Austrade media release

2 September 2007

A high level delegation of leading Russian companies will visit in Australia as part of Russian President Vladimir Putin’s participation at APEC Leaders’ Week, the first visit by a sitting Russian head of state.

Austrade’s Chief Economist Tim Harcourt said the arrival of the Russian President and business delegation comes at a time when Russian-Australian trade is experiencing unprecedented expansion.

“Since Moscow gained entry into APEC in 1997, Russia’s influence in the world as an economic player has increased considerably,” said Mr Harcourt.

“The Russian economy has achieved an average annual growth rate of almost 7 per cent and is looking beyond its key resource sectors in oil and natural gas to build a broader economic base through increased international trade and inward foreign direct investment (FDI). Net FDI (inward minus outward) increased 27-fold in 2006 as much of the foreign capital that exited in the 1990s has begun to return,” Mr Harcourt said.

“One of the lesser-known factors underpinning Russia’s rise is the increase in outward direct investment, with Russian transnational companies now amongst the top multinational investors from emerging economies,” Mr Harcourt said.

“According to UNCTAD, until 2006, no Russian company appeared in the top 50 rankings of emerging market multinationals; now there are two with more expected to be on their way. Along with Norilsk Nickel, well-known Russian energy companies like Gazprom, Rosneft, Lukoil and Rusal are becoming household names worldwide, along with the ambitious steel maker Severstal and even telecommunications companies MTS and Vimpelcom,” he said.

Dan Tebbutt, Austrade’s Senior Trade Commissioner in Moscow, said Australia’s trade with Russia has also increased dramatically in recent years, with a 65 per cent increase in two-way trade to $719 million in 2006.

“Australia’s merchandise exports to Russia increased by a staggering 95% in 2006, with a range of new Australian goods and services now finding customers in Russia,” Mr Tebbutt said.

“Australian exporters have enjoyed strong growth in Russia’s $387 billion retail market, the eighth largest in the world. Meat exports are booming with a 14-fold increase in beef, a three-fold increase in lamb as well as a major increase in wine sales of around 40 per cent in 2006.”

“The Russian resources boom is also generating opportunities for services providers in mining and energy technology,” Mr Tebbutt said.

“BHP Billiton and Rio Tinto have major investments through respective joint ventures with Norilsk Nickel. Macquarie Bank recently announced a joint venture with Russia’s largest investment bank Renaissance Capital to invest in infrastructure projects. In the industrial sector, major Australian players like Orica have significant manufacturing plants in Russia,” he said. 

In 2006-07, Austrade assisted 112 companies make deals in Russia worth $694 million. Twenty-one of these companies were new or irregular exporters.


ENDS

Media contact

David Varga
Tel: 02 9390 2191
Mob: 0434 567 673
Email: david.varga@austrade.gov.au

For further news and information from the Australian Trade Commission (Austrade) visit www.austrade.gov.au/mediacentre.