Russia is part of the emerging BRIC economies, but market entrance is significantly less enthusiastic than in China or India. The market is still seen by many as risky and volatile. A new ARC report describes the main dynamics that drive investment in automation in Russia.
The development over the last few years was volatile and this will continue due to highly centralized political decision making, ups and downs in investment, dependency on the oil price, red-tape, challenges in the banking sector, the WTO entrance, and documentation requirements, among others. In addition, the sheer size of the country, the differences in culture, and corruption threaten business success.
Still, according to ARC, there are immense opportunities in Russia: The power sector is expected to boom over the next few years, the chemical industry needs modernization, and the automotive industry is in a strong expansion mode. These markets are all expected to achieve double digit growth rates in the forecast period. And of course, there is oil & gas. This is by far the biggest vertical and even though a lot of modernization and big investments have already taken place, there are huge opportunities in this sector for all suppliers.
Across most industries the production equipment is old and with the WTO entrance, industries in Russia have only two choices: Modernize or depend on imports.