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. Last Updated: 07/27/2016

Business in Brief

March Industrial Output Up

Industry output grew 4.1 percent in March compared with a year ago, Interfax quoted Economic Development and Trade Minister German Gref as telling President Vladimir Putin on Monday.

The increase was greater than analysts' expectations of 3.5 percent. Gref also said that in the first quarter of 2006 industrial output rose 3.1 percent year on year. (Reuters)

Prices Up So Far in April

Consumer prices increased 0.2 percent in the first 10 days of April, Central Bank head Sergei Ignatyev said Monday, citing State Statistics Service figures.

Consumer prices rose 0.3 percent in the first two weeks of March and were up 0.8 percent in the whole of March. The Central Bank expects the April index to rise 0.6 to 0.7 percent. (Reuters)

State Buys Worry Potanin

Metals tycoon Vladimir Potanin is worried about the state's growing participation in the economy, he told Vedomosti in an interview published Monday.

"It appears that the state is currently trying to take on more and more functions," said Potanin, head of the Interros holding. As a result, "some of these functions are starting to be carried out inefficiently," he said, Vedomosti reported. There needs to be a balance between the state's desire to protect its citizens and to create a good atmosphere for making money, Potanin said.

"A distortion of this balance worries me as a citizen and as a businessman," he said, Vedomosti reported. (MT)

Rosneft Loan Payments

Rosneft may fail in a bid to lower loan payments because two international lenders are refusing to change interest rates, Vedomosti reported, citing unidentified bankers.

Rosneft is seeking to lower the interest it pays on loans totaling $3.1 billion from banks including ABN Amro, JPMorgan Chase, Barclays Capital, Dresdner Kleinwort Wasserstein, Citigroup and Deutsche Bank, the newspaper said.

Two banks do not want to lower rates because a cut was not part of the original loan agreement, Vedomosti said. Those banks' share of the debt might be bought by other banks, the newspaper said, citing a person familiar with the negotiations.

Rosneft is planning an initial share offering later this year. ABN Amro, Dresdner, JPMorgan and Morgan Stanley are among the banks organizing the sale outside of Russia. (Bloomberg)

Surgut 2005 Profit Up 74%

Surgutneftegaz boosted net profit by 74 percent in 2005 to 114.47 billion rubles ($4.13 billion), Interfax reported Monday. In 2004, the company made a net profit, also calculated to Russian accounting standards, of 65.86 billion rubles, itself a fourfold leap over 2003.

Sales rose 48 percent to 428.74 billion rubles in 2005 from 288.06 billion rubles in 2004.

Russian accounting standards differ greatly from international standards, but they are used for calculating dividends and tax.

Surgut, which announced its proposed 2005 dividends earlier this month, does not report financials under international standards. (Reuters)

Zhizn Newspaper Sale

United Financial Group Private Equity bought a 50 percent stake in national newspaper Zhizn, Vedomosti said, citing the newspaper's editor, Timur Marder.

Zhizn has a circulation of 2.1 million and is sold in 52 towns either as a daily or weekly publication, the newspaper said. Boris Fyodorov, a former finance minister, started UFG Private Equity last year to invest in nonstate companies after Deutsche Bank bought United Financial Group, the investment bank he co-founded. (Bloomberg)

Salmon Bans Lifted

Russia confirmed on Monday that it had lifted a ban on imports of fresh salmon from two Norwegian fish farms.

"After an inspection carried out by Russian specialists in Norway with competent Norwegian services between March 27 and April 5, temporary restrictions on fresh and refrigerated fish have been lifted from two Norwegian farms -- M-394 and ST-400," an Agriculture Ministry statement said.

Moscow banned all imports of fresh salmon from Norway on Jan. 1 after government veterinarians said they had found excessive levels of cadmium and lead in them, findings Oslo has disputed. (Reuters)

Indium Output Starts

Copper producer Urals Mining and Metals, or UMMC, said Monday that it had began output of rare metal indium, which is used in high-tech television and computer screens.

Raw indium, refined as a byproduct of lead, is produced at the company's Elektrotsink plant in Vladikavkaz, in the North Caucasus, UMMC said in a statement.

Elektrotsink, bought by UMMC in 2003, is Russia's second-largest zinc producer. It stopped refining indium in 2000. (Reuters)

Polimetall Gold Output Up

Polimetall increased gold output in the first quarter as prices for the metal jumped to the highest in more than 20 years. Silver production fell.

Polimetall's gold output rose 13 percent to 58,000 ounces, the company said in a statement posted on its web site. Silver production fell 9 percent to 4.26 million ounces. (Bloomberg)

Highs for Gold, Silver

TOKYO -- Gold surged to a new 25-year high on Monday, buoyed by concerns over Iran's nuclear ambitions and surges in oil prices, while silver powered to its highest since May 1983 on hopes for the first silver exchange-traded fund.

Hedge funds and operators investing in the short term were anxious about shifting their funds into gold and silver for the purpose to diversify and to raise higher returns.

Spot gold rose as high as $606.10 per ounce -- the highest since December 1980, while silver rose to $13.33 per ounce, its loftiest since May 1983. (Reuters)

Rosno Seeks Acquisitions

Rosno, the insurance arm of Sistema, plans to search for acquisition targets locally and in other former Soviet states, its new head said on Monday.

"Market consolidation is the most important phase, and … we are on a hunting path and will watch for candidates for acquisitions," Rosno general director Levan Vasadze told a news conference after his appointment.

Rosno, which Sistema wants to float in 2007, is 47 percent owned by Germany's Allianz.

Vasadze said that Rosno was interested in large companies with annual premiums of no less than $100 million and which did not have a loss under international accounting standards in the last six months. (Reuters)

Domodedovo Traffic Up

Domodedovo Airport, which last year surpassed Sheremetyevo Airport as the nation's busiest landing spot, served 17 percent more passengers in the first three months of 2006 than in the year-ago period.

Domodedovo, which is closely held by the private East Line Group, handled 2.7 million passengers, or 17 percent more than in the same period last year, the company said Monday in a statement.

International traffic grew 16 percent to 1.4 million passengers, and domestic traffic increased 19 percent to 1.3 million passengers. (Bloomberg)

67% of CDs Are Pirated

Counterfeit compact discs account for 67 percent of the country's audio and video market, Interfax reported Monday, citing the head of the Russian State University of Intellectual Property.

More than 224 million CDs and DVDs were sold in Russia last year, causing damages of as much as $230 million, the news agency said, citing Ivan Bliznets.

That figure is less than the $1 billion in damages estimated by U.S. experts, Interfax said. (Bloomberg)

Interros Investment

Investment firm Interros plans to invest $500 million to $1 billion in its real estate business Open Investments, Vedomosti on Monday quoted Interros head Vladimir Potanin as saying.

"Mortgages will be a hit for financial organizations," he said. "That is why we are planning to invest very serious funds in Open Investments -- from $500 million to $1 billion."

Potanin said the focus of the property boom would be gradually shifting from Moscow and St. Petersburg to the region. He said that Open Investments would participate in the construction of roads, ports and airports. (Reuters)

Park City Progressing

Construction work on the elite Park City residential development is set to begin in early 2007, following its approval at a public hearing last month.

"We'll be on the site with new construction in March of 2007," Gary Wentworth, managing director of Park City, said by telephone on Friday.

The project is to include 200,000 square meters of residential property and 10,000 square meters of commercial space on the 15-hectare site behind the Ukraina Hotel that includes the historic Badayevsky Brewery and the Sacco & Vanzetti pencil factory.

Finance and construction company PIK Group has said it is planning to invest $600 million in the project. (MT)

Western Fund Eyes Housing

A special investment company owned by Deutsche Bank is to become the first Western structure to invest serious money into building housing in Russia, Vedomosti reported Friday, citing several market players.

The fund, formed in cooperation with St. Petersburg builder RBI, plans to invest about $470 million in the next three years, the report said. (MT)

Baltic Pearl Begins

The first building of St. Petersburg's huge Baltic Pearl residential development is to be completed by the end of the year, vice governor Alexander Vakhmistrov told journalists Monday.

"Work is moving very slowly, but it is moving,"said Vakhmistrov, Interfax reported.

The plan involves the development of 180 hectares in the Krasnoselsky area of St. Petersburg at a reported cost of $1.5 billion. (MT)

For the Record

Alcoa Russia, a subsidiary of the world No. 1 aluminum producer Alcoa, opened a new $6 million production line at Samara Metallurgical Plant on Monday, the company said in a statement. The line, producing sheet metal for cans, is part of the company's investment program to upgrade Alcoa's Russian facilities, which were acquired in 2005, the statement said. (MT)

Oil products pipeline monopoly Transnefteprodukt will start using its diesel export terminal at the Baltic Sea port of Primorsk in the third quarter of next year, the firm's head said on Monday. "It will most likely be in the third quarter of 2007," Sergei Maslov told reporters. (Reuters)