Direito

Building & Construction
… Opportunities in Russia … Opportunities in Russia

Ilona Vasilieva
Business Development Manager

Austrade Moscow

Brief Profile: Russia

Russia is the largest country in the world 2.5 times larger in area than Australia Population 145 million Moscow > 10 million

Russia Today
> The ninth largest economy in the world a US$1 trillion powerhouse with average GDP growth of almost 7% since 1999. > The world’s 3rd largest gold and foreign reserves valued at more than US$400 billion. > The Economist Intelligence Unit forecasts continued broad-based growth: fixed investment expected to grow 10% p.a. over the next five years disposable income to grow 13% p.a. over the next 5 years. > Two-way trade between Russia and Australia reached A$719 million in 2006 - up 65% on 2005 figures.

Russia – World Energy Major
Russia’s wealth comes from its abundance of natural resources
Russia is the world's second-largest producer of petroleum - ~ 8 million barrels of crude per day - ~ 40 % of Russia’s GDP - ~ 12% of world oil production.

Russia – World Energy Major
Russia dominates Western Europe’s sourcing of natural gas - > 25% and growing

Russia has by far the world’s greatest reserves of natural gas - double the reserves of Iran – which is ranked 2nd. - > 22% of the world’s production

Russian Construction Growth
> The Russian construction industry is projected to grow by 15% in 2007*

> Significant growth expected for many decades to come: Huge backlog of demand after years of limited development Major European companies well established in the market. Australian companies recommended to develop links with these European companies as part of a market entry strategy.
* Russian Ministry of Economic Trade & Development

Building Activity in Western Russia

Source M&A International Inc.

SWOT Analysis of the Russian market
Strengths
The industry is growing at an annual rate of 15% in 2007. Expected to grow at 9% ave.