BMI's Executive Summary

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The Russian construction industry has been known to outperform the country's economy. The industry is currently going through a high-growth phase, having registered an expansion of more than 15% in 2006. Growing oil and gas output and an expanding retail sector have been major growth drivers. Both domestic and foreign companies have been scaling up operations. This report forecasts the industry to grow at 9.2% on average during 2008-12.

The state's continuous efforts at attracting foreign investment have been successful, as is evident from a large number of overseas players now operating in the country. Sub-segments such as retail and home renovation have benefited from the improving middle-class living standards. Current projects include the construction of a number of oil and gas pipelines, power stations and multiple residential and commercial developments. Some of the major projects planned or currently underway are the US$12-14bn development of the Shtokman deposit; the US$11bn East Siberia-Pacific Ocean oil pipeline and US$10.5bn Nord Stream pipeline.

However, the industry has to cope with a number of impediments. These include remarkably high levels of corruption and bureaucracy and a slow and decrepit judicial system. The industry also faces the risk of increasing state intervention and shortage of building materials such as cement, pre-fabricated ferroconcrete structures, roofing and walls. Furthermore, a shrinking population may lead to slackening of housing demand.

Moscow and St Petersburg have emerged as the construction hubs of the country, resulting in a glaring disparity in infrastructure development between these two cities and the rest of the country. Despite all odds, the high-growth phase is expected to continue and the Russian construction industry is forecast to reach a value of RUB1.74trn (US$62.63bn) in 2012, making up nearly 3% of the year's gross domestic product (GDP).

Contents

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Chapter 1 – Industry Trends And Developments

Market Overview

Russia's Economy In 2006–2007

Russia's Construction Industry In 2006–2007

Major Companies

Some Recent Investment Initiatives

Chapter 2 – Key Projects

Transport

Utilities

Tourism

Residential And Commercial Construction

Table: Russia — Major Infrastructure Projects

Chapter 3 – Business Environment

Introduction

Business Attractiveness Rankings — Methodology

Breakdown Of Ratings

Breakdown Of Components

Regional Overview

Russia: Business Environment Ranking

Politics — Long–Term Risk

Structural Economic Risk

Competitive Environment

Anticipated Sector Growth

Chapter 4 – SWOT Analysis

Russia Infrastructure Industry SWOT

Russia Economic SWOT

Russia Political SWOT

Russia Business Environment SWOT

Chapter 5 – Industry Forecast Scenario

Table: Russia –– Infrastructure Industry Forecast

Risks To Forecast

Chapter 6 – Macroeconomic Outlook

Table: Russia — Economic Activity

Chapter 7 – Competitive Landscape

Chapter 8 – Company Monitor

Sakhalin Energy Investment Company

Skanska East Europe (Moscow)

Altaca

ABB (Russia)

Chapter 9 – BMI Forecast Modelling

How We Generate Our Industry Forecasts

Construction Industry

Sources

Competitive Landscape for Europe Infrastructure Reports: Sample of Companies Ranked

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Comparative company analyses and rankings by sales, % market share, employees, registration date and ownership structure. Company profiles include fully researched senior executives and contact details, business activity and leading products and services. SWOT (strengths, weaknesses, opportunities, threats) of the state’s business environment, infrastructure sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of European Infrastructure Sources

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BMI's European Infrastructure Reports are based on an extensive network of multilateral organisations, government departments, infrastructure industry associations, chambers of commerce and company reports. Information sources include: