Page 87 - RusRPTJuly18

high-tech start ups to improve and develop its product line, notably improving competitiveness of helicopters and drones," the representative of the company to Vedomosti. Other large investors in Skolkovo Ventures was another aircraft builder United Aviation Building Corporation (UAC) with RUB300mn investment and Russian Venture Company that invested RUB1.5bn. Currently Skolkovo Ventures has over RUB2bn and plans to expand to RUB3bn by the end of June 2018.
9.1.11 Metallurgy & mining sector news
Domestic demand expectations of Russian metals majors are more optimistic than the global consensus , Vedomosti d aily said on June 18 comparing outlook of companies to forecast of Deloitte.
Global steel output grew by 5.3% in 2017 to 1.7bn tonnes, with demand up by 3.6% to 1.66bn, and both are seen moderating to 0.5% and 1.3%, respectively, says Deloitte that believes the global market is stabilising.
In the meantime Russian Severstal expects Russian steel demand to grow by 3-4% in 2018 and accelerate to 8% by 2021 due to expansion of the construction sector. Same expectations are shared by NLMK .
China's environmental drive of cutting steel output by 200mn tonnes annually from 2015 to 2020 has influenced the market. In 2017 150mn tonnes worth of steel capacities were shut down in China, accounting for 8.8% of global supply.
In 2017 Russian steelmakers benefited from rising prices and increased demand, with steel pipe exports from Russia soaring in 2017 by 116% in monetary terms to $2.1bn, according to Deloitte. Last year steelmakers were also supported by large-scale construction projects such as bridge to Crimea, facilities for FIFA 2018 World Cup, and pipeline projects.
However, the actual output of steel and steel products in 2017 in Russia was on the level of 2010, hitting a wall due to lower capital investment, Deloitte argues, noting that steelmakers have no efficient ways of investing growing profits for domestic market. The report urges Russian steelmakers to switch from post-2008 volume recovery strategy to looking for new paths of strategic growth.
Analysts and industry players surveyed by Vedomosti b elieve that such opportunities could list the domestic market. For example, in Russia the share of cottages and high-story building using steel carcasses currently stands at 3% and 13%, compared to 70% and 65% in the US, respectively. Large infrastructure projects, coupled with renovation drive by utilities and transportation players such as Russian Railways could also provide a push.
Representatives of MMK, Severstal, Mechel and Evraz majors confirmed their strategic focus on high-value added products, wider product assortment, integration of digital and IT projects, and improving client service.
RUSSIA Country Report July 2018 www.intellinews.com