Software Tops List Of Russian Investments In USA
- Jan. 13 2014 18:49
Trade and investment flow both ways. There is a small but growing Russian presence in the U.S., encouraged in part by trade promotion programs like SelectUSA.
Cumulative foreign direct investment (FDI) by Russian companies reached $7,338 million by the end of 2012. The U.S. subsidiaries of Russian companies employed more than 13,000 staff, according to figures from the U.S. Bureau of Economic Analysis.
These range from Severstal's steel operations to the light airplane producer Epic Aircraft, which acquired and relaunched Cessna's plant in Bend, Oregon, in 2012.
Software and I.T. account for most Russian businesses in the U.S. Over the ten years since 2003, Russian companies have set up 15 such projects, closely followed by metals and banking. However the role of banks is not investment but the reverse: trying to help Russian companies sell bonds to U.S. investors.
Russia's second largest steel maker bought the bankrupt Rouge Steel, formerly Henry Ford's steel operation in Dearborn, Michigan, in 2004. It invested $740 million, building a state-of-the-art blast furnace.
Russian aviation maintenance company Engineering LLC bought the high performance kit airplane company Epic, in 2012. The acquisition provided the financial stability for Epic to proceed with plans to seek Federal Aviation Administration certification for its Epic LT turboprop single. Priced at about $2 million and upwards, the plane is already sold out until 2016.
Software and I.T. are the main focus of Russian projects, such as Synqera, a Russian point-of-sale analysis company. Its tablets scan a customer's purchases and, depending on the time of day or season, offer promotions. The twist is that a camera also monitors the shopper's mood, in order to determine which coupons or further promotions to offer. The software is already in use in Russia's Ulybka Radugi chain and the company aims to announce deals in with U.S. and European retailers in coming months.
Looking at U.S. investment in Russia, it is roughly twice as high. The FDI position, including past investments that are still present, stood at just over $14 billion at the end of 2012. This was down from about $20 billion in 2008-2009, according to the U.S. Bureau of Economic Analysis and crossborder investment analysts, fDi markets. The annual flow of investment tends to fluctuate even more.
In terms of total trade flows, Russia is the 27th largest export market for the U.S. In its turn, Russia is the 16th largest exporter to the U.S., mainly through the sale of petroleum byproducts. Trade has picked up recently, growing about 30 percent between 2010 and 2012.