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16 Jun, 2010 07:02

Russian market appeals to the west

The global economic crisis has forced companies to find new ways to secure their businesses. More European companies are turning to Russia and Russia is turning to the west.

Brussels is probably the best place to talk about internationalization. It seems every other citizen of this city is a native of a different country. So it’s no surprise one of the topics at the 15th Russia – EU forum was how to gain greater access to each other’s domestic markets, believes Alexander Rahr, Program Direcotr Russia/Eurasia DGAP

“The Russian market is much more open for western business than in the 90s because the laws according to which western companies can work are safer for the western companies. I think a huge problem has been removed in terms of property rights for western companies in Russia.”

A welcome change, which has benefited both sides as Russia has become the EU’s third biggest trading partner, says Igor Yurgens, vice-president of RSPP

“Definitely there are much more European companies represented in Russian federation, than us because we were busy with our domestic developments, but we gradually go out. So far its energy and oil and gas and this has to be changed and we will be changing this.”

However, even the traditional sectors where Russia has a strong presence, such as natural resources has potential for further growth. Wingas is a joint-venture set up by Russia’s gas giant Gazprom and Germany’s largest crude oil and gas producer Wintershall . Wingas CEO, Dr. Gerhard Koenig believes the European market has plenty of room for Russian companies.

“We also need in Europe more transit routes and that is why we’re investing in Nord Stream as well as on the on-shore side, we need storages in Europe, and also if you see the declining production, we need more imports and that is why there are opportunities.”

But it’s not only big Russian companies that operate in Europe. Small firms are also quite common. Being on two markets at once is a healthy form of diversification – with Russia generally being quite volatile, yet highly profitable, and Europe – the calmer market with less earning power.