Russia and Italy: Doing Business Together · Russia and Italy: Doing Business Together 07 Top 10 Italian Exports to Russia* Nuclear reactors, boilers, equipment and mechanical devices

Russia and Italy: Doing Business TogetherDeloitte CIS Research Center, 2017

Russia and Italy: Doing Business Together

02

Contents

Introduction 03

Key findings 04

Key macro indicators 05

Trade structure 06

Market overview 08

Prospects of cooperation 14

Communication opportunities 22

Appendix: Top subcategories

of Russian-Italian trade 26

Contacts 30


03

Introduction

Despite the challenging situation of the last several years, the outlook for Italy–Russia economic ties looks very promising: the key macro indicators are on a positive upswing and the overall business climate is improving.

If we look at the top export positions of Italy and Russia, we will come to a conclusion that the two countries have enormous potential to boost their cooperation in a variety of spheres. Russia’s exports are dominated by commodities, while Italy’s are mostly products of deep processing or hi-tech. Apart from its natural resources, the strongest side of Russia is its knowledge output, the strongest sides of Italy are its sustainability, commerce, competition and market scale.

For the Russian business, the biggest opportunity is export of liquefied natural gas: global demand is expected to double by 2030 and Italy will be one of its top consumers. In addition to that, Russian companies could benefit from collaboration with Italian companies to implement deep processing technologies in oil refining and steel production.

For Italian companies, the opportunities are in pharma and auto exports as these two sectors are expected to continue growing in Russia. The agricultural sector can be interesting too: R&D centers and universities all over Russia offer a variety of innovation technologies, but local demand remains very low (most Russian agri companies declare their interest, but are reluctant to actually implement them), so there could be a market for them in Italy.

There are a lot of other areas where successful partnerships can be established: from wine production to aviation. Despite the barriers that exist, the two nations have long-standing cultural ties and are mentally close, so all the preconditions for positive and constructive dialog are already in place.


04

Key findings

The forecast of GDP growth in Russia for 2017 is 2.1 percent (baseline scenario), for 2018–2020 annual growth is expected at 2.1–2.3%.

In 2017, GDP of Italy is expected to increase by 1.5 percent in real terms. In 2018, GDP is estimated to increase by 1.4 percent driven by growth in domestic demand.

Share of Italy in Russian exports is 4.19 percent, making it Russia’s 6th largest trading partner.

Share of Russia in Italian exports is 3.86 percent. This makes Russia Italy’s 13th largest trading partner.

2.1 % 3.86 %1.5 % 4.19 %

Top 3 Russian exports to Italy

• Mineral fuels, petroleum and distillates, bituminous substances, mineral waxes

• Ferrous metals

• Precious metals, precious stones, bijouterie, coins, pearls

Top 3 Italian exports to Russia

• Nuclear reactors, boilers, equipment and mechanical devices

• Pharmaceutical products

• Electrical machinery and equipment; sound-recording and sound-reproducing apparatus

Top 3 Russian companies in Italy

• Lukoil

• Russian Railways

• Gazprom

Top 3 Italian company in Russia

• DKC

• Parmalat

• Ariston


05

Key macro indicators

2013

2015

2014

2016

1,993

1,015

1,660

929

2013

2015

2014

2016

2,094

2,113

2,097

2,132

The forecast of GDP growth in Russia for 2017 is 2.1% (baseline scenario), for 2018–2020 annual growth is expected at 2.1–2.3%.

Expectations for inflation for 2017 were reduced to 2.5–2.8%. The forecast for inflation for 2018–2020 is at 4%.

The economy’s recovery has gathered momentum as rising oil prices and solid gains in consumer and business confidence are feeding into higher domestic demand. These dynamics are expected to remain in place in the near term, although the current momentum is likely to run into long-standing structural constraints. Overall, growth is forecast to remain moderate and close to potential at around 1.5% over the forecast horizon.

In 2017, the country’s GDP is expected to increase by 1.5 percent in real terms. In 2018 GDP is estimated to increase by 1.4 percent driven by growth in domestic demand.

HICP inflation is expected to accelerate to 1.4% in 2017 and 1.3 % in 2018, from around zero in 2014–2016, mainly due to higher energy prices.

Italy’s economic recovery accelerated in 2017, supported by external and domestic demand, but fading tailwinds and lower medium-term growth prospects are expected to moderate growth towards the end of the forecast period. Non-energy industrial goods and services prices are set to drive higher headline inflation, while wage pressures remain limited. The general government headline deficit is predicted to slightly decline over the forecast period while the debt-to-GDP ratio is not expected to fall below 130%.

Russia’s Real GDP, USD bln Italy’s Real GDP, USD bln

Inflation in Russia, % Inflation in Italy, %

2013

2015

2014

2016

6.5

12.911.4

5.4

2013

2015

2014

2016

1.2

0.10.2-0.1

Central Bank of Russia key rate, % ECB Interest rate, %

Source: Russian ministry of economic development, Istat, Country Report Italy 2017. European Commission, World Bank

Jan

2013

Jan

201

7

Jan

2014

Jan

2015

Jan

2016

1

0.5

0

Jan

2013

Jan

201

7

Jan

2014

Jan

2015

Jan

2016

20.0

15.0

10.0

5.0

0


06

Top 10 Russian Exports to Italy*

Mineral fuels, petroleum and distillates, bituminous substances, mineral waxes

Ferrous metals

Precious metals, precious stones, bijouterie, coins, pearls

Aluminum

Paper and cardboard; products from paper weight, paper or cardboard

Wood; charcoal

Grain Caoutchouc and rubber

Fertilizers Raw skin (except natural furs) and chamois leather

1Q 2

016

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017

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165 162181132 120

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2,647 3,1822,6932,1392,7082,443 2,720

Trade structure

Source: Federal Customs Service, Trading Economics

Italy in Russian trade structure(2016, mln USD)

Share of Italy is 4.19 percent and 4.3 percent in Russian exports and imports respectively, making it Russia’s 6th largest trading partner.

285,674

11,973

Export

182,267

7,840

Import

Russia

Italy

, USD mln


07

Top 10 Italian Exports to Russia*

Nuclear reactors, boilers, equipment and mechanical devices

Pharmaceutical products

Electrical machinery and equipment; sound-recording and sound-reproducing equipment

Plastics and plastic products

Footwear, gaiters and similar wares Wares of ferrous metal

Alcoholic and nonalcoholic beverages, vinegar

Devices: optical, photographic, cinematographic, measuring, control, precision, medical or surgical

Essential oils and resinoids; perfumes, cosmetics or bathroom accessories

Clothing and clothing accessories

1Q 2

016

1Q 2

017

2Q 2

016

2Q 2

017

3Q 2

016

3Q 2

017

4Q 2

016

156 15316189

154144 145

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016

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017

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016

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017

3Q 2

016

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017

4Q 2

016

100 14313886 105112191

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016

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016

107 12110785 90105 125

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59 776964 8689 117

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67 878256 7068 86

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56 6910839 5753

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592845724

457 588637884

*Detailed statistic could be found in appendix

, USD mln

Share of Russia in Italy’s exports is 3.86 percent, making it the country’s 13th largest importer.

Share of Russia in Italian imports is 7.7 percent, making Russia Italy’s 9th biggest import market.

Russia in Italian trade structure(2016, mln USD)

203,489

7,840

Export

159,696

11,973

Import

Italy

Russia


08

Market overview

Top Russian companies in Italy*

Source: Hoovers

* Includes companies where foreign shareholders control at least 25%.

Brand Industry

1 Lukoil E&R

2 JSC Russian Railways CBT

3 Gazprom E&R

4 CONTARINI MFG

5 AFK Sistema FSI

6 Velko group MFG

7 Rostekh MFG

8 Mikran RE

9 Azimut CBT

10 Transaero (S7) CBT

11 Lanit TMT

12 Mossa Engineering MFG

13 Tandem Aero CBT

14 Alkor-Bio Pharma

15 S7 Airlines CBT

16 EUROCAF company CBT

17Russian Maritime Register of Shipping

MFG

18 VTB group FSI

19 PWT company MFG

20 Mir Avto MFG

The first position of the Top Russia companies in Italy by annual revenue is held by Lukoil PJSC.

ISAB S.r.l. is Lukoil’s Italian subsidiary. Its main line of business is oil refining.

The second position of the Top Russia companies in Italy is held by Government of the Russian Federation (represented by Gefco Italia SPA).

The Gefco Italia SPA is a global logistics company for manufacturers. Gefco is 75 percent owned by JSC Russian Railways, which, in turn, is wholly owned by the Russian government.

The 3rd position of the Top Russia companies in Italy is Gazprom PJSC.

In 2016, Italy was Gazprom’s third biggest Western European client by supply volumes. ENI is Gazprom Group’s main partner in the Italian market. Promgaz JSC is their strategic alliance, which Gazprom and ENI jointly implemented the Blue Stream project is intended for direct gas deliveries to Turkey.

12

3


09

Top Italian companies* in Russia

Source: Spark interfax

* Includes companies where foreign shareholders control at least 25%.

Brand Industry

1 DKC MFG

2 Parmalat CBT

3 Ariston MFG

4 Sealed Air MFG

5 Vesta Candy group MFG

6 Benetton Group CBT

7 TEDDY S.P.A CBT

8 Barilla Group CBT

9 Camozzi Group MFG

10 MidUral Group MFG

11 MaireTecnimont RE

12 Zambon MFG

13 Coeclerici Group MFG

14 Prada CBT

15 IK INSULATION GROUP MFG

16 Promtorgservice CBT

17 Technip Group RE

18 LLC BVK MFG

19 Arneg Group MFG

20 Zuegg MFG

The Top-20 list of the biggest Italian companies working in Russia is dominated by the manufacturing and consumer sectors. The companies on the list are ranked by their revenue.

Association of Italian Entrepreneurs in RussiaThe Association unites Italian companies from all the major economic sectors and includes small, medium and large enterprises. Among its members are leading Italian and global brands, leaders in sales, production and business innovation.

For example, one of the Top Italian companies members is Parmalat LTD (second position of the Top): Parmalat consist of Parmalat LLC and BMK JSC (Belgorod Dairy) Combine.


10

Top Russian–Italian M&A deals in 2016–2017

Target company Industry Bidder company Seller company Value (USD, mln)

Wind Telecomunicazioni S.p.A.Wind Tre Italia SpA*

TMT VIP-CKH Luxembourg Sarl

VEON CK Hutchison Holdings Limited

11,855

St Peter Line CBT Moby S.p.A. 112

Redaelli Tecna S.p.A. MFG Teufelberger Ges.m.b.H. JSC Severstal-metiz 50

RTC (51% Stake) MFG Sira Industrie S.p.A. 22

Perugia OOO (62% Stake) CBT Brunello Cucinelli S.p.A. Victoria Vasilievna Saava (Private Investor)

7

SuperJet International SpA (41% Stake)

MFG Sukhoi Civil Aircraft Company (SCAC)

Leonardo-Finmeccanica SpA

N/A

RusEnergoSbyt Ltd. (49.5% Stake)

E&R Enel S.p.A. ESN Group N/A

Hutchison Holdings Ltd., parent company of 3 Italia S.p.A., and VimpelCom Ltd., parent company of Wind Telecomunicazioni S.p.A., have completed the transaction to combine their businesses in Italy. 3 Italia and WIND are now formally under the joint ownership of CK Hutchison and VimpelCom. Through the combined business, CK Hutchison and VimpelCom have created a new operator in Italy, serving over 31 million mobile and 2.7 million fixed line customers. The joint venture is well-positioned to become a truly converged operator through its cooperation with Enel Open Fiber. The transaction is among the largest M&A transactions in Italy since 2007.

Moby S.p.A, an Italy-based company that provides maritime transportation services, has agreed to acquire an undisclosed stake in St Peter Line, the Russia-based maritime transportation company, for EUR 100m. With this transaction, St Peter Line expects to enhance its revenue by attracting Italian tourists. The companies will partner in tourists exchange, operational structure and administration. It is expected that St Peter Line will change its vision for development and strategy for improvement of market share. Post transaction, St Peter Line will retain the possession of its vessels and Moby will manage them. St Peter Line currently manages two ferries: Princess Maria and Princess Anastasia.

PAO Severstal, a Russian vertically-integrated steel and steel-related mining company, announced that its subsidiary, JSC Severstal – Metiz, an international metal ware manufacturer, has entered into a definitive agreement with Teufelberger Wirerope GmbH, a leading international metal wire ropes producer based in Austria, for the sale of Severstal's subsidiary company Redaelli Tecna S.p.A. The transaction is expected to complete in first half of 2017, subject to receipt of antitrust clearances and other customary closing conditions as agreed by the parties. Rothschild is acting as financial adviser to Severstal in connection with the sale.

Source: Mergermarket


11

Possible M&A's

Headline Sector Company Stake (%) Opportunity

Giochi Preziosi owner buys out Ocean Gold for EUR 63.15m

CBT Deloitte, Giochi Preziosi S.p.A., Giochi Preziosi S.p.A., Enrico Preziosi (Private Investor), VTB Capital AO, Gattai Minoli Agostinelli & Partners, Oceanic Gold Global Limited

42 Enrico Preziosi, the controlling shareholder of Giochi Preziosi, an Italian toy company, has acquired the 42% stake in Giochi held by Chinese group Ocean Gold Global. Preziosi is now likely to look to sell on this stake to another investor. There is also a possibility that a majority stake could be sold. Russian bank VTB is a possible buyer. The item said that negotiations on the matter are being brokered by financier Carmine Villani, who is acting on behalf of VTB.

Rosneft acquires 30% stake in Zohr oil field

E&R Eni S.p.A., Rosneft Oil Company OAO, Zohr oil field

30 Rosneft to execute option to acquire further 5% from Eni. It intends to execute an option to purchase an additional 5% Zohr gas project in Egypt from Italy’s energy group Eni, bringing its ownership to a 35% stake. According to the report, Rosneft closed the deal to acquire a 30% stake in Zohr on 9 October, for which it paid USD 1.125bn plus a historical cost compensation. According to Kommersant estimates, which are based on Eni's data, the cost of 30% in the project for Rosneft, taking into account historical costs, could reach USD 1.9bn.

Nacimbio, Pharmstandard, Kedrion to form JV for production of pharma products from blood plasma

Pharma Kedrion S.p.A., Pharmstandard JSC, Russian Technologies State Corporation, National Immunobiological Company, Kirov Plasma

more than 30% inclusive

The companies have signed an agreement to create a joint venture called Kirov Plasma. Kedrion Biopharma owns a 25% stake in the the company, while Nacimbio and Pharmstandard own 37.5% stakes each. Kirov Plasma plants to start producing medicinal products from the human blood plasma on its plant in Kirov.


12

Best cases of cooperation

In 2014, a joint Russian–Italian metalware plant, SP Konar-Chimolai, was opened in Chelyabinsk. Total investments into the project was about RUB 2 billion. According to the speaker of the regional administration at the time, the opening created 500 jobs, and the regional treasury will be able to receive more than 125 million rubles of tax deductions per year.

The largest projects for the plant in Russia right now are the Football World Cup stadiums in Volgograd and Nizhny Novgorod.

Enel S.p.A in 2018 will begin construction of a wind farm on the Azov sea coast in Rostov region. The wind farm will be located on the territory of the former Azov City gambling zone covering 133 hectares. The planned production capacity of the park is over 90 MW. The project will generate about 300 GWh per year.

In October 2017, Enel agreed on cooperation in the field of clean transport, including the rental of electric vehicles and the creation of a network of charging stations in Russia.

There has been an industrial cluster in the territory of the special economic zone of Lipetsk ("SEZ Lipetsk") since 2012. Among its residents are several Italian companies:

• OOO "SEST-LYUVE" (production of heat exchangers, evaporators and condensers). Total investment is RUB 1 billion.

• OOO Fenzi (production of pressurizer for double-glazed windows). Total investment is RUB 436 million.

• Alu-PRO LLC (production of aluminum profiles and sealant for double-glazed windows). Total investment is RUB 340 million.

• Fondital SERVICE (production of radiators and boilers). Total investment is RUB 2.52 billion.

Source: cheladmin.ru, http://jvkc.ru, РБC, sezlipetsk.ru, gmpnews.ru, www.russiaprivet.org, provladimir.ru


13

On June 8, 2017, Palladio BNM opened a factory for the production of packaging for pharmaceutical and cosmetic products in Obninsk.

The plant became the sixth and the largest pharmaceutical and cosmetic packaging company of the international company Palladio Group and another resident of the Obninsk platform of the pharmaceutical, biotechnology and biomedical cluster. Over 10 million euros have already been invested into the project and it is expected that total investment will top 17 million euros. The first production stage is already in operation. The plant's total area will be 12,500 sq m and it will employ 200 people.

In early March 2017, Italy’s Laminam opened a 14,000 sq m Lamin Rus plant park to produce large-size superfine ceramic plates on the territory of the Kaluga Vorsino industrial park. According to the Kaluga regional development agency, the new company, which invested about 25 million euros into the project, is the first and so far the only manufacturer of large-format ceramic plates in Russia.

Zoppas Industries launched production of elements for electric heaters at an industrial park in Stavrovo, Vladimir region. The Italian company has invested RUB 600 million into equipment and reconstruction of a factory (formerly ATO Plant). The enterprise now employs 40 people and is run by a team of Italian managers.

The company currently produces heating elements for household appliances and the Italians are considering expanding production. In 2018, it plans to increase capacity threefold and to start supplying equipment to Russian Railways, as well as to space and aircraft industries.


14

Prospects of cooperation

Italian consumption of key Russian export products

Oil: Italian consumption, growth (percent)

Liquefied natural gas (LNG): Italian consumption, growth (percent)

Natural gas: Italian consumption, growth (percent)

Oil consumption has been driven by low global prices in recent years, but this momentum is beginning to ebb.

The Economist Intelligence Unit expects demand growth to remain modest in 2018–19, despite firm economic growth: growth will slow from 1.9% in 2017 to an average of 0.6% per year.

The Economist Intelligence Unit forecasts strong LNG import growth of almost 9% per year in 2018–19. Imports of LNG rose by 10% year on year in the first half of 2017 due to several cargoes shipped from the US. The EU has considerable excess regasification capacity, which means that it is well placed to absorb the expected surge in global LNG supply in 2018–19.

The Economist Intelligence Unit expects natural gas demand to rise by an average of 1% per year in 2018–19, down from a 5.4% annual increase in 2016, when weather factors and a big increase in the use of natural gas for power generation pushed average demand growth up. IEA data show that in the first eight months of 2017 alone demand grew by 9.7%.

With unemployment falling to multi-year lows and euro zone GDP growth reaching its fastest rate since the onset of the financial crisis in 2007, oil demand rose by an average of 1.8% year on year in the first nine months of 2017. Nonetheless, expected demand to replicate the growth seen in 2016 (2.1%), when oil prices slumped and vehicle sales rose quickly.

The 16.5 m t/y Yamal LNG project in Siberia is operated by Novatek. The first cargo was shipped in November 2017. The second and third trains are to be launched in the second half of 2018 and 2019 respectively.

Russia’s Gazprom is capitalizing on the rising European demand. The company estimates that its exports to Europe rose by around 8.6% year on year between January and November 2017. This follows a year-on-year rise of 12.5% in 2016, giving the company a market share of about one third. Gazprom is planning to complete the Nord Stream 2 pipeline by the end of 2019, which would increase its export capacity by 55 bcm/year.

1. Mineral fuels including oil

2016

2018

2017

2019

1.59 0.98

1.92

0.21

2016

2018

2017

2019

2.48

8.31

9.39 9.4620

16

2018

2017

2019

6.77

0.71

4.13

1.24

Source: The Economist Intelligence Unit


15

Crude steel equivalent Italian consumption: growth (percent)

Strong automotive sector has provided support for steel demand, as this sector accounts for almost 20% of regional consumption in Italy. New vehicle registrations were up by 3.9% year on year in January–October 2017, while declining unemployment has boosted demand in consumer-oriented sectors such as appliances.

The Economist Intelligence Unit expects steel demand to grow by 1.5% in 2018 and by another 2% in 2019, which is still below the 2017 growth estimate of 2.3%. Within the EU, Italy is among the fastest-growing areas for demand, as infrastructure expenditure and relocation of manufacturing support steel consumption.

Italian demand for physical gold is driven by investors who are keen to capitalise on rising prices, but demand for physical gold in other markets tends to be weaker when gold prices rise, as consumers remain wary of physical purchases when gold is seen as expensive.

The fact that physical gold purchases remained relatively low and stable during 2014–17 despite the shifts in prices indicates that Western investors are perhaps starting to channel purchases through gold ETFs rather than through physical deals (bar and coin demand in Europe, for example, actually fell in 2016, despite higher prices).

On balance, The Economist Intelligence Unit expects a rise in gold prices in 2018 to lift net retail investment slightly, before a modest fall in 2019.

2. Iron, steel

3. Gold metals

Our expert opinion about prospects of cooperation:

Good prospects

Certain prospects

Uncertain prospects

2016

2018

2017

2019

1.591.47

2.292.03


16

Russian consumption of key Italian export products

Light vehicle registration in Russia, growth (percent)

Electrical machinery, equipment in Russia: growth (percent)

In August 2017, the passenger car and LCV market saw a 16.7% year-on-year gain. Growth in January–August accelerated to 9.6%, from 6.9% in the first half. The Economist Intelligence Unit expects the country’s moderate economic recovery, combined with pent-up and replacement demand as well as government support for the market, to push full-year growth to 14.2%.

Currently the Russian market for electrical machinery and equipment is demonstrating positive dynamics after a recession in 2016. Italy’s exports of electrical and electronic equipment to Russia totaled USD 355 mln in 2016.

With the recovery expected to gather momentum in 2018, before achieving a more sustainable pace, The Economist Intelligence Unit expects sales growth to average 10.5% per year in 2017–21.

The Economist Intelligence Unit forecasts that Russian consumption will show average growth of 4.8% in 2017–2019.

1. Vehicles

2. Electrical machinery

2016

2018

2017

2019

-11.1

19.114.2

9.6

-4.7

5.24.7 4.4

-2.16.86.3 6

2016

2018

2017

2019

Source: The Economist Intelligence Unit

Electrical appliances & houseware

Household audio & video equipment


17

Pharmaceutical sales in Russia: growth (percent)

Imports grew strongly as well. Germany is by far the largest source of pharmaceuticals for Russia, followed by France, Italy, the UK and India. In January–May 2017 pharma imports grew from US$3.2bn to US$4.1bn.

Growth in spending on pharmaceuticals will continue as the economy recovers and incomes rise.

The Economist Intelligence Unit forecasts that pharmaceuticals sales will grow at a CAGR of 8% during 2018–22, outstripping overall health sector growth. Growth will be affected by shifts in exchange rates, given Russia’s dependence on imported medicines. However, if the ruble continues to recover and the oil prices stabilise, EIU forecast that the value of pharmaceutical sales in Russia will reach US$24.6bn in 2022, the highest level since 2013.

3. Pharmaceuticals

Our expert opinion about prospects of cooperation:

Good prospects

Certain prospects

Uncertain prospects

2016

2018

2017

2019

-6.15

1.04

20.73

9.46


18

Attractive sectors of the Italian economy

1. Advanced Manufacturing

3. Biotechnology

2. Cybersecurity

4. Smart Grid Technologies

5. Travel and Tourism

Italy is the second-largest manufacturer in Europe with extraordinary know-how in strategic sectors such as machinery, fashion, foodstuffs, automotive and pharmaceuticals. Manufacturing accounts for 23.6% of Italy’s GDP. Analysts predict that Italy will increase

investment into machinery and equipment by 3.2% in 2017 and 3.4% in 2018. UCIMU, the association of Italian machine tools manufacturers, projects a 10% increase in sales of such machines in Italy in 2017. Domestic sales of machine tools increased by 22.2% between January

and March 2017. Moreover, overall confidence on the part of Italian capital goods manufacturers, as measured in March 2017 by Italy’s census bureau, reached its highest level in nine years.

In recent years, the Italian biotech industry has developed due to excellent academic and industrial research as well as the value of the technology and products developed. The turnover of this market is over $11.6 billion, while investment in R&D amounted to $2 billion with about 3,670 employees in research.

Biotechnology is among the sectors with the highest level of innovation in Italy. According to the 2016 report by Centro Studi Assobiotec, the Italian biotech industry is expected to grow significantly in the coming years. Industry experts expect revenue to grow by 12.8% in 2017 and another

18% in 2019, confirming the significant contribution that new technologies and products will bring in coming years. At the same time, Italy relies on biotech drug imports primarily from the United States, Belgium and Germany.

The impressive growth in electricity generation from renewable sources, supported by the Italian government through the adoption of the European Union’s 20-20-20 strategy, signals important consequences for the country’s electrical network. Renewable sources already cover 32% of Italy’s national energy production and there are more than 550,000 “prosumers” (producers

and consumers of electricity) already connected to the electrical grid. While production of electricity from renewable sources alleviates Italy’s heavy dependence on foreign energy sources (which still accounts for 75% of the country’s primary energy needs), its low predictability leads to imbalances and creates management challenges for a network that was engineered according to the requirements

of a centralized generation model. The primary areas of investment in smart grids in Italy include the integration of renewables, grid automation (primary and secondary substations) and operating centers. Smart meters (both electrical and gas) and related technologies also present opportunities.

Italian tourists are in the top five for Russian visas received. In 2015, 117,000 Italians got a Russian visa, the 4th place in the world. In 2016 there was a sharp decline in Russian visa issuance, but Italy still remained at No. 5 globally with 52,000 received. In 2015, tourism expenditure in Italy amounted to USD 24 billion, making it the world’s

10th biggest market for international tourism. A sharp depreciation of the ruble in 2014 made Russia an attractive destination to travel to and to buy goods and services. The two capitals, Moscow and St. Petersburg, are still among the most popular Russian destinations. Visits there often include daytrips to nearby towns

like Sergiev Posad in the Moscow region or Pushkin, Pavlovsk and Peterhof near St. Petersburg. Tours to Sochi also remain popular, as do trips on the Trans-Siberian railroad (not only luxury tours costing more than 10,000 euros, but also economy ones regular Russian trains).

The implementation of European Union legislation and actions through the National Strategic Framework and the National Cyber-Security Plan are expected to facilitate the growth of this market. As part of its Digital Agenda program, the Italian government is planning to make considerable investments in the area

of digital identity protection to increase the security levels of digital transactions and therefore the trust of consumers; to guarantee that online privacy and data laws are enforced to protect citizens’ identities; and to activate warning systems to notify citizens when security breaches occur.

2014

2016

2015

2017

F

1,495 1,4851,620 1,648

1,195 1,1951,3001,326

Total Market Size

Total Imports

Italian market of cybersecurity, USD mln

Source: export.gov, Worldbank, Italian ICT Industry Association, CLUSIT Italian Cyber-Security Association


19

Attractive sectors of the Russian economy

1. Agricultural equipment

3. Aviation Equipment

2. Automotive parts

4. Cosmetics and Perfumery

In 2016, the share attributable to agriculture and fishery output in the national GDP continued to grow, adding 1.1 pp in nominal and real terms. Demand for agricultural equipment is also growing. In 2016, the volume of the domestic market will reach RUB 128 billion (in 2015 – RUB 93 billion, in 2014 and 2013 — RUB 107 billion).

The market for agricultural tractors in Russia grew 47.6% in January–March 2017 vs the same period in 2016. Total tractor sales in January–March 2017 were 6,683 units, of which only 731 were Russian-made (their sales increased by 32.7%, while the market share fell from 12.2% to 10.9%). The share of imports of new tractors of foreign

brands increased from 27.3% to 31.8%, their sales jumped 72.0%

Aircraft manufacturing is an important industrial sector in Russia, consisting of 248 enterprises and employing around 400,000 people. The Russian government continues to support this industry through a special state program and plans to allocate $28 billion in order

to make Russia one of the world’s top three aircraft manufacturers by 2025. International cooperation is very important for the Russian aircraft industry. Despite the official calls for more import substitution, cooperation with the U.S. and European suppliers is expected

to continue in the medium to long term. Western-manufactured components, equipment and technology are regarded as technologically more advanced and competitive than Russian analogues.

The Russian beauty market segment has demonstrated positive dynamics in a turbulent economic situation. Despite the recession and ruble devaluation, this sector remained resilient. However, the depreciation of the Russian currency resulted in higher prices for imported beauty products. Some estimates show that prices for premium cosmetics increased by 13%, mass market

cosmetics by 18%, and cosmeceuticals by 20% compared to 2013 (the last year Russian GDP grew). Retail beauty chains have managed to restore their market position and even to exceed their pre-recession sales. The 2015 sales turnover totaled $13.3 billion or almost 16% more versus 2014 – the highest growth among other retail segments.

The best opportunity for companies is in the establishment of local manufacturing facilities either independently or in cooperation with Russian partners and the supply of components to vehicle assembly projects in the country. Although car sales dropped dramatically between 2013 and 2016, industry analysts believe that the growth in OEM supplies

and aftermarket products seen recently will continue in the near term, since the demand remains strong. Another attractive opportunity is the supply of upgraded equipment and technology to Russian manufacturers. Opportunities also exist in licensing and transferring of modern technology to Russian component manufacturers. 20

15

2016

2017

F

35,00028,00030,000

20,00013,00017,000 Total

Market Size

Total Imports

Automotive parts import to Russia, USD ‘000s

2015

2016

2017

F

9,84412,000

9,398

2,631 2,8002,600 Total

Market Size

Total Imports

Cosmetics and Perfumery import in Russia, USD mln

Agroindustry’s share of real GDP (%)

2011

2015

2012

2016

2013

2014

3.7

4.2

3.93.94.1

3.8

Source: export.gov, agroinfo.com, lenta.ru


20

The Russian medical devices market is very attractive for foreign companies. First, the size of the market is one of the largest in Central & Eastern Europe. And it still heavily relies on imported medical devices, despite all the efforts of the Russian government to develop a strong and robust medical technology industry. The Russian market for medical devices has growth potential because of an aging population. One of the opportunities for Italian

companies is supporting new medical equipment, that appeared due to Russia’s “Health” national project, when over 10,000 municipal polyclinics received new high-technology devices. After a couple of years of economic recession, industry experts are expecting a recovery over the next two years, which means that medical institutions, especially in the private sector, will be more willing and capable to buy new medical equipment, devices and disposables.

6. Medical Equipment

8. Pharmaceuticals

7. Mining

Russia is a large market for mining equipment due to the importance of the mineral extraction sector for the development of the Russian economy and the local industry’s inability to meet the demand. The country remains one of the world’s largest importers of mining equipment. The coal mining in particular has been developing rapidly in recent years: annual productivity in this subsector

has grown 30% to as much as 2,500 tons per employee in 2015 from 1,880 tons in 2010. There is demand for boring and coal preparation equipment despite the economic slowdown. The safety of coal mining has been growing substantially through the modernization of safety equipment and, specifically, methane detection. Still, demand for modern equipment there remains significant.

The Russian pharmaceutical market is very attractive for a number of reasons. In terms of sales, Russia sold $16.5 billion of pharmaceuticals in 2016, which corresponds to 1.3% of GDP and 19.9% of health spending in 2016. The pharmaceutical market sales have not grown in US dollar terms but in rubles the growth was about 10% from 2015. The forecasted growth in 2017

is approximately 25% in U.S. dollars. The Russian pharmaceutical market has a great potential to expand because the population is expected to grow and age. The Russian government is focused on creating its own pharmaceutical industry. The main document that governs this focus is the “Pharma 2020 Strategy”. Its main goal is to reduce the reliance of the Russian economy

on imported pharmaceuticals. Despite the challenges that foreign companies face as the result of this strategy, there a lot of opportunities, including licensing agreements and technology transfer for pharmaceutical companies and also sales of pharmaceutical equipment for the U.S. producers of this equipment.

Source: export.gov, «Russian outbound tourism: where next?» ITETravel&Tourism

2015

2016

2017

F

10,0009,5009,500

8,000 7,0007,500 Total

Market Size

Total Imports

Russian mining market, USD mln20

15

2016

2017

F

3,851

4,258

3,705

Russian Medical Equipment Market Size, USD mln

5. Franchising Industry Sector

Russian businessmen are ready to invest in well-known franchising brands. The total investment potential of Buybrand 2016 visitors is estimated at $700 million. For instance, 1,620 stores were opened by international operators in Russia

between July 1, 2015 and July 1, 2016. Retail trade accounts for 35% of all the active franchisers, followed by fast food (27%), services (35%) , and industrial franchises (2%). The growth potential of franchised businesses is about 15–18%

per annum. There are good franchising opportunities for fast casual restaurants franchising concepts as well as for coffee shop chains. Another high potential area for franchising brands is retail, predominantly in luxury apparel and footwear.


21

9. Rail

10. Travel and tourism

The Russian outbound tourism demonstrates positive dynamics. For the coming years further growth is expected, both for the Russian leisure and business outbound travel market. Italy has launched a number of services to grow its presence in the Russian market, including a growth plan for all-inclusive, and reaction has been positive.

The country has long been popular among Russian tourists for its shopping and city break options, and now operators are looking to make the most of Italy’s enormous variety to attract Russian tourists in all price categories. Also, a nimble pricing strategy has helped some Italian operators grow numbers by up to 40% in summer 2016.

662,000 Russian tourists was in Italy 2016. Italy has it all – beach holidays, city breaks, wine tourism, and more — meaning the country caters for all Russia’s main tourist segments. This range of earrings helped push demand for Italy trips in autumn 2016 up 37%, according to Russian tour operator BSI Group.

2015

2016

2017

F

4,447 4,7844,614

420 445433

Total Market Size

Total Imports

Russian Rail Market, USD mlnThe Russian railway complex is of particular strategic importance to the Russian government, contributing about 0.2–0.3% to the country’s GDP and employing more than 800,000 workers. The amount of RZD investment for 2017 is expected to reach $8.06 billion, an increase of 6.3% compared to 2016. About 13.7% of this budget will be spent on the procurement of new locomotives. Another 39.3% of this investment will be spent to support direct state orders to modernize the Trans-Siberian Railroad and the Baikal Amur Mainline, to construct the by-pass

railroad around Krasnodar (Southern Russia), to develop the Moscow Transit Hub, to build access facilities for the ports of the Azov, the Black Sea and the Baltic basins, and to construct the high speed line Moscow–Kazan. The longer-term priority projects include the high-speed rail development program until 2030. Program includes the construction of Moscow – Kazan – Yekaterinburg, Moscow – Adler and Moscow – St. Petersburg high-speed lines, as well as other high-speed lines connecting regional cities.


22

Communication opportunities

Recent business events and forums

Russian-Italian economic relations are actively developing. This is indicated by a large number of forums that take place both in Russia and in Italy:

Date Name Location Topic

08.07.2016 Russia-Italy: today and tomorrow. Industrial cooperation: new opportunities and prospects for cooperation and development

Russia, Ekaterinburg

Industrial cooperation, automation of production processes, creation of joint ventures, expansion of bilateral trade relations

07.04.2017 IX Russian-Italian Business Forum in Catania

Italy, Catania Russia-Italy: the art of innovation

21.06.2017 III Russian-Italian seminar of Florence

Italy, Florence

Cultural and economic relations between Russia and the Tuscany region

12.10.2017 XVII Task Force Italo-Russa Russia, Ekaterinburg

A business forum dedicated to mutual assistance in the sphere of small and medium business of both countries.

31.10.2017 II Russian-Italian Forum of Small and Medium Enterprises

Russia, Tula Establishment of bilateral relations between entrepreneurs of the two countries and conclusion of concrete projects in different spheres of the economy.

07.11.2017 XV Russian-Italian Council for Economic Cooperation

Russia, Moscow

The meeting noted the growing dynamics of Russian-Italian trade, economic and investment cooperation and the need for substantial expansion of cooperation in various spheres of the economy, science and education, as well as the importance of Russian-Italian cooperation in the field of civil societies.

20.11.2017 "Development through cooperation"

Russia, Moscow

Obtain participants with proven knowledge of the possibilities of Italian-Russian cooperation in the agro-industrial sphere, exchange of experience, study of successful cases, discuss investment projects and proposals for cooperation between companies of the two countries, establish B2B business contacts.

24.11.2017 IV Italian-Russian seminar in Turin Italy, Turin Industry and cultural heritage for a new development model

29.11.2017 The second meeting of the initiative group on the establishment of the Russian-Italian Fund for Small and Medium-Sized Businesses

Russia, Moscow

Following the results of the meeting, the draft of the Charter was supported, the draft of the structure was taken into account, as well as proposals on the candidatures of the founders, chairmen and members of the Board and the Board of Trustees, it was decided to create the Register of Business Projects (Russian-Italian Center of the Russian Academy of Agricultural Sciences and JSC "SME Bank")

Source: Conoscere Eurasia Association, agrovesti.net, innoprom.com, opora.ru, mgimo.ru, vesti.ru, italorussa.com


23

Cultural events and entertainment

February 2017 The International Exhibition of «Fashion Collection Première» in Moscow in the field of fashion clothing and accessories in the premium segment.

September 2017 Concerts of young artists of the Bolshoi Theater and the Academy of La Scala Theater in Moscow.

December 2017 The «Italian evening in Russia» ii a cultural festival in Tula region, which started in 2015. It is intended for developing friendly culture relations between countries. Winner will take part in the International festival "Russian evenings in Italy", which will be held in Modena (Italy) in May 2018.

March 2017 The first International Day of Italian Design in Moscow.

November 2017The festival "Week of Italian cooking” — is second festival for popularization of the culinary traditions of Italy. In Russia 29 restaurants from 11 cities took part in it.

2018The «Russian seasons» is a global festival of Russian culture. It will take place during 2018 year in Italy.

May 2017 The first gastronomic boutique of Italian products «Eataly» opened in Moscow. It is a unique combination of the food market, restaurants and an educational area.

November–December 2017The «Russia- Italy Film festival» is the most ambitious Italian-language festival held in Russia.


24

Upcoming and ongoing events

01.12.2017 – 28.02.2018 Russian-Italian exhibition "Myth Stradivari“Russia, MoscowThis is a joint project of VIMCK them. MI Glinka (Russia) and the Violin Museum (Italy). The exhibition tells not only about the history of creating violins, but also about the secrets of craftsmanship, the stages of production, design and assembly of tools.

10.12.2017 – 14.12.2017VIII Festival of Italian art of the region of ApuliaRussia, Moscow The festival is timed to the celebration of St. Nicholas Day on the Orthodox calendar and traditionally takes place in two stages: in spring in Bari — "Summer Garden of Arts", and in winter in Russia — "Winter Garden of Arts in Moscow". Organizers of the event: the Ministry of Culture of the Russian Federation, the Center for Film Festivals and International Programs, the Russian-Italian Center for Economics and Development "Chezvir" and the Administration of the Puglia region with the assistance of the Italian Institute of Culture in Moscow and the Moscow office of the Italian-Russian Chamber of Commerce.

12.12.2017 – 13.05.2018 Exhibition "Revolution: From Chagall to Malevich, from Repin to Kandinsky“Russia, Moscow, Russian Museum The exhibition is organized by CMS Cultura, with the participation of the State Russian Museum on the occasion of the 100th anniversary of the Great October Revolution in Russia. The exhibition will restore for visitors the true history of those turbulent days and cultural ferment between 1910 and 1920, when new trends in art were born, associations and avant-garde movements of artists and people of art were created.

31.01.01 – 03.02.2018 FIERAGRICOLAItaly, VeronaInternational Agro-Industrial Exhibition "Fieragricola – 113th International Agricultural Technologies Show". The following thematic sections will be presented at the exhibition: agricultural machinery and equipment; plant growing; technologies and equipment for cattle breeding; renewable energy sources – biogas and energy plants.

February–May 2018Italy, MilanThe Italian-Russian Chamber of Commerce organizes a master class on the theme: "WINE EXPORT MANAGEMENT on the Eurasian markets: the potential of Russia and the countries of the Eurasian Customs Union. Topics of the master course: ecology, trade-export, logistics, marketing, internationalization, legislation & ADR, financial sector, communication.

01.02.2018 – 03.02 2018SAMUMETAL 2018Italy, Pordenone The Exhibition of metalworking machines and equipment: Subtech 2018 (subcontracting exhibition in metalworking) and SamuPlast 2018 (an exhibition of excellence in technology, equipment, machinery in the plastics industry).

20.01.2018 – 24.01.2018International Trade Show SIGEPItalyThe 39th International Trade Show of Artisan Gelato, Pastry, Bakery and the Coffee World. The event confirms its undisputed international leadership as the trade fair for professional operators all over the world in the artisan gelato, pastry and baking sectors, together with that of coffee. The most anticipated event will be the next World Championship of Women-Confectioners (22.01.2018 – 23.01.2018).

25.01.2018 – 18.03.2018Exhibition dedicated to Antonio LigabueRussia, Moscow The exhibition is organized by the "Archive Antonio Ligabue Foundation, while promoting the artistic heritage of Ligabue, the Foundation organizes and organizes exhibitions and expositions dedicated to the artist in the most prestigious museums in Italy and abroad.


25

02.02.2018 – 05.02.2018Arte FieraItaly, BolognaThe 42nd specialized exhibition. One of the oldest exhibitions of modern Italian art. In the days of the exhibition in the historic center of Bologna, together with the city galleries and museums, the event "White Night of Art" is organized.

15.02.2018 – 16.02.2018Russian Investment ForumRussia, SochiThe Russian Investment Forum is a traditional platform for discussing the development of the world economy and its current trends, analytical and media communities, political circles, expert and media communities. The combination of business programs and investment exhibitions in the regions, find effective economic solutions for specific industries, companies and projects, establish mutually beneficial commercial and scientific contacts.The forum is held with the participation of the Council of the Government of the Russian Federation DA. Medvedev.

01.03.2018 – 31.03.2018 Italy, Rome, MilanRussian-Italian scientific-practical conference on innovation-technological and industrial cooperation.

25.04.2018 – 27.04.2018 "ENERGY AND ELECTRICAL ENGINEERING“Russia, Saint PetersburgThe 25th International specialized exhibition is one of the leading industry events in Russia, the leader among exhibition projects in the field of electric power and related industries in the North-West region.

01.05.2018 – 31.05.2018LAMIERA 2018Italy, BolognaThe International Exhibition of Metalworking and Welding Equipment, Machine Tools and Tools.

24.05.2018 – 26.05.2018Petersburg International Economic ForumRussia, Saint PetersburgOne of the world's leading platforms for discussing key issues of the global economy.

06.06.2018 – 08.06.2018XXVII International Financial Congress (IFC–2018)Russia, Saint PetersburgIFC-2018 is the largest professional event in the field of finance. Within the framework of the Congress, topical problems of the financial industry, development of regulation and supervision in the financial market, monetary policy and issues of economic development are discussed. Representatives of the Bank of Russia, legislative and executive authorities, foreign regulators and international organizations, major banks and financial companies, professional associations of financial market participants, as well as recognized international and Russian experts will take part in the events of the Congress. The operator of the Congress is the Roskongress Foundation.

22.03.2018 – 24.03.2018 MECSPE 2018Italy, Parma, Fiera di ParmaThis is International industrial exhibition, which Includes 12 exhibitions-sections: Macchine E Utencili (exhibition tool); Power Drive (industrial automation exhibition); Subfornitura Meccanica (exhibition of subcontracting services), Eurostampi (exhibition of equipment, technologies, design, and materials for the manufacture of molds, dies for working with plastics); Fabbrica Digitale (exhibition of the latest technologies and Industry 4.0); Logistica (logistics exhibition, digital technology); Subforntura Elettronica (electronic subcontracting exhibition); Trattamenti Superficiali (exhibition of surface technology); MOTEK Italy (exhibition of process automation in the manufacturing industry, actuators, electronic account, Internet of things, logistics); Control Italy (the exhibition of Metrology and measuring equipment, quality control); ADDITIVE MANUFACTURING (exhibition of additives, 3D printing technologies, prototyping); Materiali Non Ferrosi, Leghe, Compositi E Tecnologie (exhibition of technologies for the use of non-ferrous metals and composites in production).

23.03.2018 – 25.03.2018 "PISA FASHION DAYS 2018"Italy, Pisa Within the festival of fashion will be held individual fashion shows, contests of the best in the field of beauty: designers of clothing and accessories designers. In the program of the festival – a meeting with experts, buyers, interested in international cooperation.


26

Appendix: Top subcategories of Russian-Italian trade

Russian exports to Italy

Total for 2016, mln USD

Region

1. 27 – Mineral fuels, petroleum and distillates, bituminous substances, mineral waxes

270900 – Oil raw and oil products raw made from bituminous minerals 4,455

2709009009 – Other oil products received from bituminous rocks 2,660 Moscow

2709009009 – Other oil products received from bituminous rocks 508 Saint Petersburg

2709009009 – Other oil products received from bituminous rocks 497 Tyumen region

271019 – Other distillates and foods 1,816

2710196401 – Fuel oils with sulfur content more than 1 mac. %, But not more than 2 mac.%, For other purposes

635 Krasnodar region

2710196401 – Fuel oils with sulfur content more than 1 mac. %, But not more than 2 mac.%, For other purposes

458 Moscow

2710196601 – Fuel oils with sulfur content more than 2 mac. %, But not more than 2.8 mac.%

265 Moscow

2710194800 – Gasoles for other purposes with sulfur content more than 0.2 mac.% 196 Moscow

2. 72 – Ferrous metal

720110 – Iron ponded unlimited, containing 0.5 mac. % or less phosphorus 133

7201103000 – Cast iron unlimited, containing mass not more than 0.5% phosphorus, but less than 0,4%

103 Orenburg region

720839 – Flat roll of iron or non-styled steel with width 600 mm or more, hot, unlocked, without antique or other coating: thickness less than 3 mm

130

7208390000 – Flat plastic from iron or unlimited steel width 600 mm or more, hot, not clutch, without anti-cant or other coating: thickness is less than 3 mm

93 Chelyabinsk region

720310 – Direct recovery products of iron ore 106

7203100000 – Direct recovery products of iron ore 106 Belgorod region

720712 – Other semi-finished articles of iron or unselated steel containing less than 0,25 mac.% carbon, rectangular (except square) cross section

101

7207121000 – Semi-finished irons of rectangular (except square) cross section, catalon or received by continuous casting, containing less than 0,25

77 Sverdlovsk region

3. 71 – Pearl natural or cultivated, precious or semi-finished stones, precious metals, metals placed by precious metals, and articles thereof; bijouterie; coins

711011 – Platinum unbeatted or powder 235

2709009009 – Other oil products received from bituminous rocks 228 Moscow

711021 – Palladium not underpassed or powder 197

7110210009 – Palladium not underpassed or powder, other 172 Moscow


27


Region

4. 76 – Aluminum and articles thereof

760110 – Aluminum unlimited unprocessed 116

7601100000 – Aluminum unlimited 110 Irkutsk region

5. 48 – Paper and cardboard; products from paper weight, paper or cardboard

480439 – Other craft paper and cardboard, with mass 1 m.K. 150 g or less (except blood)

22

4804398000 – Craft-paper and craft-cardboard miscellaneous in which are less than 80% of weight of the yut fiber's wood fiber wood

22 Komi Republic

480419 – Other craft liner (tarn cardboard) matrix 12

480255 – Paper and cardboard other masses 1 m2 40 g or more, but not more than 150 g in rolls

12

6. 44 – Wood and articles thereof; charcoal

441232 – Plywood other, having, at least, one external layer from wood of first rocks

32

440710 – timber: coniferous, splashed, or splashed alone, threaded or broaden, suttled or unspected, grinded or unshiffed, having or connecting with the connection in a ship thickness more

19

7. 10 – Cereals

100590 – Corn is other 26

100199 – Other wheat and meslin 15

8. 40 – Caoutchouc, rubber and articles thereof

401110 – Tires pneumatic rubber new for cars (including cargo-passenger vanes and sports cars)

33

9. 31 – Fertilizer

310210 – Urea, including in water solution 32

10. 41 – Raw skin (except natural furs) and chamois leather

410792 – Other skin of large cattle facial two 35


28


Region

1. 84 – Nuclear reactors, boilers, equipment and mechanical devices

848180 – Other fittings for pipelines, boilers, reservoirs, cisterns, tanks or similar capacity

190

8481808110 – Cranes designed for work at the temperature of the environment – 40 grad. C and below, pressure 16 pa and above, in a medium containing hydrogen sulfur (h2s) 2

42 Moscow

8481808199 – Other cranes, other 19 Moscow

847989 – Other machines and mechanical appliances having individual functions 117

8479899708 – Other machines and mechanical equipment, other 46 Moscow

8479899708 – Other machines and mechanical equipment, other 24 Saint Petersburg

841199 – Other parts for turboreactive and turbine engines, other gas 89

8411990019 – Other parts, drug equipment 841182200 and 841182600, excluding part of equipment of suitables 8411822002 and 8411826002

54 Saint Petersburg

2. 30 – Pharmaceutical products

300490 – Pharmaceutical products, other 360

3004900002 – Pharmaceutical products, other, packed in forms or packages for retail sales 290 Moscow

3. 85 – Electrical machinery and equipment, their parts; sound – recording and sound – reproducing apparatus, their parts

851660 – Others ovens; electric ranges, marmites, electric boilers; grilles and rosters 28

8516608000 – Ovens furnaced 13 Moscow

853620 – Automatic voltage switches not more than 1000 v 24

8536209008 – Automatic circuit breakers more than 63A, other 18 Moscow

4. 39 – Plastics and plastic products

392190 – Other plates, sheets, film, foil and stripes or polymer material tape 88

3921906000 – Other plates, sheets, film, foil, and banks or tapes of polycried products 29 Novgorod region

392690 – Other products from plastics and articles of other materials of merchant positions 3901–3914

48

3926909709 – Other products from plastics and articles of other materials of merchant positions 3901–3914, other

9 Moscow

3926909707 – Other products from plastics and articles of other materials of merchant positions 3901–3914, other

6 Moscow

5. 64 – Footwear, gaiters and similar wares; their parts

640399 – Other footwear on the sole from rubber, polymer material, natural or composite leather, with the top of the skin

96

6403999600 – Other footwear, with the length of the style 24cm or more, men's 24 Moscow

6403999800 – Other footwear, with the length of the style 24cm or more, women's 32 Moscow

640391 – Other footwear on the sole from rubber, polymer material, natural or composite leather, with the top of the skin, closing the ankle

64

6403911800 – Other footwear, closing the ankle, but not part of the calf, with the length of the style 24 cm or more, women's

24 Moscow

6403919800 – Other footwear, with the length of the style 24cm or more, women's, closing the ankle

12 Moscow

Italian exports to Russia


29


Region

640359 – Other footwear on the sole from natural leather 61

6403599900 – Other footwear on the sole from natural leather, with the length of the style 24 cm or more, women's

17 Moscow

6. 73 – Wares of ferrous metal

732690 – Other wares of ferrous metal 63

7326909808 – Other wares of ferrous metal 11 Moscow

7326909808 – Other wares of ferrous metal 9 Tver region

730890 – Other metal constructions from ferrous metals (except the building constructions of the commodity position 9406) and their parts

31

7308905900 – Other metal structures manufactured mainly from sheet material 16 Chelyabinsk Region

7. 22 – Alcoholic and nonalcoholic beverages, vinegar

220421 – Wine other; grape oil, frozen that was preventive or terminated by additives of alcohol in vessels with capacity of more than 2 l

136

220410 – Sparkling wine 67

220510 – Vermutes and other wine grapes natural with addition of vegetable or aromatic extracts in vessels with capacity of more than 2 l

26

8. Tools and apparatus optical, photographic, cinematographic, measuring, control, precision, medical or surgical; their parts and accessories

901890 – Other instruments and equipment used in medicine, surgery, dentistry or veterinary

67

9018908409 – Other instruments and equipment 47 Moscow

901819 – Other electric diagnostic equipment 22

900410 – Sunglasses 18

9. 33 – Essential oils and resinoids; perfumes, cosmetics or toilets

330300 – Perfumes and toilets water 43

3303009000 – Toilets water 32 Moscow

330590 – Hair care: other 35

3305900009 – Hair care: other 26 Moscow

330420 – Eye makeup equipment 33

3304200000 – Eye makeup equipment 29 Moscow

330499 – Other cosmetics or equipment for make-up and means for skin care (other than medicinal), including means against tanning or treatment; manicure or pedicure

33

3304990000 – Other cosmetics or equipment for make – up and means for skin care (other than medicinal), including means against tanning or treatment; manicure or pedicure

29 Moscow

10. 62 – Clothes and accessories for clothing, except for knitted machine or manual handling

620211 – Coat, semi-covers, captures, cases and similar products, female or for girls, from woolen yarn or yarns from thin hair of animals

13 Moscow

620311 – Suits male or for boys from wool yarn or yarn from fine hair of animals 12 Moscow region

620342 – Trousers, combines with stripes and leaves, breeches and shorts, men's or boys 11 Moscow region

620449 – Female or sets for girls from other textile materials 11 Moscow region


30

Contacts

Joe PacelliPartnerDeloitte [email protected]

Yulia AfanasyevaIntern Research Center Deloitte [email protected]

Lora ZemlyanskayaResearch Centre LeaderDeloitte [email protected]

Victoria PigalkinaIntern Research Center Deloitte [email protected]

Dmitriy KasatkinSenior Research SpecialistDeloitte [email protected]

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Russia and Italy: Doing Business Together · Russia and Italy: Doing Business Together 07 Top 10 Italian Exports to Russia* Nuclear reactors, boilers, equipment and mechanical devices