Russian innovative economy: is it real?Anatoly Chubais, Chief Executive OfficerMarch 29,2012 / Stanford Faculty Club      ...
Current macroeconomic situation in Russia                                    Rusnano_Investment_Attractiveness_Short_ENG_F...
After a sharp drop in 2009, Russian GDP has recovered and is nowexpected to continue growingGDP development and structure ...
Russian GDP (PPP): 6th in the world                                          GDP (PPP), USD trillion 16           15,07 12...
Economic indicators: facts and forecasts                                    INFLATION [%]                                 ...
Foreign direct investment was growing strongly prior to the crisis –Expected to regain former level by 2013Foreign direct ...
Overall effect from accession of Russia to WTO is mostly positivefor innovative industriesWTO membership will aid Russia ...
Russia’s modernisation: main policy challenge         Vladimir Putin, Feb 8, 2008:                         Dmitry Medvedev...
RUSNANO: goals and outlook                             Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx   9
Russian nanotech industry 2010-2015: late start, but huge potential  Ivory Tower                                          ...
RUSNANO: brief overview Established in 2007 as a state corporation Transformed into a joint-stock company in 2011 Resource...
RUSNANO: brief overview Tasks: - commercialization of nanotech industry projects - sales of Russian nano-enabled products ...
RUSNANO’s key results: FundingOverall amount of project funding (progressive total), 2008 – 2011, $ billion               ...
RUSNANO’s key results: Production  2011: 13 new factories in 10 Russian regions               St.PetersburgKarachev       ...
RUSNANO’s key plans:            Production               2012: 16 new factories in 9 Russian regions                      ...
The most attractive market segments:ExamplesPharmaceuticals and biotechnologyEnergy efficiencyElectronics, photonics and o...
Pharmaceuticals and biotechnology                                    Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx...
Estimated minimum size of the pharma and biotech sector in 2015is USD 4,5 bn – 78% growth in vaccines is possibleOverview ...
-    RUSNANO has numerous ongoing projects in booming sectors –    Successful localization projects are also underway    F...
Energy efficiency                    Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx   20
Power generation and energy accumulation will drive the sector upto USD 8 bn in 2015Overview of energy efficiency sub-sect...
RUSNANO is already co-investor in a number of successful projectsin the sector, Liotech and Nesscap already started produc...
Electronics, photonics and optics                                    Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx...
The electronics and photonics sector is highly attractive for investors– Estimated market potential of USD 5,7 bn in 2015O...
RUSNANO has a track record of successful investments in thesector, IRE-Polus and Optogan are currently market leadersFINAN...
Construction materials                         Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx   26
Total market volume of the sub-sectors with the biggest commercialpotential is ~USD 14,6 bn, more than half of it - polyme...
There are potentially interesting projects on the market – RUSNANOhas invested in some of them, which are now successfully...
Russian innovative economy: it is real!КОНЦОВКА!!!            On your way to a great deal  Source: Roland Berger Strategy ...
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Anatoly Chubais speaking at Stanford Faculty Club

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During the visit to the USA RUSNANO's CEO Anatoly Chubais took part in the Global Technology Symposium and gave a speech at the Stanford Faculty Club.

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Anatoly Chubais speaking at Stanford Faculty Club

  1. 1. Russian innovative economy: is it real?Anatoly Chubais, Chief Executive OfficerMarch 29,2012 / Stanford Faculty Club Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 1
  2. 2. Current macroeconomic situation in Russia Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 2
  3. 3. After a sharp drop in 2009, Russian GDP has recovered and is nowexpected to continue growingGDP development and structure GDP DEVELOPMENT [USD bn] GDP STRUCTURE, RUSSIA, 2010 [%] 1,102 8% Other 1,059 8 9 1,016 6% Construction 977 944 942 Natural resources 6 897 905 11% 870 Production 826 5 764 4 4 4 4 4 Retail 4 16% Services 19% 40% -8 2005 2007 2009 2011 2013 2015 Real GDP growth Real GDP in 2005 prices [USD bn]Source: Federal State Statistics Service, OECD, EIU, IMF, Roland Berger Strategy Consultants Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 3
  4. 4. Russian GDP (PPP): 6th in the world GDP (PPP), USD trillion 16 15,07 12 11,32 8 4,47 4,40 4 3,09 2,38 2,31 2,25 2,22 1,83 0 USA China India Japan Germany Russia Brazil UK France ItalySource: IMF Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 4
  5. 5. Economic indicators: facts and forecasts INFLATION [%] FINANCE AND DEBT 25 International reserves (as of 16.03.2012): $505.4 bn 20,1 20 National Wealth Fund and Reserve Fund, 15 aggregate amount (as of 01.03.2012): $152.2 bn 19% 10 Gross government debt , 5 6 % of GDP (2012, forecast): 14.1% 40%Source: Federal State Statistics Service, Ministry of Finance of the Russian Federation, Bank of Russia Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 5
  6. 6. Foreign direct investment was growing strongly prior to the crisis –Expected to regain former level by 2013Foreign direct investment in Russia FOREIGN DIRECT INVESTMENT IN RUSSIA [USD bn] STRUCTURE OF FDI, 2010 [%] 1% 100% Construction 20% Financial sector 80 Power, gas, oil +19% 3% Others 70 p.a 6% Telecommunications 60 8% Real estate 8% Natural resources 50 Science 8% 40 Retail 9% Manufacturing 30 13% 20 10 24%  0 ’05 ’06 ’07 ’08 ’09 ’10 ’11F ’12F ’13F Foreign direct investmentSource: Roland Berger Strategy Consultants Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 6
  7. 7. Overall effect from accession of Russia to WTO is mostly positivefor innovative industriesWTO membership will aid Russia in its ambitious plan to innovate and modernize the economy, since:  imported inputs, particularly equipment, will become cheaper as a result of tariff reductions after accession  the WTO «seal of approval» will render Russia more attractive for foreign direct investments An additional effect for innovative industries: production growth rate by 6-7.5% per yearSource: CASE Research Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 7
  8. 8. Russia’s modernisation: main policy challenge Vladimir Putin, Feb 8, 2008: Dmitry Medvedev, Nov 12, 2009: ”In our work to make our economy radically more effective we also need to put in place incentives “In the twenty-first century, our country once and conditions for progress in a whole number of again needs to undergo comprehensive different directions [...] This calls for large-scale modernisation. […] I see this as a question of our modernisation of production facilities in all country’s survival in the modern world” economic sectors” Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 8
  9. 9. RUSNANO: goals and outlook Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 9
  10. 10. Russian nanotech industry 2010-2015: late start, but huge potential Ivory Tower USA Dominant Japan Germany Nanotech Activity U.K. S.Korea Russia Israel Italy Singapore Minor League Technology Development Strenght Niche Goal for Russia: move into the “major league” by 2015Source: Lux Research, RUSNANO Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 10
  11. 11. RUSNANO: brief overview Established in 2007 as a state corporation Transformed into a joint-stock company in 2011 Resources: Russian Federation’s asset contributions in RUSNANO: $ 4.1 bn State guaranteed debt financing (bonds issuance): $ 5.7 bn Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 11
  12. 12. RUSNANO: brief overview Tasks: - commercialization of nanotech industry projects - sales of Russian nano-enabled products by 2015 – ~ $ 30 bn per year Terms of Financing: - financing projects at early stage and stage of expansion - ownership participation — no more than 50% - 1 share RUSNANO Fund for Infrastructure and Educational Programs Joint-stock company Non-commercial organizationco-investment in nanotechnology industrial projects investment in non-financial innovative infrastructureand investment funds and educational programs Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 12
  13. 13. RUSNANO’s key results: FundingOverall amount of project funding (progressive total), 2008 – 2011, $ billion 3,42 3,4 2,2 1,4 1,1 0,6 0,007 0,0003 2008 2009 2010 2011 RUSNANO Coinvestors Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 13
  14. 14. RUSNANO’s key results: Production 2011: 13 new factories in 10 Russian regions St.PetersburgKarachev Moscow + Moscow region Nizhni NovgorodNovomoskovsk Izhevsk Aramil (Sverdlovsk region) Kazan Novosibirsk Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 14
  15. 15. RUSNANO’s key plans:  Production 2012: 16 new factories in 9 Russian regions St.Petersburg Kaluga Moscow + Moscow region Karachev Vladimir Nizhni Novgorod Novomoskovsk IzhevskValuyki (Belgorod region) Aramil (Sverdlovsk region) Novocheboksarsk Kazan (Chuvashia region) Novosibirsk Nevinnomyssk (Stavropol region) Usolie-Sibirskoe (Irkutsk region) Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 15
  16. 16. The most attractive market segments:ExamplesPharmaceuticals and biotechnologyEnergy efficiencyElectronics, photonics and opticsConstruction materials Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 16
  17. 17. Pharmaceuticals and biotechnology Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 17
  18. 18. Estimated minimum size of the pharma and biotech sector in 2015is USD 4,5 bn – 78% growth in vaccines is possibleOverview of pharma and biotech sub-sectors (BIO)PHARMACEUTICALS VACCINES MEDICAL SERVICES (excl. vaccines)ATTRACTIVE- > Upside potential > Upside potential > Moderate potentialNESS > Strong CAGR > Strong CAGR > Demand from > Government support > Government support commercial segmentMARKET +47% 14,001) max +78% 2,001) max2011-2015 +14%[USD bn] 0,60 1,00 3,00 3,00 min 0,20 0,50 min 2011 2015 2011 2015 2011 2015KEY TRENDS > Strong medical need, especially in > Growth of vaccines market > Demand for IVD services is mainly cardiovascular and oncology depends mainly on government driven by the commercial sector treatments plans for including new vaccines in > Significant R&D base, experienced > Government aims to localize National Immunization Calendar scientific teams manufacturing due to currently high > Unclear how many and what type > Clinical trials in Russia are high share of imported drugs (77%) of vaccines will be included quality and less expensive and quicker than in the EU/US1) window of opportunity (potential)Source: Roland Berger Strategy Consultants Market attractiveness Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 18
  19. 19. - RUSNANO has numerous ongoing projects in booming sectors – Successful localization projects are also underway FINANCING: >RUSNANO share of committed capital as per January 2012 – USD 1,1 bn >Private investors (in cooperation with RUSNANO) as per January 2012 – USD 1,6 bn Investment projects in the sector – examples COMPANY PRODUCT TECHNOLOGY BioBetter class of Biodegradable nanocomposite PHARMACEUTICALS SinBio pharmaceuticals materials Technology based on pseudo- VACCINES NT Pharma Flu nanovaccines adenoviral nanofractions and special nanostructures PET-Technology National chain of PET Nuclear medicine, new DIAGNOSTICS diagnostic centers in diagnostic methods Russia TECHNOLOGY Domain Therapeutic products for the GMP-standard manufacturing Associates treatment of viral infections, TRANSFER cardiovascular diseases, cancer TECHNOLOGY Celtic Pharma Innovative medications in GMP-standard manufacturing hematology, endocrinology, TRANSFER cardiology, oncology Source: Roland Berger Strategy Consultants Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 19
  20. 20. Energy efficiency Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 20
  21. 21. Power generation and energy accumulation will drive the sector upto USD 8 bn in 2015Overview of energy efficiency sub-sectors ENERGY ENERGY POWER ENERGY HARVESTING ACCUMULATION GENERATION DISTRIBUTION AND CONVERSIONATTRACTIVE- > High potential > Upside potential > Moderate potential > Stable potentialNESS > Strong CAGR > Huge future market > Strong CAGR > Moderate CAGR > Government support share > Government supportMARKET +31% +25% +7%2011-2015[USD bn] 3,16 2,90 1,11 1,07 0,97 0,46 0,83 2011 2015 2015 2011 2015 2011 2015KEY TRENDS > Opening up of the > USC technology power > Growth driven by overall > Growth driven by import electric vehicles market stations will be built in growth of advertising and substitution for power > Growth in demand for Russia from 2015 construction markets transformers and high accumulators for power > Technology will account > Growth rate of non- level of overall distribution companies for more than 30% of residential property investment in energy total power capacity market 2011-2015 is > Industry leaders plan to installed 18.6% localize transformer production in RussiaSource: Roland Berger Strategy Consultants Market attractiveness Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 21
  22. 22. RUSNANO is already co-investor in a number of successful projectsin the sector, Liotech and Nesscap already started productionFINANCING:>RUSNANO share of committed capital as per January 2012– USD 0,9 bn>Private investors (in cooperation with RUSNANO) as per January 2012 – USD 1,28 bnInvestment projects in the sector – examples COMPANY PRODUCT TECHNOLOGY Accumulators for electricACCUMULATORS Liotech High capacity lithium-ion batteries vehicles and energy sector Carbon microwave steam Nesscap Energy High-capacity energySUPERCAPACITORS Inc accumulators activation of nanopore electrode structures Profotech Fiber optic metering Nanostructured fiber-based optic current andTRANSDUCERS systems for power grids voltage measurement and monitoring sensorsPHOTOVOLTAICS Hevel Solar modules Thin film technologySource: Roland Berger Strategy Consultants Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 22
  23. 23. Electronics, photonics and optics Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 23
  24. 24. The electronics and photonics sector is highly attractive for investors– Estimated market potential of USD 5,7 bn in 2015Overview of electronics and photonics markets INTEGRATED CIRCUITS OPTOELECTRONICS TELECOMMUNICATIONS AND CHIPSATTRACTIVE- > High potential > Moderate potential > Stable potentialNESS > Strong CAGR > Moderate CAGR > Moderate CAGR > Government supportMARKET +61% +98%2011-2015 +18%[USD bn] 3,07 1,85 0,46 0,38 0,75 0,12 2011 2015 2011 2015 2011 2015KEY TRENDS > Many areas of application, > Market is driven by LED, which > Massive market growth mainly including transportation, will mainly be used for lighting due to transition of mobile pharmaceuticals, logistics, etc. systems operators to 4G networks by > Massive government support via > Government support via the applying LTE base stations ERA GLONASS project and restriction of incandescent light > Growth in fiber channel market is implementation of RFID in all bulbs and changes in construction moderate and driven by the pharma products, transportation rules involving the use of LED in increasing number of broadband and postal systems new buildings service usersSource: Roland Berger Strategy Consultants Market attractiveness Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 24
  25. 25. RUSNANO has a track record of successful investments in thesector, IRE-Polus and Optogan are currently market leadersFINANCING:>RUSNANO share of committed capital as per January 2012– USD 1,1 bn>Private investors (in cooperation with RUSNANO) as per January 2012 – USD 1,98 bnInvestment projects in the sector – examples COMPANY PRODUCT TECHNOLOGY Fiber lasers and NTO IRE-Polus telecommunicationsPHOTONICS Fiber lasers equipment in Russia High-brightness light-emittingOPTOELECTRONICS Optogan Light emission diodes diodes for a large variety of applications Crocus Tech- Magnetoresistive Innovative memory productionELECTRONICS nology SA technology memorySource: Roland Berger Strategy Consultants Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 25
  26. 26. Construction materials Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 26
  27. 27. Total market volume of the sub-sectors with the biggest commercialpotential is ~USD 14,6 bn, more than half of it - polymers and additivesOverview of construction materials sub-sectors LOW EMISSIVITY THERMAL POLYMERS AND WATER TREATMENT GLASS INSULATION ADDITIVES MEMBRANESATTRACTIVE- > Strong CAGR > Large market volume > Large market volume > Mostly governmentNESS > Stable market growth financing > Massive market > Stable market growth > Increased application > Moderate growth potential of new materials potentialMARKET +15% +11% +86% +16%2011-2015[USD bn] 1,20 4,30 8,87 0,14 0,21 2,40 5,11 0,10 2011 2015 2011 2015 2011 2015 2011 2015KEY TRENDS > Tighter regulations on > Overall construction > Growth driven by overall > Demand for water thermal resistance of growth and changes in construction growth treatment membranes windows for new energy efficy regulations > Good prospects for mostly determined by buildings from 2016 for new buildings are increased application of governmental spending > Share of low emissivity driving market growth new materials > Strong need for glass expected to grow > Great need for insulation (composites, nano- refurbishing existing for refurbishing existing additives, etc.) infrastructure residential stockSource: Roland Berger Strategy Consultants Market attractiveness Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 27
  28. 28. There are potentially interesting projects on the market – RUSNANOhas invested in some of them, which are now successfully operatingFINANCING:>RUSNANO share of committed capital as per January 2012– USD 0,46 bn>Private investors (in cooperation with RUSNANO) as per January 2012 – USD 1,0 bnInvestment projects in the sector – examples COMPANY PRODUCT TECHNOLOGY Glass magnetron spattering LOW EMISSIVITY STiS Low emissivity glass in metal-oxide nanofilm GLASS vacuum Composite Reinforcement of polymer with COMPOSITES Galen reinforcement and basalt fibers fittings Additives for bituminous Devulcanized rubber nanoparticles for bituminous ADDITIVES Unicom concrete and asphalt concrete and asphalt additives productionSource: Roland Berger Strategy Consultants Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 28
  29. 29. Russian innovative economy: it is real!КОНЦОВКА!!! On your way to a great deal Source: Roland Berger Strategy Consultants Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx 29

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