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Dragon Sourcing
Your Tailored Approach to Emerging Markets
www.dragonsourcing.com
Study on Sourcing Opportunities in Russia
Aug, 2018
www.dragonsourcing.com© 2018 Dragon Sourcing. All rights reserved. 2
Table of Contents
 Executive Summary
 Russia – An Overview
 Russia – Country Overview
 Trade Statistics
 Export & Import Trade Statistics
 Top Export Categories
 Mineral fuels including oil
 Iron, steel
 Gems, precious metals
 Machinery including computers
 Wood
 Cereals
 Fertilizers
 Aluminum
 Copper
 Electrical machinery, equipment
 Trade Agreements
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Executive Summary (1/2)
© 2018 Dragon Sourcing. All rights reserved. 3
Category
HS
Code
2017
Export
Value in
USD
Billion
Russia’s
share of
Global
Exports
(2017)
Category‘s
share of
Total
Russia’s
Exports
(2017)
Top Products Top Export Destinations
Import Duty
into US
Import Duty
into EU
Mineral Fuel 27 173.3 8,9% 48,5%
Petroleum oils
Coal
Petroleum gas
Netherlands, China,
Germany
2,1% 0,4%
Iron, steel 72 18.8 5,1% 5,3%
Semi-finished products of iron or steel
Flat-rolled products of iron or steel
Pig iron and spiegeleisen
Turkey, USA, China 0,2% 0,3%
Gems,
precious
metals
71 11 1.7% 3,1%
Diamonds
Platinum
Gold
Belgium, United Kingdom,
Switzerland
1,4% 0,4%
Machinery
including
computers
84 8,5 0,4% 2,4%
Turbojets, other gas turbines
Nuclear reactors
Machinery, plant or laboratory equipment
China, Kazakhstan,
Belarus
0,7% 1,2%
Wood 44 7,9 5,8% 2,2%
Wood sawn or chipped lengthwise
Wood in the rough
Plywood, veneered panel and similar
laminated wood
China, Japan, Finland 1,6% 2%
Cereals 10 7,5 7,3% 2,1%
Wheat and meslin
Maize or corn
Barley
Egypt, Turkey, Iran 1,3% 9,9%
Fertilizers 31 7,2 14,2% 2%
Mineral or chemical fertilizers
Mineral or chemical nitrogenous
fertilizers
Mineral or chemical potassic fertilizers
Brazil, Ukraine, China 0% 4,1%
Aluminum 76 6,7 3,8% 1,9%
Unwrought aluminium
Aluminium wire
Plates, sheets and strip, of aluminium
USA, Turkey, Japan 2,3% 5,4%
Source: International Trade Centre, Worldstopexports.com
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Executive Summary (2/2)
© 2018 Dragon Sourcing. All rights reserved. 4
Category
HS
Code
2017
Export
Value in
USD
Billion
Russia’s
share of
Global
Exports
(2017)
Category‘s
share of
Total
Russia’s
Exports
(2017)
Top Products Top Export Destinations
Import Duty
into US
Import Duty
into EU
Copper 74 4,7 3,2% 1,3%
Copper, refined, and copper alloys.
Copper wire
Copper mattes; cement copper
Netherlands, Kuwait,
Greece
1,1% 1,5%
Electrical
machinery,
equipment
85 3.9 0,2% 1,2%
Telephone sets, incl. telephones for
cellular networks or for other wireless
networks;
Radar apparatus, radio navigational aid
apparatus and radio remote control
apparatus
Monitors and projectors, not
incorporating television reception
apparatus
Belarus, Kazakhstan,
China
0,7% 1,6%
Source: International Trade Centre, Worldstopexports.com
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RUSSIA – AN OVERVIEW
© 2018 Dragon Sourcing. All rights reserved. 5
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Country Ranking (out of 190) Comparison
Country
Indicators
RUS TJK SMR BIH KGZ Explanation
Ease of
Doing
Business
35 123 93 86 77
Lack of regulatory
transparency in Russia
introduces significant
uncertainty into the
process of running a
business.
Time to
import
(days)
19 70 13 13 73 Calendar days
Document
s to import
(number)
8 12 N/A 8 11
Documents required for
clearance by
government ministries,
customs authorities, port
and container terminal
authorities, health and
technical control
agencies and banks are
taken into account
Russia – Country Overview
© 2018 Dragon Sourcing. All rights reserved. 6
Source: Countryeconomy.com, Wikipedia.org, Weforum.org, Doingbusiness.org, Indexmundi.com, heritage.com,. Controlrisks.com, Focuseconomics.com, Worldbank.org,
Santandertrade.com
Country Facts (2017)
Population 144.5 million
GDP
USD 1.577
trillion
Annual GDP
Growth
1.5%
Country Indicators
Score/
Value
Global
Competitiveness Index
Score
4.64
Macroeconomic
environment Score
5.03
Labor Market
Efficiency Score
4.33
Domestic market size
index
5.9
Business
Sophistication Score
3.97
Note: Global Competitiveness
Index (1-7 Best) - 38th Place
 Political Outlook: Russia’s political risk index
is 66.5 (indicating moderate stability) in 2018.
Russia has transformed to a more market-
based system from a centrally planned
economy. Also, economic reforms have been
subordinated to the imperatives of political
stability and government longevity.
 Economic Overview: With the Government’s
plan to increase VAT from 18% in 2018 to 20%
in 2019, GDP is expected to grow at 1.4% in
2019. Industry represents over 32% of
Russia's GDP and employs nearly 28% of the
population.
 Situation with investments: FDI flows into
Russia have been declining rapidly since
2014, because of geopolitical tensions
between Russia, Ukraine and the Western
countries. In 2016, FDI flows raised up again,
reaching USD 37.7 billion, mainly as a result of
the privatization of the Rosneft oil company.
During the most, first part of 2017, FDI
declined up to USD 24.83 billion.
The share of FDI in the GDP (1.5%) has
remained low, in general view of the country's
growth and economic potential, and working
capital investments represent a large share of
overall FDI.
Corruption, Tax Rates, Access to financing are considered to be the most problematic factors for doing business in Russia
Note: Country ISO codes
RUS: Russia, TJK: Tajikistan, SMR: San Marino, BIH: Bosnia and Herzegovina, KGZ:
Kyrgyzstan.
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TRADE STATISTICS
© 2018 Dragon Sourcing. All rights reserved. 7
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Export & Import Trade Statistics
© 2018 Dragon Sourcing. All rights reserved. 8
 The total export of Russia in 2017 was around USD 359 billions, and import was about USD 228 billions, resulting in a positive trade balance of USD 131
billions
 Top 3 categories for export in 2017 were: Mineral fuels including oil: USD 173.3 billions (48.5% of total exports); Iron, steel: USD 18.8 billions (5.3%); Gems,
precious metals: USD 11 billions (3.1%). Top 3 categories for import in 2017 were: Machinery including computers: USD 45.3 billions (20% of total imports);
Electrical machinery, equipment: USD 26.7 billions (11.8%); Vehicles: USD 21.4 billions (9.4%).
 Russia has highly positive exports volume in the international trade of both crude and refined oil. In terms of import subcategories, Russia mainly buys heavy
machinery like bulldozers and excavators (up 107%), computer parts or accessories (up 89.2%) and computers including optical readers (up 33.3%) from
2016 to 2017.
 China, Netherlands and Germany are the top, importing markets for Russia.
Source: International Trade Centre, Worldtopexports.com
343.91
285.49
359.15
182.78 182.26
228.21
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
2015 (Billion USD) 2016 (Billion USD) 2017 (Billion USD)
Russia Import/Export yearly
comparison
Export Import
28.02 29.25
21.26
14.05 13.70
38.90
35.61
25.73
19.38 18.21
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
China Netherlands Germany Belarus Turkey
Top Importing Markets for products exported by Russia
(in USD Billion)
2016 (Billion USD) 2017 (Bllion USD)
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Top Export Categories
© 2018 Dragon Sourcing. All rights reserved. 9
Source: International Trade Centre
Top 10 export categories contribute to about 70% of the total export value from Russia
134.7
14.12
8.91
6.80
6.52
5.61
6.64
5.98
3.31
4.05
173.3
18.76
11.05
8.54
7.90
7.53
7.22
6.67
4.71
4.32
0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 200.0
Mineral fuels including oil
Iron, steel
Gems, precious metals
Machinery including computers
Wood
Cereals
Fertilizers
Aluminum
Copper
Electrical machinery, equipment
Top Export Categories from Russia
(Values in USD Billion)
2017 (Bllion USD) 2016 (Billion USD)
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Top Exported Products in this Category
 Petroleum oils
 Coal
 Petroleum gas
 Electrical energy
 Coke and semi-coke of coal
Mineral fuels including oil (HS 27)(1/2)
© 2018 Dragon Sourcing. All rights reserved. 10
Source: International Trade Centre
8.9
8.8
7.1
4.5
4.466.3
2017 (Global export share in terms of HS 27
category %)
Russia Saudi Arabia USA United Arab Emirates Canada Rest of the world
173.3
134.7
216.1
346.1
372.0
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
2017 2016 2015 2014 2013
Export of HS 27 category from Russia
(Billion USD)
29.3
25.2
11.7
9.0 8.3
23.8
17.9
9.0
7.4 6.3
31.5
18.9
10.9 10.6
7.6
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Netherlands China Germany Republic of Korea Poland
Top Importers of HS 27 category from Russia (Billion
USD)
2017 2016 2015
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 According to the latest customs data of Russia (for the
first quarter of 2018), mineral products category
counted for 54% of total export volume of Russia which
was 102 billions USD for the same period.
 For the first quarter of 2018, China (17%), Netherlands
(16%) and Germany (7%) were the key importers of
mineral products category.
 Major petroleum reserves and production are located
in Ural area of Russia. Reserves also can be found in
South-Western part of Russia.
 Key, exporting companies in terms of mineral fuels are:
Rosneft, Gazprom, Lukoil (As per latest, available,
ranking list, formed in 2016).
Mineral fuels including oil (HS 27)(2/2)
© 2018 Dragon Sourcing. All rights reserved. 11
Major Petroleum Reserves in Russia
Source: Worldstopexports.com, Ru-stat.com, Expert.ru, Worldmap.harvard.edu, Google Maps
Vorkuta
Perm
UFASamara
City’s location on the map
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Top Exported Products in this Category
 Iron or non-alloy steel
 Pig iron and spiegeleisen
 Ferro-alloys
 Ferrous waste and scrap
 Flat-rolled products of iron or non-alloy steel
Iron, steel (HS 72) (1/2)
© 2018 Dragon Sourcing. All rights reserved. 12
Source: International Trade Centre
11.6
7.5
7.1
6.0
5.1
62.7
2017 (Global export share in terms of HS 72
category %)
China Japan Germany Republic of Korea Russian Federation Rest of the world
18.8
14.1
15.2
20.6 20.1
0.0
5.0
10.0
15.0
20.0
25.0
2017 2016 2015 2014 2013
Export of HS 72 category from Russia
(Billion USD)
3.5
1.6 1.5
1.3 1.1
2.6
0.8
1.0
0.8 0.7
2.8
1.0 0.9 0.8 0.7
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Turkey United States of
America
Taipei, Chinese Belarus Mexico
Top Importers of HS 72 category from Russia (Billion
USD)
2017 2016 2015
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 According to the latest customs data of Russia (for the
first quarter of 2018), metals and their products
category accounted for 11% of total export volume of
Russia, which was 102 billions USD for the same
period.
 For the first quarter of 2018, Turkey (14%), USA
(11%), Netherlands (9%) were the key importers of
metals and their products category.
 Russian iron and steel industry production is mainly
located around UFA and Orenburg cities in Russia –
Middle-South part of Russia.
 Key, exporting companies in terms of metals are:
Norilskiy Nikel, Rusal and UGMK Group (As per latest,
available, ranking list, formed in 2016).
Iron, steel (HS 72) (2/2)
© 2018 Dragon Sourcing. All rights reserved. 13
Major iron and steel production areas of Russia
Source: Worldstopexports.com, Ru-stat.com, Expert.ru, Commodity.com, Industryabout.com, Google Maps
St.Petersburg
UFA
Orenburg
City’s location on the map
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Top Exported Products in this Category
 Diamonds
 Platinum
 Gold
 Silver
 Precious and semi-precious stones
Gems, precious metals (HS 71)(1/2)
© 2018 Dragon Sourcing. All rights reserved. 14
Source: International Trade Centre
13.7
13.3
9.5
6.7
6.0
60.3
2017 (Global export share in terms of HS 71 category
%)
China, Hong Kong Switzerland United States of America
India United Arab Emirates Rest of the world
11.0
8.9
7.9
11.8
14.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2017 2016 2015 2014 2013
Export of HS 71 category from Russia
(Billion USD)
2.9
1.6
1.4
1.0
0.8
2.8
0.8 0.9 0.9
0.6
2.3
0.1
1.3
1.0
0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Belgium United Kingdom Switzerland India United States of
America
Top Importers of HS 71 category from Russia
(Billion USD)
2017 2016 2015
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 According to the latest customs data of Russia (for
the first quarter of 2018), gems category counted for
3% of total export volume of Russia, which was 102
billions USD for the same period.
 For the first quarter of 2018, Belgium (35%), India
(13%) and England (11%) were the key importers of
gems category.
 Precious metals resources are mainly located in the
Middle and Eastern parts of Russia.
 The key, exporting companies of gems category are:
Aprosa, Company Adamas, Polymetal (As per latest,
available, ranking list, formed in 2016).
Gems, precious metals (HS 71)(2/2)
© 2018 Dragon Sourcing. All rights reserved. 15
Diamond deposit zones in Russia
Source: Ru-stat.com, Expert.ru, Mapsofworld.com, Google Maps
Gold deposits zones in Russia
Yakutsk
City’s location on the map
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Top Exported Products in this Category
 Turbojets, turbopropellers and other gas turbines
 Nuclear reactors
 Machinery, plant or laboratory equipment
 Engines and motors
 Pumps for liquids
Machinery including computers (HS 84)(1/2)
© 2018 Dragon Sourcing. All rights reserved. 16
Source: International Trade Centre
18.4
11.8
9.7
6.6
4.8
48.7
2017 (Global export share in terms of HS 84 category
%)
China Germany United States of America Japan Italy Rest of the world
8.5
6.8
8.7
9.3
8.9
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2017 2016 2015 2014 2013
Export of HS 84 category from Russia
(Billion USD)
1.6
1.0 1.0
0.7 0.6
1.2
0.9
0.6 0.6 0.7
1.5
1.0
0.6 0.5
0.8
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
China Kazakhstan Belarus India Ukraine
Top Importers of HS 84 category from Russia
(Billion USD)
2017 2016 2015
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 According to the latest customs data of Russia (for
the first quarter of 2018), machinery products
category accounted for 2% of total export volume of
Russia, which was 102 billions USD for the same
period.
 For the first quarter of 2018, Belarus (16%),
Kazakhstan (14%), India (11%) were the key
importers of machinery products category.
 Russia produces a wide range of machines,
appliances and devices for international consumers.
For example, Europe imports mill machinery made
by Altai company CSort. Its color sorting machines
are well sold in Poland, France, Germany, Spain. St.
Petersburg-based company Unicum Vending
produces vending machines that are in demand
abroad. The company’s online telemetry and remote
quality control systems were well sold in the UK:
Unicum Vending received a government contract to
supply vending equipment to the country.
 Cryogenmash plant, which is based close to
Moscow, manufactures cryogenic units, pipelines
and systems, which are well exported to China and
India. Systems designed by Cryogenmash are used
at spaceports all over the world.
Machinery including computers (HS 84)(2/2)
© 2018 Dragon Sourcing. All rights reserved. 17
The main machinery production area of Russia
is focused in Western Part, close to Moscow.
Source: Ru-stat.com, Rbth.com, Madeinrussia.com, Urbanica.spb.ru, Google Maps
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Top Exported Products in this Category
 Wood sawn or chipped lengthwise, sliced or peeled
 Wood in the rough, whether or not stripped of bark or sapwood
 Plywood, veneered panel and similar laminated wood
 Fibreboard of wood or other ligneous materials
 Particle board, oriented strand board "OSB" and similar board
Wood (HS 44) (1/2)
© 2018 Dragon Sourcing. All rights reserved. 18
Source: International Trade Centre
10.3
10.0
7.1
6.6
5.8
60.2
2017 (Global export share in terms of HS 44 category
%)
Canada China United States of America
Germany Russian Federation Rest of the world
7.9
6.5 6.3
7.8
7.3
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2017 2016 2015 2014 2013
Export of HS 44 category from Russia
(Billion USD)
3.3
0.5 0.5 0.4 0.3
2.6
0.4 0.4
0.3 0.3
2.2
0.3 0.4 0.3 0.4
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
China Japan Finland Uzbekistan Egypt
Top Importers of HS 44 category from Russia
(Billion USD)
2017 2016 2015
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 According to the latest customs data of Russia (for
the first quarter of 2018), wood category accounted
for 2% of total export volume of Russia, which was
102 billions USD for the same period.
 For the first quarter of 2018, China (42%), Japan
(5%), Uzbekistan (5%) were the key importers of
wood category products.
 Russian Federation, possesses around 815 million
hectares of forest and other wooded land, which
constitutes to 49.8% of the total land area. Around
795 million hectares are primary (33,5%) or
otherwise naturally regenerated forest (64.1%),
and the remaining part of 20 million hectares is
planted.
 The key, exporting companies of wood category
are: Ilim Group, Segezha Group, Sveza Group (As
per latest, available, ranking list, formed in 2016).
Wood (HS 44) (2/2)
© 2018 Dragon Sourcing. All rights reserved. 19
Biggest forest resources areas of Russia
Source: Ru-stat.com, Expert.ru, Timbertradeportal.com, Madeinrussia.com, Old.forest.ru, Google Maps
www.dragonsourcing.com
Top Exported Products in this Category
 Wheat and meslin
 Maize or corn
 Barley
 Rice
 Buckwheat, millet, canary seed and other cereals
Cereals (HS 10)(1/2)
© 2018 Dragon Sourcing. All rights reserved. 20
Source: International Trade Centre
18.2
7.3
7.2
6.8
6.4
54.1
2017 (Global export share in terms of HS 10 category
%)
United States of America Russian Federation India
Argentina Australia Rest of the world
7.5
5.6 5.7
7.1
4.8
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2017 2016 2015 2014 2013
Export of HS 10 category from Russia
(Billion USD)
1.4
0.8
0.4 0.3 0.3
1.0
0.6
0.3 0.3
0.02
0.8 0.8
0.4
0.1
0.0001
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Egypt Turkey Iran Bangladesh Vietnam
Top Importers of HS 10 category from Russia (Billion
USD)
2017 2016 2015
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 According to the latest customs data of Russia
(for the first quarter of 2018), cereals category
products accounted for 3% of total export volume
of Russia, which was 102 billions USD for the
same period.
 Russia’s total 2017-18 grains exports was at 41.8
million tonnes, which makes the country the
second largest exporter in the world, after the
United States. Its total grains exports in 2016-17
was 36.2 million tonnes. The total for 2017-18
includes wheat exports of 32 million tonnes, up in
comparison to previous year’s 28 million. Russia’s
maize exports in 2017-18 was put at 5.6 million
tonnes, up from 5.3 million the year before.
Russian barley exports in 2017-18 was around
4.1 million tonnes, of which 4 million would be
feed, up from 2.8 million, of which 100,000 were
feed, the year before.
 Egypt (19% Q1 2018) and Turkey (16% Q1 2018)
are the main markets for Russian wheat exports,
although Russian exporters are actively trying to
develop other markets for Russian wheat
 Most grain crops processed in Russia are based
on low-cost agro-technologies with a minimum
use of agrochemicals. The production is mainly
focused in South-West part of Russia
 In July 2018, the key exporters of cereals in
Russia were: TD Rif, Glenkor, Aston.
Cereals (HS 10)(2/2)
© 2018 Dragon Sourcing. All rights reserved. 21
Cereals, production zones in Russia
Source: Ru-stat.com, Agroinvestor.ru, World-grain.com, Ipad.fas.usda.gov, Google Maps
www.dragonsourcing.com
Top Exported Products in this Category
 Mineral or chemical fertilizers
 Mineral or chemical nitrogenous fertilizers
 Mineral or chemical potassic fertilizers
 Animal or vegetable fertilizers
 Mineral or chemical phosphatic fertilizers
Fertilizers (HS 31)(1/2)
© 2018 Dragon Sourcing. All rights reserved. 22
Source: International Trade Centre
14.2
12.0
9.0
7.6
5.1
52.1
2017 (Global export share in terms of HS 31 category
%)
Russian Federation China Canada
United States of America Morocco Rest of the world
7.2
6.6
8.9 9.0 9.1
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2017 2016 2015 2014 2013
Export of HS 31 category from Russia
(Billion USD)
1.4
0.7 0.7
0.6
0.3
1.2
0.5
0.7
0.5
0.3
1.6
0.5
0.8
1.1
0.6
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
Brazil Ukraine China USA India
Top Importers of HS 31 category from Russia
(Billion USD)
2017 2016 2015
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 Export of fertilizers from Russia is growing: In
January 2018 it was about 200,3 millions USD
which is 30,3% higher in comparison to the
same amount in 2017.
 The key, importing partners of Russia in terms
of fertilizers market in 2018 are: China,
Ukraine, Estonia, Latvia, Brazil, Poland. 63%
of all chemical products exported from Russia
have final destination in the above countries.
 Russia has positioned itself as a large and
reliable exporter of MAP/DAP, NPK,
ammonia, urea, AN and potash (MOP). The
Country is self-sufficient for all its
requirements of nitrogen products. Russia is
also the world's second largest ammonia and
potash exporter. About to 85% of potash
production is exported. The country is
endowed with significant reserves of natural
gas, phosphate and potash, providing the
impetus for major capacity developments in all
segments over the next decade.
 There are several, global producers and key
exporters of fertilizers, located in western part
of Russia, mainly in Moscow and
Moskovskaya oblast: Acron, Phosagro,
Uralchem etc.
Fertilizers (HS 31)(2/2)
© 2018 Dragon Sourcing. All rights reserved. 23
Major, production zone of fertilizers in Russia
Source: Delonovosti.ru, Seanews.ru, Fertilizer.org, Ontheworldmap.com, DS agent research, Google Maps
www.dragonsourcing.com
Top Exported Products in this Category
 Unwrought aluminium
 Aluminium wire
 Plates, sheets and strip, of aluminium
 Bars, rods and profiles, of aluminium
 Aluminium foil
Aluminum (HS 76)(1/2)
© 2018 Dragon Sourcing. All rights reserved. 24
Source: International Trade Centre
12.8
9.3
6.6
5.6
5.0
60.7
2017 (Global export share in terms of HS 76
category %)
China Germany United States of America Canada Netherlands Rest of the world
6.7
6.0
7.1
6.3
7.1
5.4
5.6
5.8
6.0
6.2
6.4
6.6
6.8
7.0
7.2
7.4
Export of HS 76 category from Russia
(Billion USD)
1.8
0.9 0.8
0.5 0.4
1.7
0.7 0.7
0.4
0.3
1.1 1.0
0.8
1.6
0.5
0.0
0.5
1.0
1.5
2.0
USA Turkey Japan Netherlands Republic of
Korea
Top Importers of HS 76 category from Russia
(Billion USD)
2017 2016 2015
www.dragonsourcing.com
 Export of aluminum from Russia in January-June
2018 accounted for 2,8 billions USD which is 32,1%
higher in comparison to the same period in 2017.
 According to the latest report, formed in 2017, USA
was the key importer of Russian aluminum with
27% from total export. Second and third, key
aluminum importers were Turkey (13,8%) and
Japan (12,3%).
 UC Rusal is the biggest aluminum producer of the
Russian Federation.
 Because of the political situation in the world, in
2018 and sanctions, applied from the side of USA
government in terms of Rusal company and it’s
owner Oleg Deripaska the total aluminum export of
Russia might decrease on 5-10% in 2018. However,
as per forecasts of industry experts, the negative
influence of sanctions can be overcome in 2019
because of increasing demand of aluminum from
the side of China and local, Russian market.
 The nine primary aluminum smelting plants are
owned by producer - Rusal. With low energy cost in
Russia, these plants are very efficient The Rusal is
the key and biggest exporter of aluminum from
Russia.
Aluminum (HS 76)(2/2)
© 2018 Dragon Sourcing. All rights reserved. 25
Rusal’s production zones all over Russia.
Source: Tass.ru, Rns.online, Moneymakerfactory.ru, Alcircle.com, Rt.com, Aluminium.ca, Google Maps
Murmansk
St.Petersburg
Volgograd
www.dragonsourcing.com
Top Exported Products in this Category
 Copper, refined, and copper alloys
 Copper wire
 Copper mattes; cement copper
 Powders and flakes, of copper
 Bars, rods and profiles, of copper
Copper (HS 74)(1/2)
© 2018 Dragon Sourcing. All rights reserved. 26
Source: International Trade Centre
12.1
8.4
5.1
4.9
4.4
65.1
2017 (Global export share in terms of HS 74 category
%)
Chile Germany Japan United States of America China Rest of the world
4.7
3.3
4.5
4.9 5.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2017 2016 2015 2014 2013
Export of HS 74 category from Russia
(Billion USD)
1.8
0.7
0.5 0.5
0.3
1.1
0.5 0.5 0.00001
0.2
2.4
0.2
0.02
0.1 0.1
0.0
0.5
1.0
1.5
2.0
2.5
Netherlands Kuwait Greece China Switzerland
Top Importers of HS 74 category from Russia
(Billion USD)
2017 2016 2015
www.dragonsourcing.com
 According to the latest customs data of Russia (for
the first quarter of 2018), export of copper category
products accounted for 1,97 billions USD which is
52,5% higher in comparison to the same period in
2017.
 According to the latest report, formed in 2017, the
key countries-importers of copper category products
from Russia were: Netherlands (40,8% of total,
Russian export), Kuwait (13,4% of total, Russian
export), Greece and China (10,2% for China and
9,5% for Greece of total, Russian export).
 Russia's copper reserves are mainly located in
Siberia (70 percent) and the Urals (20 percent). A
large percentage of Russian reserves are in the
remote northern and eastern regions, away from
major populations and infrastructure.
 Russia's copper deposits are various in size and
composed of a variety of mineral types. The copper
deposits in the country include ultramafic/mafic
intrusion-hosted, VMS, SEDEX, stratabound
sedimentary rock-hosted, porphyry and skarn.The
well-known and large-sized copper deposits in
Russia include: the Udokan, Talnakh, Podolsk.
 The Key, exporters are: Norilskiy Nikel, Russkaya
Mednaya Compania, Uralskiy GMK.
Copper (HS 74)(2/2)
© 2018 Dragon Sourcing. All rights reserved. 27
Main, copper, mining zones in Russia
Source: Moneymakerfactory.ru, Ruscable.ru, Nasdaq.com, Worldatlas.com, Google Maps
Udokan
Talnakh
Podolsk
City’s location on the map
www.dragonsourcing.com
Top Exported Products in this Category
 Telephone sets
 Radar apparatus, radio navigational aid apparatus and radio remote
control apparatus
 Monitors and projectors, not incorporating television reception
apparatus; reception apparatus
 Insulated "incl. enamelled or anodised" wire, cable "incl. coaxial cable"
and other insulated
 Electrical machines and apparatus, having individual functions
Electrical machinery, equipment (HS 85)(1/2)
© 2018 Dragon Sourcing. All rights reserved. 28
Source: International Trade Centre
23.3
11.0
6.8
6.45.8
46.7
2017 (Global export share in terms of HS 85 category
%)
China China, Hong Kong United States of America
Republic of Korea Germany Rest of the world
4.3
4.0
3.5
4.9 5.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2017 2016 2015 2014 2013
Export of HS 85 category from Russia
(Billion USD)
0.7 0.7
0.6
0.3
0.2
0.6
0.6
0.2
0.3
0.2
0.5
0.6
0.06
0.4
0.2
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Belarus Kazakhstan China India Ukraine
Top Importers of HS 85 category from Russia
(Billion USD)
2017 2016 2015
www.dragonsourcing.com
 According to the latest customs data of Russia (for
the first quarter of 2018), export of electrical
machinery category products accounted for 2,52
billions USD which is close to the amount exported
in first quarter of 2017.
 Belarus (16%) and Kazakhstan (14%) are the key
importers of electrical machinery category products
in Q1 2018.
 The main production area of electrical machinery
and equipment is located in Western part of Russia,
in Moscow and Moskovskaya oblast.
 The key producing companies of electrical
machinery and equipment are: Cheaz, Ekra,
Ekoresurs.
Electrical machinery, equipment (HS 85)(2/2)
© 2018 Dragon Sourcing. All rights reserved. 29
Major production zone of Russia
Source: El-info.ru, Promdevelop.ru, Ru-stat.com, Worldstopexports.com Ontheworldmap.com, Google Maps
www.dragonsourcing.com
TRADE AGREEMENTS
© 2018 Dragon Sourcing. All rights reserved. 30
www.dragonsourcing.com
Russia – Trade Agreements
© 2018 Dragon Sourcing. All rights reserved. 31
Agreements Region/ Countries Involved
Europe, USA, Canada
Currently, nine countries (Russia, Belarus, Ukraine, Moldova, Tajikistan, Armenia, Kazakhstan, Kyrgyzstan,
and Uzbekistan) from the Commonwealth of Independent States (CIS) ratified a Free Trade
Agreement (FTA), which provides the free movement of goods within the territory of the member states. Also
Russia has agreement about partnership and trading with EU members. Plus Russia has USSR, trade
agreement with USA and trade and commercial relationships agreement with Canada. Russia is a member of
agreement about free trade zone creation plus contract about Eurasian Economic Community.
Other Trade Agreements
Asia Russia has active trading agreement between USSR and Japan.
Source: Export.gov, Wto.ru
Russia has 7 agreements at the moment:

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Study on Sourcing Opportunities in Russia

  • 1. Dragon Sourcing Your Tailored Approach to Emerging Markets www.dragonsourcing.com Study on Sourcing Opportunities in Russia Aug, 2018
  • 2. www.dragonsourcing.com© 2018 Dragon Sourcing. All rights reserved. 2 Table of Contents  Executive Summary  Russia – An Overview  Russia – Country Overview  Trade Statistics  Export & Import Trade Statistics  Top Export Categories  Mineral fuels including oil  Iron, steel  Gems, precious metals  Machinery including computers  Wood  Cereals  Fertilizers  Aluminum  Copper  Electrical machinery, equipment  Trade Agreements
  • 3. www.dragonsourcing.com Executive Summary (1/2) © 2018 Dragon Sourcing. All rights reserved. 3 Category HS Code 2017 Export Value in USD Billion Russia’s share of Global Exports (2017) Category‘s share of Total Russia’s Exports (2017) Top Products Top Export Destinations Import Duty into US Import Duty into EU Mineral Fuel 27 173.3 8,9% 48,5% Petroleum oils Coal Petroleum gas Netherlands, China, Germany 2,1% 0,4% Iron, steel 72 18.8 5,1% 5,3% Semi-finished products of iron or steel Flat-rolled products of iron or steel Pig iron and spiegeleisen Turkey, USA, China 0,2% 0,3% Gems, precious metals 71 11 1.7% 3,1% Diamonds Platinum Gold Belgium, United Kingdom, Switzerland 1,4% 0,4% Machinery including computers 84 8,5 0,4% 2,4% Turbojets, other gas turbines Nuclear reactors Machinery, plant or laboratory equipment China, Kazakhstan, Belarus 0,7% 1,2% Wood 44 7,9 5,8% 2,2% Wood sawn or chipped lengthwise Wood in the rough Plywood, veneered panel and similar laminated wood China, Japan, Finland 1,6% 2% Cereals 10 7,5 7,3% 2,1% Wheat and meslin Maize or corn Barley Egypt, Turkey, Iran 1,3% 9,9% Fertilizers 31 7,2 14,2% 2% Mineral or chemical fertilizers Mineral or chemical nitrogenous fertilizers Mineral or chemical potassic fertilizers Brazil, Ukraine, China 0% 4,1% Aluminum 76 6,7 3,8% 1,9% Unwrought aluminium Aluminium wire Plates, sheets and strip, of aluminium USA, Turkey, Japan 2,3% 5,4% Source: International Trade Centre, Worldstopexports.com
  • 4. www.dragonsourcing.com Executive Summary (2/2) © 2018 Dragon Sourcing. All rights reserved. 4 Category HS Code 2017 Export Value in USD Billion Russia’s share of Global Exports (2017) Category‘s share of Total Russia’s Exports (2017) Top Products Top Export Destinations Import Duty into US Import Duty into EU Copper 74 4,7 3,2% 1,3% Copper, refined, and copper alloys. Copper wire Copper mattes; cement copper Netherlands, Kuwait, Greece 1,1% 1,5% Electrical machinery, equipment 85 3.9 0,2% 1,2% Telephone sets, incl. telephones for cellular networks or for other wireless networks; Radar apparatus, radio navigational aid apparatus and radio remote control apparatus Monitors and projectors, not incorporating television reception apparatus Belarus, Kazakhstan, China 0,7% 1,6% Source: International Trade Centre, Worldstopexports.com
  • 5. www.dragonsourcing.com RUSSIA – AN OVERVIEW © 2018 Dragon Sourcing. All rights reserved. 5
  • 6. www.dragonsourcing.com Country Ranking (out of 190) Comparison Country Indicators RUS TJK SMR BIH KGZ Explanation Ease of Doing Business 35 123 93 86 77 Lack of regulatory transparency in Russia introduces significant uncertainty into the process of running a business. Time to import (days) 19 70 13 13 73 Calendar days Document s to import (number) 8 12 N/A 8 11 Documents required for clearance by government ministries, customs authorities, port and container terminal authorities, health and technical control agencies and banks are taken into account Russia – Country Overview © 2018 Dragon Sourcing. All rights reserved. 6 Source: Countryeconomy.com, Wikipedia.org, Weforum.org, Doingbusiness.org, Indexmundi.com, heritage.com,. Controlrisks.com, Focuseconomics.com, Worldbank.org, Santandertrade.com Country Facts (2017) Population 144.5 million GDP USD 1.577 trillion Annual GDP Growth 1.5% Country Indicators Score/ Value Global Competitiveness Index Score 4.64 Macroeconomic environment Score 5.03 Labor Market Efficiency Score 4.33 Domestic market size index 5.9 Business Sophistication Score 3.97 Note: Global Competitiveness Index (1-7 Best) - 38th Place  Political Outlook: Russia’s political risk index is 66.5 (indicating moderate stability) in 2018. Russia has transformed to a more market- based system from a centrally planned economy. Also, economic reforms have been subordinated to the imperatives of political stability and government longevity.  Economic Overview: With the Government’s plan to increase VAT from 18% in 2018 to 20% in 2019, GDP is expected to grow at 1.4% in 2019. Industry represents over 32% of Russia's GDP and employs nearly 28% of the population.  Situation with investments: FDI flows into Russia have been declining rapidly since 2014, because of geopolitical tensions between Russia, Ukraine and the Western countries. In 2016, FDI flows raised up again, reaching USD 37.7 billion, mainly as a result of the privatization of the Rosneft oil company. During the most, first part of 2017, FDI declined up to USD 24.83 billion. The share of FDI in the GDP (1.5%) has remained low, in general view of the country's growth and economic potential, and working capital investments represent a large share of overall FDI. Corruption, Tax Rates, Access to financing are considered to be the most problematic factors for doing business in Russia Note: Country ISO codes RUS: Russia, TJK: Tajikistan, SMR: San Marino, BIH: Bosnia and Herzegovina, KGZ: Kyrgyzstan.
  • 7. www.dragonsourcing.com TRADE STATISTICS © 2018 Dragon Sourcing. All rights reserved. 7
  • 8. www.dragonsourcing.com Export & Import Trade Statistics © 2018 Dragon Sourcing. All rights reserved. 8  The total export of Russia in 2017 was around USD 359 billions, and import was about USD 228 billions, resulting in a positive trade balance of USD 131 billions  Top 3 categories for export in 2017 were: Mineral fuels including oil: USD 173.3 billions (48.5% of total exports); Iron, steel: USD 18.8 billions (5.3%); Gems, precious metals: USD 11 billions (3.1%). Top 3 categories for import in 2017 were: Machinery including computers: USD 45.3 billions (20% of total imports); Electrical machinery, equipment: USD 26.7 billions (11.8%); Vehicles: USD 21.4 billions (9.4%).  Russia has highly positive exports volume in the international trade of both crude and refined oil. In terms of import subcategories, Russia mainly buys heavy machinery like bulldozers and excavators (up 107%), computer parts or accessories (up 89.2%) and computers including optical readers (up 33.3%) from 2016 to 2017.  China, Netherlands and Germany are the top, importing markets for Russia. Source: International Trade Centre, Worldtopexports.com 343.91 285.49 359.15 182.78 182.26 228.21 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00 400.00 2015 (Billion USD) 2016 (Billion USD) 2017 (Billion USD) Russia Import/Export yearly comparison Export Import 28.02 29.25 21.26 14.05 13.70 38.90 35.61 25.73 19.38 18.21 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 China Netherlands Germany Belarus Turkey Top Importing Markets for products exported by Russia (in USD Billion) 2016 (Billion USD) 2017 (Bllion USD)
  • 9. www.dragonsourcing.com Top Export Categories © 2018 Dragon Sourcing. All rights reserved. 9 Source: International Trade Centre Top 10 export categories contribute to about 70% of the total export value from Russia 134.7 14.12 8.91 6.80 6.52 5.61 6.64 5.98 3.31 4.05 173.3 18.76 11.05 8.54 7.90 7.53 7.22 6.67 4.71 4.32 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 200.0 Mineral fuels including oil Iron, steel Gems, precious metals Machinery including computers Wood Cereals Fertilizers Aluminum Copper Electrical machinery, equipment Top Export Categories from Russia (Values in USD Billion) 2017 (Bllion USD) 2016 (Billion USD)
  • 10. www.dragonsourcing.com Top Exported Products in this Category  Petroleum oils  Coal  Petroleum gas  Electrical energy  Coke and semi-coke of coal Mineral fuels including oil (HS 27)(1/2) © 2018 Dragon Sourcing. All rights reserved. 10 Source: International Trade Centre 8.9 8.8 7.1 4.5 4.466.3 2017 (Global export share in terms of HS 27 category %) Russia Saudi Arabia USA United Arab Emirates Canada Rest of the world 173.3 134.7 216.1 346.1 372.0 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 2017 2016 2015 2014 2013 Export of HS 27 category from Russia (Billion USD) 29.3 25.2 11.7 9.0 8.3 23.8 17.9 9.0 7.4 6.3 31.5 18.9 10.9 10.6 7.6 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 Netherlands China Germany Republic of Korea Poland Top Importers of HS 27 category from Russia (Billion USD) 2017 2016 2015
  • 11. www.dragonsourcing.com  According to the latest customs data of Russia (for the first quarter of 2018), mineral products category counted for 54% of total export volume of Russia which was 102 billions USD for the same period.  For the first quarter of 2018, China (17%), Netherlands (16%) and Germany (7%) were the key importers of mineral products category.  Major petroleum reserves and production are located in Ural area of Russia. Reserves also can be found in South-Western part of Russia.  Key, exporting companies in terms of mineral fuels are: Rosneft, Gazprom, Lukoil (As per latest, available, ranking list, formed in 2016). Mineral fuels including oil (HS 27)(2/2) © 2018 Dragon Sourcing. All rights reserved. 11 Major Petroleum Reserves in Russia Source: Worldstopexports.com, Ru-stat.com, Expert.ru, Worldmap.harvard.edu, Google Maps Vorkuta Perm UFASamara City’s location on the map
  • 12. www.dragonsourcing.com Top Exported Products in this Category  Iron or non-alloy steel  Pig iron and spiegeleisen  Ferro-alloys  Ferrous waste and scrap  Flat-rolled products of iron or non-alloy steel Iron, steel (HS 72) (1/2) © 2018 Dragon Sourcing. All rights reserved. 12 Source: International Trade Centre 11.6 7.5 7.1 6.0 5.1 62.7 2017 (Global export share in terms of HS 72 category %) China Japan Germany Republic of Korea Russian Federation Rest of the world 18.8 14.1 15.2 20.6 20.1 0.0 5.0 10.0 15.0 20.0 25.0 2017 2016 2015 2014 2013 Export of HS 72 category from Russia (Billion USD) 3.5 1.6 1.5 1.3 1.1 2.6 0.8 1.0 0.8 0.7 2.8 1.0 0.9 0.8 0.7 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Turkey United States of America Taipei, Chinese Belarus Mexico Top Importers of HS 72 category from Russia (Billion USD) 2017 2016 2015
  • 13. www.dragonsourcing.com  According to the latest customs data of Russia (for the first quarter of 2018), metals and their products category accounted for 11% of total export volume of Russia, which was 102 billions USD for the same period.  For the first quarter of 2018, Turkey (14%), USA (11%), Netherlands (9%) were the key importers of metals and their products category.  Russian iron and steel industry production is mainly located around UFA and Orenburg cities in Russia – Middle-South part of Russia.  Key, exporting companies in terms of metals are: Norilskiy Nikel, Rusal and UGMK Group (As per latest, available, ranking list, formed in 2016). Iron, steel (HS 72) (2/2) © 2018 Dragon Sourcing. All rights reserved. 13 Major iron and steel production areas of Russia Source: Worldstopexports.com, Ru-stat.com, Expert.ru, Commodity.com, Industryabout.com, Google Maps St.Petersburg UFA Orenburg City’s location on the map
  • 14. www.dragonsourcing.com Top Exported Products in this Category  Diamonds  Platinum  Gold  Silver  Precious and semi-precious stones Gems, precious metals (HS 71)(1/2) © 2018 Dragon Sourcing. All rights reserved. 14 Source: International Trade Centre 13.7 13.3 9.5 6.7 6.0 60.3 2017 (Global export share in terms of HS 71 category %) China, Hong Kong Switzerland United States of America India United Arab Emirates Rest of the world 11.0 8.9 7.9 11.8 14.3 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 2017 2016 2015 2014 2013 Export of HS 71 category from Russia (Billion USD) 2.9 1.6 1.4 1.0 0.8 2.8 0.8 0.9 0.9 0.6 2.3 0.1 1.3 1.0 0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Belgium United Kingdom Switzerland India United States of America Top Importers of HS 71 category from Russia (Billion USD) 2017 2016 2015
  • 15. www.dragonsourcing.com  According to the latest customs data of Russia (for the first quarter of 2018), gems category counted for 3% of total export volume of Russia, which was 102 billions USD for the same period.  For the first quarter of 2018, Belgium (35%), India (13%) and England (11%) were the key importers of gems category.  Precious metals resources are mainly located in the Middle and Eastern parts of Russia.  The key, exporting companies of gems category are: Aprosa, Company Adamas, Polymetal (As per latest, available, ranking list, formed in 2016). Gems, precious metals (HS 71)(2/2) © 2018 Dragon Sourcing. All rights reserved. 15 Diamond deposit zones in Russia Source: Ru-stat.com, Expert.ru, Mapsofworld.com, Google Maps Gold deposits zones in Russia Yakutsk City’s location on the map
  • 16. www.dragonsourcing.com Top Exported Products in this Category  Turbojets, turbopropellers and other gas turbines  Nuclear reactors  Machinery, plant or laboratory equipment  Engines and motors  Pumps for liquids Machinery including computers (HS 84)(1/2) © 2018 Dragon Sourcing. All rights reserved. 16 Source: International Trade Centre 18.4 11.8 9.7 6.6 4.8 48.7 2017 (Global export share in terms of HS 84 category %) China Germany United States of America Japan Italy Rest of the world 8.5 6.8 8.7 9.3 8.9 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 2017 2016 2015 2014 2013 Export of HS 84 category from Russia (Billion USD) 1.6 1.0 1.0 0.7 0.6 1.2 0.9 0.6 0.6 0.7 1.5 1.0 0.6 0.5 0.8 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 China Kazakhstan Belarus India Ukraine Top Importers of HS 84 category from Russia (Billion USD) 2017 2016 2015
  • 17. www.dragonsourcing.com  According to the latest customs data of Russia (for the first quarter of 2018), machinery products category accounted for 2% of total export volume of Russia, which was 102 billions USD for the same period.  For the first quarter of 2018, Belarus (16%), Kazakhstan (14%), India (11%) were the key importers of machinery products category.  Russia produces a wide range of machines, appliances and devices for international consumers. For example, Europe imports mill machinery made by Altai company CSort. Its color sorting machines are well sold in Poland, France, Germany, Spain. St. Petersburg-based company Unicum Vending produces vending machines that are in demand abroad. The company’s online telemetry and remote quality control systems were well sold in the UK: Unicum Vending received a government contract to supply vending equipment to the country.  Cryogenmash plant, which is based close to Moscow, manufactures cryogenic units, pipelines and systems, which are well exported to China and India. Systems designed by Cryogenmash are used at spaceports all over the world. Machinery including computers (HS 84)(2/2) © 2018 Dragon Sourcing. All rights reserved. 17 The main machinery production area of Russia is focused in Western Part, close to Moscow. Source: Ru-stat.com, Rbth.com, Madeinrussia.com, Urbanica.spb.ru, Google Maps
  • 18. www.dragonsourcing.com Top Exported Products in this Category  Wood sawn or chipped lengthwise, sliced or peeled  Wood in the rough, whether or not stripped of bark or sapwood  Plywood, veneered panel and similar laminated wood  Fibreboard of wood or other ligneous materials  Particle board, oriented strand board "OSB" and similar board Wood (HS 44) (1/2) © 2018 Dragon Sourcing. All rights reserved. 18 Source: International Trade Centre 10.3 10.0 7.1 6.6 5.8 60.2 2017 (Global export share in terms of HS 44 category %) Canada China United States of America Germany Russian Federation Rest of the world 7.9 6.5 6.3 7.8 7.3 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 2017 2016 2015 2014 2013 Export of HS 44 category from Russia (Billion USD) 3.3 0.5 0.5 0.4 0.3 2.6 0.4 0.4 0.3 0.3 2.2 0.3 0.4 0.3 0.4 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 China Japan Finland Uzbekistan Egypt Top Importers of HS 44 category from Russia (Billion USD) 2017 2016 2015
  • 19. www.dragonsourcing.com  According to the latest customs data of Russia (for the first quarter of 2018), wood category accounted for 2% of total export volume of Russia, which was 102 billions USD for the same period.  For the first quarter of 2018, China (42%), Japan (5%), Uzbekistan (5%) were the key importers of wood category products.  Russian Federation, possesses around 815 million hectares of forest and other wooded land, which constitutes to 49.8% of the total land area. Around 795 million hectares are primary (33,5%) or otherwise naturally regenerated forest (64.1%), and the remaining part of 20 million hectares is planted.  The key, exporting companies of wood category are: Ilim Group, Segezha Group, Sveza Group (As per latest, available, ranking list, formed in 2016). Wood (HS 44) (2/2) © 2018 Dragon Sourcing. All rights reserved. 19 Biggest forest resources areas of Russia Source: Ru-stat.com, Expert.ru, Timbertradeportal.com, Madeinrussia.com, Old.forest.ru, Google Maps
  • 20. www.dragonsourcing.com Top Exported Products in this Category  Wheat and meslin  Maize or corn  Barley  Rice  Buckwheat, millet, canary seed and other cereals Cereals (HS 10)(1/2) © 2018 Dragon Sourcing. All rights reserved. 20 Source: International Trade Centre 18.2 7.3 7.2 6.8 6.4 54.1 2017 (Global export share in terms of HS 10 category %) United States of America Russian Federation India Argentina Australia Rest of the world 7.5 5.6 5.7 7.1 4.8 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 2017 2016 2015 2014 2013 Export of HS 10 category from Russia (Billion USD) 1.4 0.8 0.4 0.3 0.3 1.0 0.6 0.3 0.3 0.02 0.8 0.8 0.4 0.1 0.0001 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 Egypt Turkey Iran Bangladesh Vietnam Top Importers of HS 10 category from Russia (Billion USD) 2017 2016 2015
  • 21. www.dragonsourcing.com  According to the latest customs data of Russia (for the first quarter of 2018), cereals category products accounted for 3% of total export volume of Russia, which was 102 billions USD for the same period.  Russia’s total 2017-18 grains exports was at 41.8 million tonnes, which makes the country the second largest exporter in the world, after the United States. Its total grains exports in 2016-17 was 36.2 million tonnes. The total for 2017-18 includes wheat exports of 32 million tonnes, up in comparison to previous year’s 28 million. Russia’s maize exports in 2017-18 was put at 5.6 million tonnes, up from 5.3 million the year before. Russian barley exports in 2017-18 was around 4.1 million tonnes, of which 4 million would be feed, up from 2.8 million, of which 100,000 were feed, the year before.  Egypt (19% Q1 2018) and Turkey (16% Q1 2018) are the main markets for Russian wheat exports, although Russian exporters are actively trying to develop other markets for Russian wheat  Most grain crops processed in Russia are based on low-cost agro-technologies with a minimum use of agrochemicals. The production is mainly focused in South-West part of Russia  In July 2018, the key exporters of cereals in Russia were: TD Rif, Glenkor, Aston. Cereals (HS 10)(2/2) © 2018 Dragon Sourcing. All rights reserved. 21 Cereals, production zones in Russia Source: Ru-stat.com, Agroinvestor.ru, World-grain.com, Ipad.fas.usda.gov, Google Maps
  • 22. www.dragonsourcing.com Top Exported Products in this Category  Mineral or chemical fertilizers  Mineral or chemical nitrogenous fertilizers  Mineral or chemical potassic fertilizers  Animal or vegetable fertilizers  Mineral or chemical phosphatic fertilizers Fertilizers (HS 31)(1/2) © 2018 Dragon Sourcing. All rights reserved. 22 Source: International Trade Centre 14.2 12.0 9.0 7.6 5.1 52.1 2017 (Global export share in terms of HS 31 category %) Russian Federation China Canada United States of America Morocco Rest of the world 7.2 6.6 8.9 9.0 9.1 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 2017 2016 2015 2014 2013 Export of HS 31 category from Russia (Billion USD) 1.4 0.7 0.7 0.6 0.3 1.2 0.5 0.7 0.5 0.3 1.6 0.5 0.8 1.1 0.6 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 Brazil Ukraine China USA India Top Importers of HS 31 category from Russia (Billion USD) 2017 2016 2015
  • 23. www.dragonsourcing.com  Export of fertilizers from Russia is growing: In January 2018 it was about 200,3 millions USD which is 30,3% higher in comparison to the same amount in 2017.  The key, importing partners of Russia in terms of fertilizers market in 2018 are: China, Ukraine, Estonia, Latvia, Brazil, Poland. 63% of all chemical products exported from Russia have final destination in the above countries.  Russia has positioned itself as a large and reliable exporter of MAP/DAP, NPK, ammonia, urea, AN and potash (MOP). The Country is self-sufficient for all its requirements of nitrogen products. Russia is also the world's second largest ammonia and potash exporter. About to 85% of potash production is exported. The country is endowed with significant reserves of natural gas, phosphate and potash, providing the impetus for major capacity developments in all segments over the next decade.  There are several, global producers and key exporters of fertilizers, located in western part of Russia, mainly in Moscow and Moskovskaya oblast: Acron, Phosagro, Uralchem etc. Fertilizers (HS 31)(2/2) © 2018 Dragon Sourcing. All rights reserved. 23 Major, production zone of fertilizers in Russia Source: Delonovosti.ru, Seanews.ru, Fertilizer.org, Ontheworldmap.com, DS agent research, Google Maps
  • 24. www.dragonsourcing.com Top Exported Products in this Category  Unwrought aluminium  Aluminium wire  Plates, sheets and strip, of aluminium  Bars, rods and profiles, of aluminium  Aluminium foil Aluminum (HS 76)(1/2) © 2018 Dragon Sourcing. All rights reserved. 24 Source: International Trade Centre 12.8 9.3 6.6 5.6 5.0 60.7 2017 (Global export share in terms of HS 76 category %) China Germany United States of America Canada Netherlands Rest of the world 6.7 6.0 7.1 6.3 7.1 5.4 5.6 5.8 6.0 6.2 6.4 6.6 6.8 7.0 7.2 7.4 Export of HS 76 category from Russia (Billion USD) 1.8 0.9 0.8 0.5 0.4 1.7 0.7 0.7 0.4 0.3 1.1 1.0 0.8 1.6 0.5 0.0 0.5 1.0 1.5 2.0 USA Turkey Japan Netherlands Republic of Korea Top Importers of HS 76 category from Russia (Billion USD) 2017 2016 2015
  • 25. www.dragonsourcing.com  Export of aluminum from Russia in January-June 2018 accounted for 2,8 billions USD which is 32,1% higher in comparison to the same period in 2017.  According to the latest report, formed in 2017, USA was the key importer of Russian aluminum with 27% from total export. Second and third, key aluminum importers were Turkey (13,8%) and Japan (12,3%).  UC Rusal is the biggest aluminum producer of the Russian Federation.  Because of the political situation in the world, in 2018 and sanctions, applied from the side of USA government in terms of Rusal company and it’s owner Oleg Deripaska the total aluminum export of Russia might decrease on 5-10% in 2018. However, as per forecasts of industry experts, the negative influence of sanctions can be overcome in 2019 because of increasing demand of aluminum from the side of China and local, Russian market.  The nine primary aluminum smelting plants are owned by producer - Rusal. With low energy cost in Russia, these plants are very efficient The Rusal is the key and biggest exporter of aluminum from Russia. Aluminum (HS 76)(2/2) © 2018 Dragon Sourcing. All rights reserved. 25 Rusal’s production zones all over Russia. Source: Tass.ru, Rns.online, Moneymakerfactory.ru, Alcircle.com, Rt.com, Aluminium.ca, Google Maps Murmansk St.Petersburg Volgograd
  • 26. www.dragonsourcing.com Top Exported Products in this Category  Copper, refined, and copper alloys  Copper wire  Copper mattes; cement copper  Powders and flakes, of copper  Bars, rods and profiles, of copper Copper (HS 74)(1/2) © 2018 Dragon Sourcing. All rights reserved. 26 Source: International Trade Centre 12.1 8.4 5.1 4.9 4.4 65.1 2017 (Global export share in terms of HS 74 category %) Chile Germany Japan United States of America China Rest of the world 4.7 3.3 4.5 4.9 5.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 2017 2016 2015 2014 2013 Export of HS 74 category from Russia (Billion USD) 1.8 0.7 0.5 0.5 0.3 1.1 0.5 0.5 0.00001 0.2 2.4 0.2 0.02 0.1 0.1 0.0 0.5 1.0 1.5 2.0 2.5 Netherlands Kuwait Greece China Switzerland Top Importers of HS 74 category from Russia (Billion USD) 2017 2016 2015
  • 27. www.dragonsourcing.com  According to the latest customs data of Russia (for the first quarter of 2018), export of copper category products accounted for 1,97 billions USD which is 52,5% higher in comparison to the same period in 2017.  According to the latest report, formed in 2017, the key countries-importers of copper category products from Russia were: Netherlands (40,8% of total, Russian export), Kuwait (13,4% of total, Russian export), Greece and China (10,2% for China and 9,5% for Greece of total, Russian export).  Russia's copper reserves are mainly located in Siberia (70 percent) and the Urals (20 percent). A large percentage of Russian reserves are in the remote northern and eastern regions, away from major populations and infrastructure.  Russia's copper deposits are various in size and composed of a variety of mineral types. The copper deposits in the country include ultramafic/mafic intrusion-hosted, VMS, SEDEX, stratabound sedimentary rock-hosted, porphyry and skarn.The well-known and large-sized copper deposits in Russia include: the Udokan, Talnakh, Podolsk.  The Key, exporters are: Norilskiy Nikel, Russkaya Mednaya Compania, Uralskiy GMK. Copper (HS 74)(2/2) © 2018 Dragon Sourcing. All rights reserved. 27 Main, copper, mining zones in Russia Source: Moneymakerfactory.ru, Ruscable.ru, Nasdaq.com, Worldatlas.com, Google Maps Udokan Talnakh Podolsk City’s location on the map
  • 28. www.dragonsourcing.com Top Exported Products in this Category  Telephone sets  Radar apparatus, radio navigational aid apparatus and radio remote control apparatus  Monitors and projectors, not incorporating television reception apparatus; reception apparatus  Insulated "incl. enamelled or anodised" wire, cable "incl. coaxial cable" and other insulated  Electrical machines and apparatus, having individual functions Electrical machinery, equipment (HS 85)(1/2) © 2018 Dragon Sourcing. All rights reserved. 28 Source: International Trade Centre 23.3 11.0 6.8 6.45.8 46.7 2017 (Global export share in terms of HS 85 category %) China China, Hong Kong United States of America Republic of Korea Germany Rest of the world 4.3 4.0 3.5 4.9 5.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 2017 2016 2015 2014 2013 Export of HS 85 category from Russia (Billion USD) 0.7 0.7 0.6 0.3 0.2 0.6 0.6 0.2 0.3 0.2 0.5 0.6 0.06 0.4 0.2 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 Belarus Kazakhstan China India Ukraine Top Importers of HS 85 category from Russia (Billion USD) 2017 2016 2015
  • 29. www.dragonsourcing.com  According to the latest customs data of Russia (for the first quarter of 2018), export of electrical machinery category products accounted for 2,52 billions USD which is close to the amount exported in first quarter of 2017.  Belarus (16%) and Kazakhstan (14%) are the key importers of electrical machinery category products in Q1 2018.  The main production area of electrical machinery and equipment is located in Western part of Russia, in Moscow and Moskovskaya oblast.  The key producing companies of electrical machinery and equipment are: Cheaz, Ekra, Ekoresurs. Electrical machinery, equipment (HS 85)(2/2) © 2018 Dragon Sourcing. All rights reserved. 29 Major production zone of Russia Source: El-info.ru, Promdevelop.ru, Ru-stat.com, Worldstopexports.com Ontheworldmap.com, Google Maps
  • 30. www.dragonsourcing.com TRADE AGREEMENTS © 2018 Dragon Sourcing. All rights reserved. 30
  • 31. www.dragonsourcing.com Russia – Trade Agreements © 2018 Dragon Sourcing. All rights reserved. 31 Agreements Region/ Countries Involved Europe, USA, Canada Currently, nine countries (Russia, Belarus, Ukraine, Moldova, Tajikistan, Armenia, Kazakhstan, Kyrgyzstan, and Uzbekistan) from the Commonwealth of Independent States (CIS) ratified a Free Trade Agreement (FTA), which provides the free movement of goods within the territory of the member states. Also Russia has agreement about partnership and trading with EU members. Plus Russia has USSR, trade agreement with USA and trade and commercial relationships agreement with Canada. Russia is a member of agreement about free trade zone creation plus contract about Eurasian Economic Community. Other Trade Agreements Asia Russia has active trading agreement between USSR and Japan. Source: Export.gov, Wto.ru Russia has 7 agreements at the moment: