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MOSCOW, August 22 (RIA Novosti) Russia and America no partners in high technologies/ Russian WTO accession negotiations may be drawn out/ India's Ranbaxy Lab to get access to Russian medicine orders/ Rosneft keen to be vertically integrated

(RIA Novosti does not accept responsibility for the articles in the press)

Izvestia

Russia and America no partners in high technologies - expert

The sanctions imposed by the U.S. Department of State on two Russian companies - Rosoboronexport and Sukhoi - are not going to have a lasting economic effect on them. But Moscow should give some deep thought about viewing Washington as a high technologies partner, Russian experts told the paper.
The sanctions were imposed over alleged cooperation between the Russian arms makers and Iran. Moscow issued a tetchy response to Washington's moves. It said it had no intention of bowing to domestic American legislation and promised to reciprocate. For example, it threatened to punish U.S. aircraft corporation Boeing, which has a vital stake in Russia worth billions of dollars, including in cooperation with Rosoboronexport and Sukhoi.
Last week a Boeing vice-president met with Vladimir Putin. The resultant announcement was that the sanctions did not apply to civilian interests. In other words, Boeing will buy titanium in Russia for its airliners. This is almost 40% of what it needs to manufacture the latest Boeing-787s. And Sukhoi will, after all, receive American components for its Super Jet 100.
"We cannot cooperate with the United States in high technologies," said Ruslan Pukhov, director of the Center for Analysis of Strategies and Technologies. "The economic effect of sanctions will only be felt in 10 to 15 years from now, not now. The Super Jet assembled from American components may be banned from sales in some countries on the initiative of the Department of State. As America has already done with Brazil's Embraer aircraft."
"The purpose of the sanctions is apparent enough - to price Russian producers out of promising international markets," said Sergei Yakimov, deputy director of the Federal Service for Technical and Export Control. "It is a desire to cast a pall on Russia's fulfillment of its international non-proliferation commitments."
Despite seemingly strict export rules, Western countries are up to their ears in doubtful deals. In the mid-1980s, Washington backed Al-Qaeda. EU countries, in defiance of a U.S. embargo, sell weapons technologies to China. If Russia is ousted from the Iranian market, France and Germany will immediately step in. Leonid Ivashov, vice-president of the Academy of Geopolitical Sciences said that Moscow should merely ignore Washington, and act contrary to the U.S. line.

Vedomosti

Russian WTO accession negotiations may be drawn out

Russia and the United States, which fell out over the talks on Russia's accession to the World Trade Organization at the G8 summit in St. Petersburg, have started going down the road of exchanging threats. This confrontation is killing the chances of completing the talks by October. Experts told the paper they might be drawn out indefinitely.
Russian Agriculture Minister Alexei Gordeyev added fuel to the fire yesterday. He told President Vladimir Putin in Sochi, a resort city on the Black Sea coast, "The Agriculture Ministry is prepared to notify the United States of its intention to revise the volume of privileges regarding poultry meat imports to Russia."
The privileges had been granted to the U.S. during the WTO accession talks. Since the talks have come to a halt, there seems to be no reason for the privileges, Gordeyev said.
Sergei Dankvert, head of Russia's veterinary watchdog, showed Monday that the negotiators' concern for the health of Russians was not hypothetical. His service prohibited the import of poultry meat from Michigan, where an outbreak of avian flu had been registered.
Russians eat slightly more than 2 million metric tons of poultry a year. The import quota is 1.09 million tons. The main suppliers of poultry meat are the United States (74% of the total volume) and the European Union (18%).
According to a source in the Kremlin administration, the sharp statements made by Russian officials do not mean that the signing of the WTO accession protocol will be postponed indefinitely. "The Americans said October was the deadline, and we still expect to meet it," he said. The issue of poultry import quotas could be revised.
This is not a threat, but "a normal policy of a normal state," said a source in the Russian WTO accession delegation. "We have our own interests, which we have the right to protect because we do not have any benefits from WTO membership so far."
Russian Economic Development and Trade Minister German Gref said the bilateral protocol on accession should be signed before spring, because otherwise the talks would be drawn out as the new election cycle would begin in Russia and the U.S. The powers of President George W. Bush to sign trade agreements that Congress approves or rejects without amending will expire in July 2007.
But the more threats the two countries hurl at each other, the less chance there is that an agreement will be signed, said Yaroslav Lisovolik, chief economist at Deutsche UFG.

Gazeta.ru

India's pharma major Ranbaxy Lab to get access to Russian medicine orders

Ranbaxy Laboratories Ltd, India's largest pharmaceutical company, intends to buy Russia's leading drug producer Akrikhin for $100 mln. Analysts told the paper the Indians need not so much the Russian company, as its access to state medical orders.
The Russian market of medicines is valued at $9 billion and has been growing by about 8% a year.
The acquisition of Akrikhin fits in with the strategy of Ranbaxy, India's largest pharmaceutical company by sales. Ranbaxy has been pursuing an aggressive policy in foreign markets, and intends to jump from 48th to fifth place on the global pharma market by 2012.
Akrikhin, which is one of Russia's top five producers of medicines, turns out about 140 types of drugs. Its 2005 revenues totaled $59 million and its capitalization according to marketing agency DSM Group is $67.5 million.
Experts say Ranbaxy intends to get a broader foothold in the Russian market, where it earned $33 million last year. It also wants to get additional revenues from Akrikhin's state contracts, which account for at least 45% of its turnover, according to the RMBC marketing consultancy.
Akrikhin is participating in the state program for additional supplies of medicines, which has accelerated the growth of the Russian pharmaceutical sector by 30-35%.
"Ranbaxy's interest for Akrikhin is obvious, because the Russian government has adopted a policy of encouraging national producers," said Alexander Kuzin, director general of DSM Group.

Biznes

Rosneft keen to be vertically integrated

Rosneft Oil Company is buying back stocks from shareholders opposed to pooling the company's assets. But not all of the holders are pleased with the asset-swap plan: Newport Capital Ltd. intends to sue for repeal of the consolidation. Experts, however, told the paper that they did not think the Australian company would succeed.
Newport Capital Ltd., which owns 1.5% of Russia's Komsomolsky oil refinery, has filed an action against the enterprise and Rosneft, demanding that a decision to consolidate by joining the refinery to the state-run company through a share swap be annulled. Alexander Salomakhin, director of Newport Capital Ltd., said Komsomolsky was heavily underpriced compared with its market value. Deloitte & Touche auditors estimated Komsomolsky, which has a refining capacity of 5.7 million metric tons (41.9 million bbl) of crude a year, at $40 million, whereas the smaller Tuapse refinery was evaluated at $373 million.
Salomakhin said after Rosneft taking over the plant in 2001 its earnings dropped from $130 million to $58 million in 2004, and profits went down from $2.98 million to $430,000. The volumes of refined crude, though, rose from 3 million to 5 million metric tons a year.
Experts told the paper that a drop in earnings despite growing volumes is typical at Russian refineries. "Plants process free-issue crude, and as a result their profits are practically zero," said Konstantin Cherepanov of Rye, Man & Gor Securities. "This scheme is applied in vertically integrated companies. Refineries are rewarded exclusively for refining services, that is, they receive only payment for processing. If they bought crude and sold refined products at market prices, their profits would be much higher."
Analysts said the Rosneft consolidation would be conducted quietly. "Newport's action seems to be an isolated case. The other minority holders have accepted the consolidation," Cherepanov said.
Legal experts added that a displeased minority holder was unlikely to change Rosneft's plans. Albert Yeganyan, managing partner of law firm Vegas-Lex, said: "The success, if any, of such companies depends on their stake in the enterprise concerned and their corporate experience. Judging by Newport's share, it is doubtful if the company has enough practice in such affairs."

 

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