Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Business in Brief

Domodedovo Hit Hard

MOSCOW (Prime-Tass) -- The Audit Chamber sees the financial situation at state-controlled Domodedovo Airlines as unstable and blames the lack of state control in the company for the fact that its management was able to appropriate almost all of the company's property, the chamber said Friday.

On Friday, the Audit Chamber's board discussed results of the inspection conducted at Domodedovo Airlines in April-July.

From 2000 to 2002, the company's fixed assets shrank by 57.3 percent, net profit fell to 82,000 rubles ($2,727) in 2001 from 10.6 million rubles in 2000, while last year the company posted a loss of 6.8 million rubles, the chamber said.

The company's management illegally appropriated almost all of the company's property, including the entire aircraft fleet, the chamber said.

As a result, they had to lease 18 aircraft to service flights.

This was possible due to an artificially created debt of 417.6 million rubles to a number of unspecified companies, the Audit Chamber said.

New RTS Record

MOSCOW (Reuters) -- The benchmark RTS index reached a new all-time closing high of 642.92 points Friday, up 0.70 percent on the day to beat Tuesday's previous record close at 640.53.

The new high came despite news that a second core shareholder of top oil producer Yukos was facing criminal charges, which tipped the oil stock into losses late in the day and brought the index down from an intraday high.

Blue chip gains leaders were Rostelecom and oil stocks Surgutneftegaz and LUKoil.

Reserves Jump $1.1Bln

MOSCOW (MT) -- The Central Bank said late Thursday that its hard currency and gold reserves rose $1.1 billion to $63.5 billion in the week ending Oct. 10.

Pipeline Decision in '04

BANGKOK, Thailand (MT) -- A decision on the route of the first far eastern export oil pipeline from Angarsk will be taken only next year, Itar-Tass reported Sunday.

It will be possible to speak about sums necessary for its construction only after the final feasibility report on the project, Deputy Foreign Minister Alexander Losyukov said in an interview, Dow Jones reported.

Losyukov said Tokyo has suggested investing billions of dollars to finance construction of a pipeline from Angarsk to Nakhodka in order to access the Asia-Pacific region, above all Japan. In the meantime, Beijing insists on fulfilling an earlier understanding on building a pipeline to the Chinese city of Daqing.

Losyukov added that China has said it is prepared to finance pipe-laying in its territory. "Incidentally, credits for its construction can be also found on Russian territory," Losyukov said.

"The situation is very competitive," he said. "However, Russia will need time to study the present versions, including an account for ecology."

World Bank Bullish

MOSCOW (Reuters) -- The economy could grow 6.5 percent this year if oil prices are steady, the World Bank's chief economist for Russia, Christof R?hl, said Friday.

"We are not changing our forecast, which is 6 percent now, but we could raise it to 6.5 percent if oil prices stay at the current level," R?hl told reporters.

The official government forecast from the Economic Development and Trade Ministry is 5.9 percent, up from last year's 4.3 percent growth.

R?hl said 2003 inflation will slightly outpace government forecasts and come in at 12 percent or 13 percent. The government says it will not exceed 12 percent.

Following Russia's receipt of an investment grade sovereign rating from Moody's Investor Services, R?hl echoed Prime Minister Mikhail Kasyanov's concern that Russia's narrow capital markets and shaky banking system could not handle a big inflow of investment.

"The rating upgrade is certainly a positive factor but the main problem is that Russia's financial and banking systems are not ready to take capital inflows," R?hl said.

KIA Kits in Udmurtia

MOSCOW (Prime-Tass) -- South Korea's KIA Motors and Russia's Izhmash-Avto, a car manufacturer based in Udmurtia, signed a contract to start assembling the KIA Spectra at Izhmash-Avto's facilities starting in November 2004, KIA Motors said in a statement Friday.

Izhmash-Avto is expected to assemble 1,000 cars in 2004 and 40,000 cars in 2005, while output is expected to reach 120,000 cars by 2007.

Currently, only the Avtotor plant in the Kaliningrad region assembles KIAs and KIA plans to continue this arrangement in the future. In January-September, Avtotor assembled 6,331 KIAs.

At present, KIA is represented in Russia by the Rio, Magentis and Shuma models, Sportage and Grand Sportage jeeps and other cars.

Brazil's VWs to Russia

SAO PAULO, Brazil (MT) -- Fighting to put its Brazilian division in the black, German automaker Volkswagen plans to begin exporting its diminutive Brazilian Gol model to yet another market -- Russia -- next year.

Volkswagen executive Berthold Kr?ger told reporters in Brazil this week that the company is negotiating a contract to send 2,000 of the economy cars to Russia in 2004.

The Gol is exported across Latin America, where it became the top-selling car in Mexico and Argentina this year. Stripped-down models of the Gol have also started popping up in China after Volkswagen signed a contract in 2002 to send 230,000 of them to that burgeoning market over the next five years, Dow Jones reported.

Caspian Port Contract

ASHGABAT, Turkmenistan (Prime-Tass) -- Russia's Vyborg Machine Building Plant signed a contract with Turkmenistan's state oil company Turkmenneft on Friday to design a project for a seaport in Okarem on the southern coast of the Caspian Sea, Turkmenneft said in a statement.

According to the agreement, Vyborg will be the general contractor and prepare a preliminary feasibility study for the seaport's construction within the next five months. This part of the project is estimated at $980,000.

Next March, the parties are to sign the general contract for construction of the port. No estimates for the port construction costs were provided.

According to Turkmenneft, the new seaport is expected to mainly transport oil produced on the southeastern coast of the Caspian Sea.

Okarem is to be Turkmenistan's second largest port after Turkmenbashi, previously known as Krasnovodsk.

Ilim Modernization

ST. PETERSBURG (Prime-Tass) -- Leading timber company Ilim Pulp plans to spend more than 70 million euros ($81 million) acquiring modern timber processing equipment over the next four years, the holding said Friday.

Total investments to upgrade the holding's equipment are expected to reach 170 million euros by 2007, the company added.

On Thursday, Ilim Pulp Enterprise held talks with Finland's Ponsse, a leading producer of timber-processing equipment, concerning the companies' mutual cooperation.

Further talks are planned for the beginning of November.

Ilim Pulp Enterprise, registered in 1992, is among the world's 10 largest companies producing and processing lumber and paper.

Ilim companies and affiliates account for 61 percent of Russia's pulp output and 77 percent of its cardboard packaging output.