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The RUSSIAN Market Today John McCaslin, Senior Commercial Officer U.S. Commercial Service U.S. Embassy – Moscow 2013 Opportunities and Challenges in Europe’s.

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Presentation on theme: "The RUSSIAN Market Today John McCaslin, Senior Commercial Officer U.S. Commercial Service U.S. Embassy – Moscow 2013 Opportunities and Challenges in Europe’s."— Presentation transcript:

1 The RUSSIAN Market Today John McCaslin, Senior Commercial Officer U.S. Commercial Service U.S. Embassy – Moscow 2013 Opportunities and Challenges in Europe’s Largest Market

2 Economic Brief  World’s 7 th largest economy (PPP)  Highest per capita income of “BRIC” countries.  World’s 3 rd largest foreign exchange reserves.  Dramatic reduction in sovereign debt.  Population: 142 million  Real GDP growth 3.6% in 2012 (Avg. +7 from 99-08)  Nominal GDP $1.953 Trillion  Per capita GDP: $13,377 (vs. $5,300 in ’05)  Inflation (CPI): 6.7% ^ (vs. 21% in 2000)  Unemployment: 6.% ^ (vs. U.S. 8.0% Dec 2012)

3 Potential for growth  Russia joined the WTO August 22,  Gained Permanent Normal Trade Relations (PNTR) December 20, 2012 What this means for U.S. Companies  Lower tariffs for numerous products;  More protections for service-providers, IP-rightholders  Better predictability & increased transparency in regulations;  Ability to leverage the WTO’s Dispute Settlement process.

4 Not An Easy Place to Do Business  Government Corruption  Challenge to find qualified business partners  Complicated and non-transparent regulatory regime  Product Registration –Time-consuming, $$  Large state role in the economy  Nothing Happens Fast in Russia  More Corruption

5 Your New Business Partners ???

6 Closing the Deal ???

7 Negative Stereotypes - to Make a Point  Challenging Market – Not for Everyone –We often advise companies not to try this market –Part of our job is to provide accurate information and good advice –We do this to save you time and money  Successful Market Entry Requires -Thorough market research & due diligence -Senior management long-term commitment - Creativity and persistence - Carefully following US and Russian laws from the start

8 Successful Market Entry Means Substantial Rewards  A foothold in Europe’s largest market  Enjoy robust growth rates & profit margins  Position Yourself for Expansion throughout the CIS Region in Eurasia – Customs Union  New CS Region – Russia/Ukraine/Kazakhstan  700 AmCham member companies prosper here  Thousands of European firms also thrive

9 World’s Largest Country  Moscow – 12 million people; St. Petersburg – 4 million  9 other cities with a population over 1 million: Novosibirsk, Nizhny Novgorod, Yekaterinburg, Samara, Omsk, Kazan, Chelyabinsk, Rostov-Na-Don, and Ufa

10 Soviet Union Modern Russia Traffic Then and Now

11 Shopping – Then and Now

12 Major Conspicuous Consumption 

13 MODERN RUSSIA – THE BUSINESS REALITY  Significant progress over past 20 years.  Impressive economic growth from 1999 –  Rebounded strongly from the global financial crisis.  Substantial structural, administrative, & economic reforms continue – WTO newest major member.  Strategic market with huge natural resource endowment - Natural Gas, Oil, Minerals, Timber - Provides financing for government procurement - Provides financing for economic diversification  Ebay/PayPal did $300 million in sales in 2011

14 Trade FOREIGN MERCHANDISE TRADE (U.S.$ billions) Russia Exports to World Russia Imports from World U.S. Exports to Russia U.S. Imports from Russia

15 Opportunity Drivers  Presidential Modernization and Innovation Program 5 Priorities - Medical Equipment - Efficient Energy production, transportation and use - Civilian Nuclear Technology – electric power - Information Technology - Ground & Space Infrastructure – telecom networks

16 Opportunity Drivers, cont.  State-run Rusnano Corporation – Investing in technology commercialization(earned a profit in 2010) through 2010 invested $12 billion in 104 projects - From 2011 plans to invest $2.2 billion in: - solar energy - energy efficiency - medicine - biotechnology - metalworking - opto and nanoelectronics

17 Opportunity Drivers, cont.  Massive infrastructure needs - Road building upgrade and expansion - Railroad upgrade and expansion  Russia Hosted APEC 2012 in Vladivostok  Sochi Winter Olympics 2014  World Cup Soccer 2018 – 10+ Russian Cities

18 Leading Sectors for U.S. Exports  Agricultural Equipment Agricultural Equipment  Apparel Apparel  Auto Parts and Service Equipment/Accessories Auto Parts and Service Equipment/Accessories  Aviation Aviation  Chemicals/Plastics Chemicals/Plastics  Construction Construction  Consumer Electronics Consumer Electronics  Electrical Power Generation and Transmission Equipment Electrical Power Generation and Transmission Equipment  Energy Efficiency/Green build Energy Efficiency/Green build  Medical Equipment Medical Equipment  Refinery Equipment Refinery Equipment  Safety and Security Equipment Safety and Security Equipment  Travel and Tourism Services Travel and Tourism Services

19 Taking Advantage of Opportunity  Trade Missions - Aerospace suppliers (October 2010) - Results - Automotive Supply Chain (April 2012) - Energy Efficiency (June 2012) - Healthcare/Medical Equipment (June 2013) -

20 Healthcare Trade Mission To Russia June 3-7, 2013 Join Us Led by a senior Department of Commerce official, this mission is designed to provide a powerful opportunity to explore Russia’s rapidly expanding healthcare market. Why Participate? The program will begin in Moscow and conclude in St. Petersburg, Russia’s two largest cities. In both cities:  Participate in one-on-one appointments with prospective Russian business partners,  Site visits  In Moscow there will also be a market briefing with industry experts and Russian Government officials.  Networking receptions at the Ambassador's residence in Moscow and the Consul General’s residence in St. Petersburg.

21 Healthcare Trade Mission To Russia June 3-7, 2013 Cont. Why Russia? Diverse Cross Section of Best Prospects - The Russian healthcare sector needs everything. In particular, medical equipment, dental equipment and biotechnology products. Strong Market Potential - Russia, with 140 million consumers and almost unlimited medical needs, presents lucrative opportunities for U.S. companies seeking to export and partner with local companies. Modernizing Healthcare - In the last several years, the Russian Government has been developing a long term strategic plan to modernize this sector with significant investments planned. They welcome and need new products, technology and know-how.

22 Healthcare Trade Mission To Russia June 3-7, 2013 Cont.  Delegation will be 15 – 20 U.S. Companies  March 15, 2013 Application Deadline  $4722 for small and medium enterprises (fewer than 500 employees) $4965 for large firms $750 for each additional firm representative. Expenses for travel, lodging, most meals, and incidentals will be the responsibility of each company/representative.

23 Healthcare Trade Mission To Russia June 3-7, 2013 Cont.  Jessica Arnold - U.S. Commercial Service Washington, DC, Tel: (202)  Timothy Cannon - U.S. Commercial Service U.S. Embassy, Moscow, Tel:  Yuliya Vinogradova - U.S. Commercial Service U.S. Embassy, Moscow, Tel:

24 Commercial Service Russia Results  2011 – Helped 150 companies enter/expand in Russian market  Ohio graphite material science company  Arkansas manufacturer of cables for the mining sector  California enterprise software company  Colorado franchising company marketing video-based, live- facilitated management and sales training  Texas maker of in home gender prediction kits  South Carolina distributor of reconditioned U.S. medical imaging equipment  Texas manufacturer of industrial plant, dock and terminal use tractors used in cargo and materials handling  California – based supplier of high performance automotive parts and tuning equipment  Wisconsin manufacturer of special purpose heavy duty trucks  North Carolina manufacturer of precision industrial controls

25 Managing Risks & Reaping Rewards  Commercial Service Russia on the ground in Moscow, St. Petersburg  Russian staff of industry specialists writing original market research  Practical advice on market entry and market planning  Our main interest is your long-term success in the Russian market  Let us help you manage the risks and reap the rewards

26 Senior Commercial Officer U.S. Commercial Service U.S. Embassy - Moscow Contact us today to connect with a world of opportunity. export.gov | 800.USA.TRADE


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