Finnish companies more interested in investing in Russia

Biggest problems in Russian trade: customs, bureaucracy, and unstable legislation

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According to a recent barometer published by the Finnish-Russian Chamber of Commerce (FRCC), Finnish companies are more interested in investing in their own production facilities in Russia than previously. Of the 300 companies who participated in the survey, 51 % have invested in a subsidiary or a production facility in Russia within the past six months. In last autumn’s barometer the comparable figure was below 40 %.
     
The strongest belief in Russian trade and its positive development was expressed by companies in the retail and wholesale trade. Managing Director Waldemar Tuutti of Tradeka International points out that it is less risky to invest for instance in Saint Petersburg than in a poor location in Finland, because there are over seven million consumers in the region.
      Furthermore, Finland has a logistic advantage compared with other West European countries: the distance between Helsinki and Saint Petersburg is just 400 kilometres, and there is only one foreign border to be crossed.
     
According to FRCC’s barometer, Finnish companies operating in industy and services are not quite so enthusiastic. However, Harald Finne, President of UPM’s Wood Products Division, comments that UPM has had a birch plywood and veneer mill in the city of Chudovo in Novgorod for a long time, and the project has been successful. One third of the production is used in Russia.
     
The survey also shows that the traditional problems in Russian trade still exist: customs procedures, bureaucracy, and instability of legislation.
      Consequently, large-scale investments have still to wait for the time being, although Russia provides UPM with good opportunities for wood processing and developing their industry, concludes Finne.


Links:
  The Finnish-Russian Chamber of Commerce
  UPM Press Release: A day of celebration for UPM's Pestovo sawmill in Russia.

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