Group 2: Automotive construction

The second group of the companies is presented by the manufacturers of the automobiles in Russia. Mostly these are foreign companies which have their own facilities here, but there are also Russian producers in the list. The automotive construction in Russia is very attractive for the foreign investments due to several factors, such as lower costs of the labor force and production together with a positive demand for the foreign cars and a growing income level in Russia. The main players of the field are listed in Table 2 below.

Avtoframos[18]

JSC "Avtoframos" - Russian carmaker. Was created as a joint venture between Renault and the Moscow government, but by the end of 2012, has been completely bought out the French. Full name - Open Joint Stock Company "Avtoframos". The plant's capacity - 160 thousand cars a year. The headquarters and production are located in Moscow.

Founded in 1998. Then part of the joint venture was entered much of the territory of "Moskvich" (formerly unfinished engine plant). In 2005, the company began assembling cars Renault complete cycle.

In 2010, at the facilities of auto plant began production of the hatchback Renault Sandero, in the fall of 2010 - Model Fluence and Megane (by SKD). In 2012 began production of crossover Renault Duster. From 2012, it was planned to cease production of the Renault Logan in connection with his transfer to "AvtoVAZ".

In 2004, the French company bought out the part of the Moscow government in "Avtoframos" by acquiring a 26% stake. In 2006, Renault increased its stake to 94.1%, and in November 2012 to buy out the company. The total investment of the French in "Avtoframos" by the end of 2012 amounted to 480 million euros

Avtotor Group[19]

"Avtotor" - a factory for assembling cars in the Kaliningrad region. Founded in 1996. In 2008, he was one of the largest companies in Russia for production and assembly of car brands - BMW, Chevrolet, Hummer, Kia.

In August 2003, General Motors signed a set of agreements on the organization of production of GM car factories in Kaliningrad "Avtotor".

In 2006, he held the 69th place in the list of 200 largest Russian private companies by the magazine Forbes. The company's revenue in 2011 amounted to about 4 billion euros (own estimate).In July 2009, the plant capacity "Avtotor" began production SUV BMW X5 and BMW X6.

At the end of May 2010 "Avtotor" announced the launch of production of the BMW 5 Series 2011 of the coming of the German car kits. In Russia Chery car assembly began in 2006 at the Kaliningrad plant "Avtotor". Chery car sales began in Russia in May 2006.
In March 2008, "Avtotor" stopped assembling cars Chery. The main reason is called failure to provide special benefits economic zone on the duty-free import of components.

Currently, work is underway to expand the range by vehicles with larger capacity. "Avtotor-Trucks" and its distributor "Avtotor Vans" offers a wide range of additional services to the car's special add-ons, such as - vans (manufactured goods, isothermal) loading platforms with different manipulators, hauler, and other add-ons.

AvtoVAZ Group[20]

In contrast to the Russian market, where sales of LADA cars in January-March, down 15%, the supply of "AvtoVAZ" for export showed a significant increase. Implementation of LADA in the I quarter increased by 84.5% to 16,474 vehicles. How to tell "AUTOSTAT" in the press-center of "AvtoVAZ", in the first three months of 2012 the largest share of exports of the company belong to Kazakhstan (42%), Ukraine (28%) and Azerbaijan (16%).

As for the model structure of exports, demand varies by market. Thus, the main exports - 90% - of LADA cars in Europe have on the family of LADA 4x4. The largest volume of exports to other CIS countries accounted for LADA Kalina - 62%. In the CIS countries most in demand family LADA Samara (37%) and LADA Priora (28%). It should also be noted that in March 2012, began shipping cars LADA Granta to the CIS, the new ships now produced in all trim levels.

As described in the press center of the AvtoVAZ plant is developing a new strategy for the export of cars LADA, which gives remarkable results. It is significant that the growth of export sales of "AvtoVAZ" is recorded for the third year in a row: 42 143 vehicles in 2010, 56 010 - in 2011, 16 474 - for three months in 2012.

More than half of the exports of cars LADA accounts for the CIS countries. Also continued delivery of LADA cars in Europe, where our brand is well-known. Continues AvtoVAZ and promising negotiations for deliveries of cars with companies from other regions of the world. But still the highest sales of LADA accounts for the domestic market. In the I quarter of 2012 in Russia sold 109,388 cars LADA, which fully complies with the company's plans. Business experience in the industry shows that a decrease (in the worst case - stop) exports will inevitably lead to the weakening of the domestic market[21].

Ford Motor Company

July 2002 - Ford begins producing near St. Petersburg cars Ford Focus; initial investment was $ 150 million.

April 2005 - Ford opens up outside Moscow's National Centre for distribution of spare parts for maintenance of vehicles Ford, Land Rover and Volvo.

June 2005 - Ford announces plans to increase since January 2006, the power plant near St. Petersburg to 60 thousand cars a year. This required a greater investment Ford to a value exceeding $ 230 million.

April 2006 - The plant near St. Petersburg produces one hundred thousandth car Ford Focus.

April 2007 - successfully started a new business in Russia Ford - a division of Ford Heavy Trucks. Ford Heavy Trucks network includes six dealerships in Moscow, St. Petersburg and Krasnoyarsk.

March 2009 - Began production Ford Mondeo at the Vsevolozhsk plant in the sedan in the six possible customized with a wide choice of petrol and diesel engines, with manual and automatic transmission. By the end of 2009, the share of this model on the Russian market increased to 7.4% in the segment.

May 2010 - In the 77 cities of Russia, there are 120 points of sales and service of cars Ford, including 106 authorized dealers Ford.

October 2011 - a joint venture with equal participation of the parties between Ford Motor Company and OAO «COLLERS" began operating. "Ford Sollers Holding" Ltd. will manufacture passenger and commercial vehicles Ford in the Leningrad region and the Republic of Tatarstan, offering greater choice to Russian buyers[23].

GAZ Group

January 2006 - The first Ural trucks of GAZ Group were first assembled in Viet Nam, at a Russo-Vietnamese truck assembly joint venture.

March 2006 - The assembly enterprise of Ural India Limited, a joint venture of Ural Truck Plant and the Indian Motijug Agencies Ltd., started operations in India. GAZ Group got down to serial production of the Volga cars with DaimlerChrysler engines.

April 2006 - GAZ Group signed an agreement for purchase the DaimlerChrysler car assembly equipment and also the license for making a car on the basis of the Chrysler Sebring/Dodge Stratus platform.

June 2006 - GAZ Group signed a partnership agreement with Renault Trucks for transfer of production of heavy diesel engines of DCi11 to Russia.

July 2006 - GAZ Group purchased from the U.S.-based fund of Sun Capital a 100% stake in LDV located in Birmingham (UK), an independent maker of modern light commercial vehicles of the Maxus family.

December 2006 - The Likino-based bus plant of GAZ Group and MAN created the first joint city bus model — a low-floor LiAZ-52922 fitted up with German MAN engine of Euro 3 environmental standard. GAZ Group announced signing of a loan agreement whereby a syndicate of independent foreign financial and lending institutions provided a US$ 100,000,000 syndicated loan to GAZ JSC.

October 2007 - GAZ Group launched the production of YaMZ-650 diesel engine. The company had bought the license and manufacturing equipment for this model under the brand DCi in 2006 by Renault Trucks.[25]

GM-AVTOVAZ

In 2002, 456 vehicles came off the JV's assembly-line, in 2003 – 25,235, in 2004 – 55,150, in 2005 – 51,810, in 2006 – 47,881, in 2007 – 55,052, in 2008 – 54,654, in 2009 – 23,101 vehicles, in 2010 – 36,996, in 2011 – 57,765.

In 2012, 62,981 Chevrolet NIVA vehicles rolled off the line of the JV. This is 9% higher than in 2011.

63,023 vehicles shipped to dealer including 2,744 to CIS countries, again 9% higher than in 2011.

Totally, 469,220 Chevrolet NIVA sold since the start of production including 34,332 units to CIS countries.

Today, 154 dealers provide Chevrolet NIVA sales in Russian Federation together with 8 dealers and 3 distributors in CIS countries.

The Joint Venture production philosophy is based on lean production concept (GM-GMS system) which is standard for any GM Corporation facility throughout the world. The main element of this concept is how to reduce wastes of all kinds and ensure manufacturing of quality products which is achieved through strict input and output control as well as standardized procedures, personnel training and motivation. From the 1st of July in 2002 the SAP system was introduced at the plant and it is successfully operational ever since. Currently it is being upgraded and developed[26].

Hundai Motor Manufacturing Rus

2012 – the plant reached full production capacity of 200,000 vehicles per year. The plant provides 5,000 jobs.

This is the first Russian company, which operates in the full production cycle of foreign automakers, ranging from punching the body and ending with the assembly. The plant consists of four main shops: stamping, welding, painting and assembly, as well as the test track, where all the cars are tested. The plant is equipped with modern high-tech equipment, and the highest level of the organization and automation robots.

Using cutting-edge technology based on its own research centers, Hyundai Motor Company is constantly developing and improving the line of cars. St. Petersburg plant releases a new model of car - Hyundai Solaris, designed specifically to meet the requirements of Russian customers, our road and climatic conditions.[27]

KAMAZ Group

OJSC "KAMAZ" is a full-cycle production automaker that combines metallurgical, forging, pressing-and-frame, mechanical assembly, special machine and tool production with all the necessary facilities and enabling the energy in the 16 specialized factories in Russia and the CIS countries, from including 9 - in Naberezhnye Chelny. In addition to development and production, the company is engaged in servicing of cars and trucks, domestic and foreign trade, and other activities.

Also has overseas manufacturing facilities in the following countries: Angola, Azerbaijan, Afghanistan, Venezuela, Vietnam, India, Iran, Kazakhstan, Korea, Nicaragua, Pakistan, Panama, Philippines, Poland, Saudi Arabia, Sudan, Turkmenistan, Ukraine, Chile, Ethiopia.

Taking into account all shareholders’ objectives and interests is the basic premise of the Strategic Development Program.

Russia considers KAMAZ as its industry shaping enterprise and a major exporter of commercial vehicles, as it was formulated in “The RF Automobile Industry Development Strategy until 2020”; and a major shareholder in the company – Daimler – considers KAMAZ to be a strong regional player.

As a result of an impact from these factors, there are the following strategic priorities of the development of KAMAZ:

· key market is Russia;

· maintaining the dominant role in the CIS countries;

· presence in the attractive markets of Euroasia, Africa and South America;

· positioning itself in the medium price segment;

· developing the integration with Daimler[30].

Nissan Manufacturing RUS

The test vehicle assembly plant was launched in early 2009. A June 2, 2009 near St. Petersburg the grand opening of the plant. At the St Petersburg plant will initially be released only two models - Teana and X-Trail. The design capacity - 50 thousand cars a year. Maximum number of staff - 750 people. Total investment in the project by the Japanese company made ​​about $ 200 million.

At this time (2012) at the factory near St. Petersburg launched production models Nissan Teana, Nissan X-Trail and Nissan Murano. In addition, in 2012, started test production of the new Nissan Almera AvtoVAZ plant in Togliatti, in late 2012 to begin mass production of the model. Production is established on the new line for car assembly conveyor platform B0, which already made ​​car Lada Largus.

PCMA Rus

Plant "PSMA Rus", the joint venture PSA Peugeot Citroën (70%) and Mitsubishi Motors Corporation (30%), opened in Kaluga region in April 2010. PSMA Rus is one of the largest employers in the region and contributes significantly to the economy of the area. Plant equipment meets international industrial and environmental standards, and international experience of the team of the plant allows the company to successfully develop production.

Continuous build Peugeot 408 was successfully launched in 2012, which made it possible to present to the market a car designed with the Russian climate, road conditions and preferences of potential customers. Subsequently range of factory assembled models will join the cars of Mitsubishi and Citroën[32].

Sollers Group

SOLLERS owns production sites that produce Russian UAZ and Korean SsangYong SUVs, Japanese ISUZU trucks, as well as ZMZ petrol and diesel engines.

The SOLLERS strategy includes the full cycle of customer services:
1. Car selection: customer-tailored modifications.
2. Car manufacturing: realization of customer wishes.
3. Car sale: best service standards from the company’s chain.
4. After-sale services: full accompaniment of car operation.
5. Customer motivation: financial instruments of offers[34].

In 2011, Ford Sollers, a joint venture responsible for producing and selling a broad range of Ford vehicles in Russia, started its operations. In 2012, it was MAZDA SOLLERS, a joint venture that already launched production of its first CX5 model in Vladivostok. In 2013, it is also planned to start production of Toyota vehicles as part of a joint venture with Mitsui.

Volkswagen Financial Services RUS

Volkswagen Financial Services RUS (LLC "Volkswagen Financial Services RUS") operating in the Russian market since 2007 and is a division of Volkswagen Financial Services AG - one of the largest international companies specializing in financial services for the automotive market. Volkswagen Financial Services for over 50 years providing financial services, including leasing, operating leasing, credit and insurance, in more than 35 countries. During this time, had accumulated the expertise to create a progressive technology and our own know-how, which are already being used in Russia.

Volkswagen Financial Services RUS works with brands that are part of the concern Volkswagen AG: Volkswagen, Audi and SKODA[36].

Summary

As it can be seen from the tables above, many of these companies get financial and tax support from the Russian government, which is rather interested in foreign investments of this kind in this sector of economy. The foreign market players which come to Russia provide local citizens with thousands of new working places and make a significant impact into the GDP of the country. The main directions of the governmental policy in the issues of automotive companies support are the following:

· Customs tariffs and taxes correction;

· Subsides provision for those individuals who are going to take a loan for a car purchase;

· Stimulation of the investments and public guarantees provision;

· Discount for cars delivery to the Far Eastern Federal district (in partnership with Russian Railways).

The Russian companies from this sector obviously get even more support which is expressed in governmental programs of financial help (for example, governmental subsidy loans program for AvtoVAZ or non-repayable loans), collaboration with the foreign partners (for instance, Renault), stimulation of demand through public purchases and old cars utilization mechanism.

All in all, these measures make the Russian automotive industry attractive for the foreign investors from the one side and help domestic companies stay competitive and expand abroad – from the other.

There are 2 more foreign companies which are not related to the automobile construction but in terms of Russian policy issues and market penetration mode they are quite similar to the foreign cars producers. These companies are Samsung and Indesit. The first one came to the Russian market in 1974 and has its production facilities in Lipetsk. The business of the company are refrigerators and washing machines. As for Samsung, it established the first plant in Russia in 2007 and exports the production from there also to Belarus, Ukraine and Kazakhstan. The business of Samsung – TVs, monitors, mobile phones, players etc.

Group 3:

Finally, the last big group of the companies consists of those which produce heavy machinery such as airplanes, railways transport, shipment, agricultural technics and engineering machinery for fuel or chemical plants (compressors, turbines and other equipment). They are mostly local and some of them are state-owned. The majority of these companies was established in the Soviet times and was converted into holdings in the early 2000s. Exporting activities of these companies are quite intensive. The results of the analysis are listed in the table below.

Altaivagon

JSC “Altaivagon” is one of the biggest Russian manufacturers of railway cargo vehicles (wagons, cisterns and transporting platforms). The main production of the company contains around 20 models of railway vehicles of different types and construction and able to transport any cargo. “Altaivagon” develops and produces these models, provides services of the vehicles and also operates in steel production.

The company was founded in 1941 and used to be fully state-owned. It went internationally in the 1970s establishing close contacts on the Chinese market. PRC was the first international partner of “Altaivagon” and further the company developed its exporting activities to Estonia, Mongolia, Kazakhstan and Uzbekistan. The choice of the countries was stipulated by the political relationships with the Soviet state, the existing demand on those markets together with a great access of “Altaivagon” to the main raw material – steel. Moreover, it was easy and relatively cheap to deliver the production to those countries due to the geographical location of the plants. “Altaivagon” has three plants in Russia (Novoaltaysk, Rubtsovsk and Kemerovo) where all the production is done.

In 2004 the enterprise was joined to The SDS (Sibirsky Delovoy Soyuz) Holding which is a private company. Today the company realizes the major part of its production on the Russian territory and also exports to the countries mentioned above. It possesses 10% of the railway vehicles construction market share in the CIS region and is the only supplier of the covered cargo wagons to all the railways network of CIS. Moreover, JSC “Altaivagon” is the only Russian producer of the car carriers.^[37]

According to the weekly magazine “Expert”, ^[38]JSC “Altaivagon” takes the second place in the ranking of the most dynamic medium enterprises in Russia (2011); its sales amount in 2011 was 126 billion RUB^[39].

Nowadays JSC “Altaivagon” is supported by state on the local authorities’ level. It gets mostly financial support (backing of the credit rate for account of the Altay district’s budget).^[40]

Compressor Plant Borets

Compressor Plant Borets is the oldest compressor-construction manufacturer in Russia, located in Moscow and was established in 1897 by a German merchant. It designs, manufactures and provides services for the compressor equipment. In 2010 it was reorganized to the JSC.

The company today is one of the Russian leaders in the compressor and gas-distribution equipment and has a sound reputation of a developer and a producer of equipment for oil, gas, chemical, metallurgy and other industries[41].

The plant is owned by a private individual, its organizational form is JSC and it has been privatized in the 1990s, what is quite typical for this kind of enterprises.

As for the internationalization activities, the scope is not that big, the company is mostly focused on the Russian market. However, it has recently opened 2 representative offices in Kazakhstan and Uzbekistan, those countries with which it has active exporting relationships.

In 2011 sales volume of the company was 17 136 million RUB[42].

Electroshield Group

The “Electroshield” company is a 70 years old Russian developer and manufacturer of electrical products with a great history and a brilliant reputation. During last 50 years the company takes a leading place on the Russian electrical market and during 40 years – on the construction industry market. The company is not only the one in Russia with such a sound experience of electro-production but also pays much attention to constant innovations. The new products share in total amount of production reaches 75%. Company’s sales are 21 634,20 million RUB in 2011.

The “Electroshield” company manufactures and realizes electrical products 0,4-220 kV as well as a great variety of construction materials including modular and industrial buildings.

The company was founded in 1943 as a service and maintenance basement for the Volzhskaya hydro plant building and now it has been developed into a great complex of enterprises. It includes several manufacturing areas, planning institutes, engineering and commercial facilities, assembly departments and 19 representative offices in Russia and CIS countries.[43]

“Electroshield” is now owned by Russian state (25%, Rosimuschestvo) together with the company’s top-management (25%) and a French company “Schneider Electric” (50%).[44] At the moment of foundation as well as at the period of international expansion it was completely state-owned and the political connections of the Soviet government dictated its international policy.

HMS Group

HMS Group is a dynamically growing diverse corporation that combines leading manufacturing (рumps, compressors, oil and gas equipment), engineering and construction companies. It operates on the markets of oil & gas, nuclear and thermal power generation, water supply & utilities, metallurgy etc. EPC[45] projects for oil & gas and water industry is one of the strategic directions of the HMS Group. The company claims its target as to become a globally operated machine building and engineering company, to become client-oriented pumps, compressors and processing equipment supplier and integrated solutions provider for oil & gas, power, water and environment.[46]

The company was found in 1993 as a supplier of the compressor equipment to Russia from the CIS countries where the special types of pumps for the Russian market could be found. Starting from the 1995 the scope of the group’s activities became international and the company turned out into one of the leaders of the Russian pumps and compressors market. The HMS group operates in Russia, Ukraine, Belarus and Germany and has production plants in all these countries. The group includes 10 JSCs – large specialized producers of pump, compressor and block-modular oil-field equipment and the variety of design, engineering, construction and service companies: Livgidromash, Neftemash and Bavlensky Plant «Elektrodvigatel», Nasosenergomash (Sumy, Ukraine), Nizhnevartovskremservice and Livnynasos, VNIIAEN (Sumy, Ukraine), Tomskgazstroy, Sibkomplektmontazhnaladka, Dimitrovgradkhimmash, Plant Promburvod (Minsk, Belarus), NPO Gidromash (Sumy, Ukraine), Sibnefteavtomatika and Rostovsky Vodokanalproekt, Giprotyumenneftegaz, Hydromash, Sibneftemash, Bobruysk Machine Building Plant, Kazancompressormash and Apollo Goessnitz GmbH, German pump manufacturer[47]. The company’s profit in 2011 was 23 563 million RUB[48].

The company is a private one and state is not included into the ownership or management processes. However, The HMS Group gets some financial support from the Russian government: for example, in 2011 Sberbank[49] opened a special credit line for the company for 3 years so that it was able to refinance its short-term debts and to reduce costs of the borrowed assets.

Irkut Corporation

The Irkut Corporation is the world-recognized leader of the Russian aerospace industry. It is arranged as the vertically integrated holding company with diversified products portfolio, able to conceive, design, build, deploy, and support top-of-the-line aircraft. The IRKUT Corporation has unified a number of prominent design and manufacturing companies — Irkutsk Aviation Plant, Beriev Aircraft Company, Yakovlev Design Bureau, BETA AIR Company and some others.

The Irkut Corporation’s main products are combat aircraft of the Su-30 family. The Corporation is a prime contractor in manufacturing the Su-30MKI multi-role fighters for the Indian Air Force. Under a product diversification program, the Corporation is also developing and manufacturing Yak-130 combat training aircraft, unmanned aerial vehicles and components for Airbus passenger airliners. In the recent years Irkut has launched the program of developing the new passenger airliner MC-21.

The Ircut Corporation exports its production to 37 countries all over the globe: to Africa, Middle East, Europe, China, ASEAN region, CIS countries. Its first foreign sales were in 1937 when the Soviet government took a decision to supply fighters “СБ” to China which was involved into the war conflict with Japan. Since that the corporation has significantly expanded its activities and sales abroad.[50]

The Irkut Corporation is a part of a JSC “United Aircraft Corporation” which is fully state-owned. The United Corporation possesses over 92% of Irkut’s shares and thereby The Irkut Corporation is 92% state-owned[51]. The Corporation constantly gets state orders from abroad for the military production.

Kamskiy Kabel

Kamskiy Kabel Ltd. is the largest Russian manufacturer of cables, wires and conductors operating also on the CIS countries market. The plant is situated in Perm; the company also has a representative office in Kazakhstan. The company is included into the Forbes list of 200 biggest non-public companies in Russia in 2011[52].

Kamskiy Kabel Ltd.’s prior market is internal one because the demand of Russian enterprises for cable products is growing even faster than Kamskiy Kabel’s facilities. Over 85% of all production is sold in Russia, 12 – 13% - in the CIS countries and only 2% are sold abroad. The low export share is explained by the following reasons:

· Incompatibility of local Russian standards and international requirements;

· Higher price for the foreign customers because of transportation costs (3 – 10% of the cost of goods);

· Production capacities workload by internal orders.[53]

Kirovskiy Zavod

Kirovskiy Zavod is a large group of companies, one of the biggest in the North-West region of Russia; in 2009 was included into the list of the system-formative enterprises of the Russian Federation. Its various business portfolio includes the following productions: equipment for agriculture, fuel and energy sector, road construction, industrial and civil engineering, oil and gas, nuclear energy, defense, forestry industry, utilities, railroad transport and shipbuilding. The production of Kirovskiy Zavod is exported to over 20 countries in the world.

It is difficult to say when exactly the company started export of its production abroad since there was no actual information displayed; however, in the recent years Kirovskiy Zavod leaded a series of M&A activities and thus penetrated the German tractor and metal construction market. The aim of these deals was to integrate to the global economy and to get new experience of the foreign partners. [54]

The company constantly collaborates with the Russian state through the state orders provision (Ministry of Defense, Rosimuschestvo, Rosatom).[55] Moreover, the company operates in the industrial machinery construction sector and thus gets a special governmental support[56].

The company is owned partly by private individuals (18%), partly by the Swiss banking group UBS (18%) and the majority of its stocks belong to the National Depository Company.[57]

Machinery and Industrial Group N. V.

Machinery & Industrial Group N.V. is a leading producer of facilities and spare parts for light and heavy engineering and off-road machinery. M&IG N.V. has a leading presence not only in key sectors of Russian and CIS countries economy but also worldwide. Its production is used in the oil & gas, fuel-and-energy, infrastructure, agriculture, construction and road-building sectors as well as in mining, metallurgical, transport and defense industries.

From the headquarters in Cheboksary (Russia) the company operates 17 production facilities, several design bureaus located in 8 regions of Russia, Denmark and Germany. The production portfolio includes: industrial, railway and agricultural machine building, manufacturing of spare parts and OEM components and special machinery. Diversified production portfolio of the Concern guarantees broad customer base which is being promoted by five special trading-service companies in more than 40 countries worldwide through extensive dealer network of about 300 companies.[58]

The company started active internationalization processes in 2008 with acquiring 74% of shares of a German producer of autocomponents Farinia Group. After this deal the holding got an access to the flagship European technologies and such global producers as Buhler, BHS Corrugated, Caterpillar, CNH, Copeland, Cummins, Danfoss Bauer and General Electric, who were the existing customers of the German company[59].

The company is private; as for the state involvement, in different sectors of its operations it varies; for example, in the agricultural machinery construction the government does not support exporting activities and in general the average export volume in agricultural sector dropped by 27,1% in 2012[60]. In the industrial machinery construction industry the government takes a set of supporting measures which are listed in the conclusive part of this report.

OMZ Group

OMZ Group is one of Russia's largest heavy engineering companies. The group’s activities are diversified and include the following business areas: equipment for the nuclear power industry, engineering and equipment for the oil and gas industry, production of special steels and mining equipment.

The company is private; it is owned by JSC Forpost Management (46,31%), Investresource Ltd. (18,55%), OMZ B. V. (17,33%) and other private shareholders. As other companies operating in this industry, it gets support from the Russian government (financial – tax, subsides, legislative etc.). It also cooperates with a strong financial partner – Gazprombank, whose top-managers are represented in the company’s board of directors[61].

The company has been trading with CIS countries since the Soviet period of its history, which is very typical for the companies from this industry; in 2004 it went global and acquired a group of Czech steeling companies Skoda JS. It brought the company to a new level of operations together with an access to the new technologies.

Power Machines

Power Machines was established in 2000 and unified 6 large JSCs in one holding of energy-systems machinery building producers. It provides operating facilities in 57 countries and takes the 4^th place in the world in this respect.

Power Machines company is not only a large exporter of the energy systems facilities (started foreign operations in 2001 in order to integrate the global economy and expand its markets) but also possesses 100% shares of a Croatian plant “Duro Dakovic” (one of the largest European boiler equipment manufacturer) and has a joint venture with the Siemens company operating on the Russian market.[62]

The company is private and is controlled by a private capital. The major part of its shares belongs to the Interros holding (owner – Vladimir Potanin).[63]

Sukhoi