Sept. 22 – Russian Technologies (Rostehnoliogii), a state-run industrial corporation, signed agreements on Friday with two companies from the United Arab Emirates – the ports and logistics unit of Crescent Group and real estate developer Damac.
“The Russian market is attractive enough to the Arabian investors. In particular the Russian power industry contains a number of promises for investments,” Fahd Hamidaddin, marketing director of state-run Saudi Arabia General Investment Authority, said during an interview with Infox.ru in July.
Later on, about a month ago, Russia’s Vice-Premier Igor Sechin declared that Rostehnologii will sign a US$500 million investment agreement with Crescent Petroleum.
This is the very first case where a corporation mostly working with Russian state assets will obtain foreign funds to manage.
Prominvest, a Russian Technologies subsidiary, and Gulftainer, a Crescent Group unit, agreed to set up a US$500 million fund to acquire ports and logistics assets in Russia.
“This is another major demonstration by the Crescent Group of its commitment to building strong economic ties with our Russian brothers,” vice chairman Badr Jafar said in a statement.
Crescent Group has other business with Russia. Its energy arm, Crescent Petroleum, in cooperation with state-run oil producer Rosneft, began developing oil and gas fields in the United Arab Emirates in June.
Under the other agreement signed Friday, luxury developer Damac will invest US$300 million in a joint real estate fund, whose projects will include facilities for the 2014 Winter Olympic Games in Sochi.
Hussain Sajwani, chairman of Damac Properties, said in a statement that his company had a “strong capital position” and was entering a market that features a “strong regulatory and transparency framework.”
“Political stability in the country I think has been a major attraction for Middle Eastern countries,” he said.
He also stressed that 80 percent of Russian exports leave through ports, and 50 percent of that is from just four of Russia’s 41 ports, meaning that the others have a long way to go in developing. Great potential also lies in the handling of inland container traffic that is in need of depots and logistics centers, he said.
“We are looking for investments into logistics control system optimization. No doubt Gulftainer’s inspection, the company which skilled in conducting this kind of tests, would be helpful to us,” a Rostehnologii representative said to Russian daily Kommersant.
Established in 2007, Rostehnologii contains 562 enterprises. The corporation owns large stakes of Russian truck manufacturer KAMAZ, car giant AvtoVAZ, the world’s largest titanium manufacturer VSMPO-AVISMA, and WiMax operator Scartel.