkedIn is officially blocked for around 6 million Russians, who have accounts in the world’s largest job searching engine. Russia’s Roskomnadzor communications watchdog, told Interfax news agency on Thursday that the website would be blocked within 24 hours, and a number of Internet service providers appeared to have immediately begun blocking the website, according to media reports.

LinkedIn, which has its headquarters in the United States, is the first major social network to be blocked by Russian authorities, setting a precedent for the way foreign Internet firms operate.

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Kazakhstan to Set Up its First Cargo Airline

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By Marina Romanova

kazakhstan-cargo-airlineAccording to the national railway operator, Kazakhstan Railways is setting up a cargo airline in partnership with national carrier Air Astana. The first national cargo airline will begin to operate in 2017 with China, Europe, Iran, Russia and Turkey among its first destinations.

The new transportation project aim is to strengthen Kazakhstan’s competitiveness in the world. The Kazakhstan railways described the project called Rail-Air as a “new product of intermodal transport by rail and air transport.” It is expected that cargo airline will become “an alternative to the existing, but slower supply chain Sea-Air from South East Asia to Europe via Dubai”, said the railway operator.

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Severstal to Export Chinese Steel to EU to Avoid the Utmost Anti-dumping Tariffs

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By Marina Romanova

severstal-to-export-chinese1Russian steelmaker found the way to lower the effect of severe anti-dumping duties levied by the EU on Russian steel in August 2016. According to Vadim Larin, chief executive of Severstal, Russia’s fourth-largest steelmaker, the firm is exporting Chinese cold rolled steel to the European Union instead of Russian one, because EU anti-dumping duties on the Chinese product are much lower.

The levies against Russia range from 18.7 percent to 36.1 percent and those against China range from 19.7 percent to 22.1 percent, depending on the company. Among Russian exporters, Novolipetsk Steel is subject to the maximum rate of 36.1 percent, Severstal faces a 34 percent levy and Magnitogorsk Iron & Steel Works has an 18.7 percent duty. Among Chinese exporters, Shougang group faces a 22.1 percent rate, while Angang Steel is subject to a 19.7 percent duty.

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Apple Pay to Launch in Russia

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By Marina Romanova

013016_motor_tilke-vadapt-664-high-7510 Russian financial institutions including VTB 24, Alfa-Bank, Tinkoff Bank and Raiffeisen bank are planning to launch Apple Pay following the market leader, state owned Sberbank, which has launched Apple contactless payment service since last week, Russian media reports.

According to the appleinsider.com, at launch, participating retailers include ATAK, Aushan, Azbuka Vkusa, BP, Magnit, Media Market, M.Video, TsUM and authorized Apple reseller re:Store. Touchless payments are expected to roll out at Electronics store Eldorado and Burger King in the near future.

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Eurasian Transport Hub for the Silk Road Economic Belt to be Built in Outskirts of Moscow

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By Marina Romanova

vagon_03Russia and Kazakhstan plan to build a 400,000 TEU international logistic center ‘Central Dry Port’ in Moscow suburbs, Russian daily Kommersant reports. Russian firm Coalco Development and KTZExpress, subsidiary of Kazakhstan’s Railways, signed an agreement on this project on October 5th.

The construction site of the logistics hub handling containers passing along the “New Silk Road” (China – Kazakhstan – Europe) and Trans-Siberian corridor will be situated in Domodedovo district of Moscow region on a 60 hectare plot of land at Russian M-4 “Don” highway. Container and transport terminals, warehouses of low-temperature and dry containers are planned to be built there.

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E-learning Market to Grow in Russia

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By Marina Romanova

gfk501Online education industry, also known as elearning, is growing fast in Russia, and according to the experts forecast, is expected to grow by 25 percent a year, Russian daily Kommersant reports. Statistics reveal that the world e-learning market is worth around US$107 billion and one of its major markets – Eastern Europe – is driven by Russia.

Although Russia, according to the J’son & Partners Consulting research, is responsible for only about US$162 million market share, nation e-learning market has a vast potential and continue to grow despite of the current economic crisis. Quite the contrary, the economic crisis is prompting more and more Russians to learn foreign languages. As many as 7.2 million Russians at least ones were enrolled in e-learning, Stanislav Korolkov, head of the Russian e-learning center Unibrains, told Kommersant daily.

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