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. Last Updated: 07/27/2016

Business in Brief

GDP Up 6.6%

MOSCOW (Prime-Tass) -- Gross domestic product rose 6.6 percent on the year in January-April, First Deputy Economic Development and Trade Minister Ivan Matyorov said Wednesday.

Matyorov also said industrial production was up 6.3 percent on the year in the period.

Cell Use Skyrockets

MOSCOW (MT) -- Cellular subscribers in Russia jumped in May -- either by 1.3 million users or 1.5 million users, depending on which market analysis firm you believe.

ACM Consulting put the total number of cellular users at 23.5 million, a 5.8 percent increase from 22.2 million at the end of April. J'son & Partners, meanwhile, said the number rose to 23.7 million, a 6.8 percent increase over 22.2 million the previous month.

ACM said that Mobile Telesystems increased its lead as the nation's No. 1 provider, with 10.8 million subscribers, 3.9 million of those in Moscow. Vimpelcom, though, still leads in Moscow, with 4.2 million subscribers.

J'son & Partners said market penetration has risen to 16.4 percent of the population from 15.3 percent last month and less than 14 percent at the start of the year.

Bank Loans Up 6.1%

MOSCOW (Prime-Tass) -- The value of loans in rubles and other currencies provided by banks to companies, other banks and individuals was at 2.15 trillion rubles ($69 billion) as of April 1, up 6.1 percent from the start of the year, the State Statistics Committee reported Wednesday, citing the Central Bank.

Nestle Baby Food Plant

MOSCOW (MT) -- Swiss food giant Nestle signed a deal this week for the purchase of 100 percent of the Vologda Baby Food Factory, Hans Gueldenberg, the managing director of Nestle Food LLC, said Wednesday at an investment conference organized by Renaissance Capital.

Nestle, which leads the domestic infant nutrition market, purchased the Vologda factory from Krueger Beteiligungs GmbH and the AMELITEA Trading Company, Ltd., which held equal shares in the factory.

Alexei Krivoshapko of United Financial Group put the value of the deal at $5 million to $6 million. The factory's sales were about $9 million last year, he said.

The deal is Nestle's second announced in as many weeks. In May the company said it would invest $120 million in a greenfield instant coffee factory in Timashevsk in the Krasnodar region.

'Steel Needs $10Bln'

MOSCOW (Prime-Tass) -- The domestic steel industry needs an estimated $10 billion of investment in the next five years, the president of MAIR Industrial Group, Viktor Makushin, said at a Russian steel summit Wednesday.

MAIR is the country's largest processor of steel scrap.

Pushing Blue Stream

BAKU, Azerbaijan (AFP) -- A senior Russian diplomat on Wednesday urged Azerbaijan to export its natural gas to Turkey via Russia instead of going ahead with an alternative pipeline being planned by an international consortium.

Deputy Foreign Minister Viktor Kalyuzhny said gas from Azerbaijan's massive Shah Deniz field in the Caspian Sea could be pumped through the Blue Stream link, an undersea pipeline linking Russia and Turkey. That pipeline, inaugurated only late last year, is now standing idle because Turkey has said it did not need the gas, leaving Gazprom, which built the link, with an expensive white elephant on its hands.

"Blue Stream is not just a project but a reality. You could call it a bird in the hand. Azerbaijan can use the pipeline and from there export its gas to Europe," Kalyuzhny said at an energy conference in Baku. "If Azerbaijan did that it would mean a saving for the country of $600 million," he added.

Ruble Stronger by 7%

MOSCOW (Reuters) -- The ruble will appreciate 5 percent to 7 percent in real terms in 2004 and 2 percent to 4 percent in 2005, First Deputy Economic Development and Trade Minister Ivan Matyorov said Wednesday.

The ruble appreciated 6.8 percent against the dollar in the first four months of the year in real terms.

"We are planning that the real ruble appreciation will not be higher than 5 percent to 7 percent in 2004 and 2 percent to 4 percent in 2005," Matyorov said.

FEC Wants New Tax

MOSCOW (Prime-Tass) -- The Federal Energy Commission is proposing amendments to the Tax Code that would levy a special tax to secure funds for power sector investments, FEC Chairman Georgy Kutovoi said Wednesday.

The tax amount would be added to the power tariff, he added.

LUKoil Wants Out

BAKU, Azerbaijan (Reuters) -- LUKoil said Wednesday it was considering quitting its $300 million onshore oil project in Azerbaijan, citing high ecological risks it was facing on the depleted fields.

The move would follow a decision by LUKoil to sell its 10 percent stake in a giant Azeri offshore field to unlisted Japanese firm Inpex last year. LUKoil then said it wanted to focus on projects in which it had majority stakes.

The head of LUKoil in Azerbaijan, Fikret Aliyev, said the firm hoped to conclude talks with Azeri state oil firm SOCAR to quit the Govsany-Zykh project within two months.

"We are facing very high ecological risks, which significantly lower the project's profitability," Aliyev said.

Miller, Gref at Odds

MOSCOW (MT) -- Gazprom continues to be at odds with the Economic Development and Trade Ministry over how the gas giant should be restructured.

A ministry official said Wednesday that Prime Minister Mikhail Kasyanov had ordered Gazprom and the ministry to find common ground on restructuring by Sept. 1.

The original deadline, June 1, was missed because the volume of information that is involved is "too large," the official said.

Gazprom CEO Alexei Miller and Economic Development and Trade Minister German Gref have been at odds for months over granting private companies independent access to Gazprom's state-controlled pipeline network for exports.

Total Not Shopping

LONDON (Reuters) -- French oil major Total said Wednesday that it would be a long time before it bought a share in a Russian oil company because of concerns about governance and controls over investments.

"We are a long way away from signing up for a stake in a Russian oil company," Ian Howat, senior vice president strategy in Total's strategy and risk assessment division, told an oil and gas conference.

"We have looked very closely at all the potential companies we could do business with, including the one BP did a deal with," he added, referring to TNK.

Lust for Sao Tome Oil

LISBON, Portugal (Reuters) -- Russia and Britain said Tuesday that they want to help the tiny African nation of Sao Tome e Principe develop its rich oil reserves, Portuguese news agency Lusa reported.

"We plan to relaunch cooperation with Sao Tome e Principe, above all in the economic sector, as a way to reactivate our diplomatic relations," Lusa quoted Russia's new ambassador to Portugal, Andrei Kemasrsky, as saying.

Sao Tome and regional oil power Nigeria have drafted bidding guidelines for nine new offshore wells they are jointly developing. Studies have suggested the presence of billions of barrels of crude offshore.

South African Standard

MOSCOW (MT) -- One of South Africa's biggest banking groups, Standard Bank Ltd., announced Wednesday that it had opened an investment bank in Moscow, Dow Jones reported.

Standard Bank follows Standard Bank London's representative office, which has been in Moscow since 1997.

Baltika Eyes Sales Jump

MOSCOW (Prime-Tass) -- Baltika, the country's leading brewery based in St. Petersburg, envisages a 12 percent to 15 percent year-on-year increase in net sales this year to 184 million decaliters, financial director Alexander Nikonov said at an investors' conference Wednesday.

Operating profit is expected to climb 20 percent on the year to $230 million, he said. The company plans to boost its share of the domestic beer market by 6 percent this year, an increase from 33 percent in 2002.