. Last Updated: 07/27/2016

Business in Brief

Gas Exports Up 8%

MOSCOW (Reuters) -- Gazprom said Monday that its exports to Western and Central Europe rose 8.29 percent in January-June 2003.

The world's largest gas firm, which supplies a quarter of Europe's gas, said it exported 71.76 billion cubic meters of gas in the first six months of 2003, compared with 65.81 bcm in January-June 2002.

Gazprom's exports started rising from February, as clients asked for more supplies because of a long, cold winter.

OMZ Profit Skyrockets

MOSCOW (Bloomberg) -- United Heavy Machinery, or OMZ, the nation's biggest engineering company, said earnings rose more than six-fold last year, as exports almost doubled.

Net income rose to $39 million, from $6 million a year earlier, under U.S. generally accepted accounting principles, the company said in an e-mailed statement. Sales rose 40 percent to $435 million.

In June, OMZ said it expected 2002 revenue to rise 32 percent and exceed $410 million.

Outstanding orders rose to more than $1 billion last year, from $445 million at the start of 2002, and exports increased to $155 million, the company said.

Debt Equality by 2008

MOSCOW (Bloomberg) -- Russia plans to have the same amount of foreign and domestic debt by 2008, Interfax reported, citing Deputy Finance Minister Bella Zlatkis at a conference in Moscow.

Foreign debt makes up about 82.3 percent of the country's total debt and domestic debt makes up about 17.7 percent, Zlatkis said, Interfax reported. In three years, Russia wants to reduce foreign debt to 75 percent, she said.

By 2008, Russia wants to have an equal amount of foreign and domestic debt, she said, the news service reported.

Russia, which is running a budget surplus for the fourth year in a row, has so far used the extra revenue to reduce its outstanding debt, partly by paying back some obligations ahead of schedule. As of the next year, the country plans to put its budget surplus into a fund created to help the economy weather declines in oil prices or other external shocks.

Refineries for Fields?

MOSCOW (Bloomberg) -- Belarus President Alexander Lukashenko has proposed that Surgutneftegaz, Russia's No. 4 oil producer, buy stakes in Belarus' two largest oil refineries and pay for them with Siberian oil fields, according to an interview with the president posted on NTV television's web site.

Lukashenko proposed swapping Belarus' stakes in the Naftan and Mozyr refineries for unspecified oil fields, according to NTV.

The offer "was reviewed by the government and the president of your country," Lukashenko said in the interview.

Belarus did not receive any bids in May when it offered minority stakes in state-controlled petrochemical companies worth $1.2 billion. The government offered stakes in Naftan, Polimir, a plastics maker, and two smaller chemical companies.

Alrosa, BHP Talk

MOSCOW (Bloomberg) -- Alrosa, the state-owned company that produces a quarter of the world's rough diamonds, is in talks with BHP Billiton, the world's biggest mining company, about mining mineral resources in Russia and abroad, Izvestia reported, citing Sergei Ulin, a vice president at Alrosa.

Ulin did not give Izvestia further details about the BHP talks.

BHP said in March it would expand its search for diamond deposits to take advantage of an expected rise in gem prices. The company has one gem mine, Ekati in Canada, which accounts for 6 percent of world supply.

Alrosa, based in the Sakha in the Far East, may boost annual gem cutting more than four-fold to $550 million in five years as the company expands cooperation with Russia's three largest cutters, SGUP PO Kristall, in Smolensk, and gem polishers in the cities of Barnaul and Moscow, Izvestia said.

The miner plans to increase gem production 6.4 percent this year to $1.56 billion. Cut diamonds output will increase by 22 percent to $130 million this year.

New Metro Store

MOSCOW (Prime-Tass) -- Germany retail giant Metro Cash&Carry plans to open its fifth store in Moscow by mid-November, the company said in a statement.

The $19 million store is to be built at the intersection of Dmitrovskoye and Dolgoprudnenskoye highways.

The store will have a total floor space of 15,000 square meters with a planned trading area of 8,000 square meters.

Currently the company has four stores in Moscow and two in St. Petersburg.

Earlier, Metro said it would expand its Moscow network to six stores by the end of this year.

Metro Cash&Carry GmbH is a division of Germany's Metro Group holding, Europe's third-largest and the world's fourth-largest trading company.

It has 387 stores in 23 countries.

Extra GM-VAZ Shift

MOSCOW (Prime-Tass) -- The GM-AvtoVAZ joint venture plans to switch to a three-shift working pattern this fall, Heidi McCormack, the head of General Motors CIS, told reporters Monday.

GM and leading Russian car producer AvtoVAZ each have a 41.5 percent stake in the venture, with the remaining 17 percent belonging to the European Bank for Reconstruction and Development.

The venture, which produces Chevrolet-Niva sports-utility vehicles, plans to produce more than 36,000 units this year, she said.

McCormack declined to say whether the joint venture would start producing Opel Astra cars, saying that no official decision has been made yet.

GM-AvtoVAZ started operating in September 2002.

Revisiting Oracle Deal

MOSCOW (Prime-Tass) -- The board of directors of national telecoms holding Svyazinvest on July 31 will consider the $153 million purchase of U.S.-based Oracle's enterprise resource planning software system, a spokesperson with the country's Investor Protection Association said Monday.

Earlier, the Soros Foundation, on behalf of George Soros' Mustcom Ltd., a Svyazinvest shareholder, demanded that the board justify the large price tag and its reason for not holding a tender for the contract.

Mustcom has a 25 percent plus one share stake in Svyazinvest.

Svyazinvest's other shareholders are the Property Ministry, which holds 50 percent plus one share, and the State Property Fund, which has a stake of 25 percent minus two shares.

On May 28, the Investor Protection Association held a meeting with Svyazinvest general director Valery Yashin to discuss the purchase.

As part of its planned privatization, Svyazinvest will be broken into seven regional subsidiaries.

On June 3, all of the seven subsidiaries of Svyazinvest approved the Oracle deal.

Beer Boom Subsides

MOSCOW (Bloomberg) -- The country's beer market, one of the world's fastest-growing over the last two years, should see output climb this year by 4 percent as a colder first half and an excise tax imposed at the start of the year crimp demand, Renaissance Capital said. The forecast was below its previous estimate.

The Moscow-based investment bank also cut its recommendation for Baltika Brewery, the country's largest beer producer with about 24 percent of the market in 2002, to "hold" from "buy."

Renaissance lowered its forecast for growth this year in beer output from 7 percent after the State Statistics Committee said last week that first-half production grew 2 percent to 359.5 million decaliters. The market expanded by 18 percent in 2001 and 12 percent in 2002, attracting companies such as Heineken NV, the world's third-largest brewer, which paid about $400 million to acquire the Bravo brewery in St. Petersburg in 2002.

Sibur Ups Tire Output

MOSCOW (Prime-Tass) -- The country's top petrochemical company Sibur saw its tire production increase by 9.5 percent on the year in January-June to 8.7 million units, the company's press service said Monday.

In 2002, the company produced 17 million tires, up from 15.5 million in 2001.

Sibur's tire-producing plants are Omsk-based Omskshina, the Yaroslavl Tire Plant, Volgograd region-based Voltire, Yekaterinburg's Uralshina and the Dneproshina plant, based in the Ukrainian city of Dnepropetrovsk.

Gazprom holds a 50.67 percent stake in Sibur.