Most people think ofoil and gas as Russia’s only exports,but the country sells so much more. The city of Moscow is working hard to increase its non-resource and non-energy exports, which were up by almost a third between January and August 2021. Let’s see what local companies are exporting and find out why international buyers should take a closer look at their products.
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In the first eight months of 2021, Moscow’s non-resource non-energy exports were up 32% year-on-year to USD 20.13 billion (from USD 15.25 billion in 2020). More than 85% of that money was spent onindustrial products.
The top three industrial export categories were machinery(USD 1.58 billion), electrical equipment, including telecommunications equipment(USD 1.02 billion), and plastic items (USD 830 million).The Mosprom Center for Export Support helps local companies explore these international markets.
The Center works with Micron, Russia’s largest manufacturer and exporter of microelectronics, which produces4 billion chips and around 500 million RFID tags every year. Over 20% of the company’s revenue comes from exports[EA1] .
Micron’s chips are used in biometric passports, and its RFID tags are used in fan passports. At the 2018World Cup, the company’s products facilitated both visa-free entry to Russia and stadium admission. Approximately 2 million passports were prepared for the event, and FIFA president Gianni Infantinocalled the 2018 world championship the best in history.
Epiel,a Moscow-based manufacturer of expitaxial wafers used for microelectronics, saw its exports up 69% in the first quarter of 2021. Demand forwafers snowballed during last year’s lockdown while factories were closed, but other factors are involved, as well.
“For the most part, the spike in interest is being driven by objective market factors, because the world is increasingly in need of electronics.All kinds of changes – from the widespread introduction of smart devices and the transition to electric transport to increased demand for equipment for remote work andnext-generation networks– create intense demand for the semiconductor components you find in all electronic devices,”said Andrey Babayev, Epiel Commercial Director.
Mosprom helps local companies in other industries, as well, like T8, a manufacturer of telecommunication equipment for optical networks, and door manufacturer Profildoors. With 15 branches around the world, InfoWatch, a Russian company that develops information security products for the corporate sector, has been an international brand for years.
Industry is not the only sector experiencing growth:exports of agro-industrial products were up 7.4% in the first eight months of 2021 to USD 2.36 billion.
Moscow’s four strategic advantages
Logistics. Russia shares borders with 18 countries and has direct access to three oceans, the Pacific, the Atlantic, and the Arctic, giving local exporters access to grow both east and west. Moscow-based companiescurrently export goods to 180 countries.Top importers of the capital’s non-resource and non-energy exports are the United States,Kazakhstan, Belarus, and Germany, which togetheraccount for more than a third of turnover.
Research. According to theUNESCO Science Report: towards 2030, Russia invests almost a quarter of its R&D spending in basic research. Moscow’s universities also train good specialists. For example, Lomonosov Moscow State University is 67thin theQS Rankingfor engineering and technology, and Bauman Moscow State Technical Universityis 174th. When foreign buyers acquire high-tech goods from Moscow, they get the best ratio of price to quality.
“Every year, the local labor market picks up tens of thousands of new, skilled workers with proficiencies across all stages of production: from design and prototyping to deliveries. It is no surprise that Moscow’s non-resource and non-energy exports are up almost 50% from 2019,” said Alexander Prokhorov, headof Moscow’s department of investment and industrial policy.
Resources. Moscow’s manufacturers enjoy unhindered access to the country’s rich resource base. In addition, exporters can confidently meet delivery deadlines because logistics happen domestically and are not affected by pandemic-related customs restrictionsor complexities.
Experts. The Mosprom Center for Export Support helps local companies expand abroad by analyzing target markets, providing custom analysis for effective launch strategies, locating potential partners, organizing talks, and making it easy to participate in business missions and international trade shows. The Center is part of the city’s department for investment and industrial policy and acts as a reliable intermediary for foreign businesses looking to buy from local companies.