Industry Trend Analysis - Multinationals To Increasingly Localise Production - AUG 2014

BMI View : Localisation of production in Russia will continue. The Russian state will continue to offer incentives to push companies towards direct investment, while also gradually withdrawing market access for imported products. The strategic goal of import substitution is being accelerated by pressure at the highest levels of government, as Russia seeks to reduce its reliance on Western countries for essential goods and move away from a purely hydrocarbon-driven economy.

Russia's policy towards multinational pharmaceutical companies is mixed. We see explicit support from state officials for domestic companies and protectionist measures, but at the same time, official sanctioning of incentives and invitations towards attracting foreign direct investment in Russia. The industry as a whole has broadly accepted the incentives/punishment offered from the state (cheap loans and assistance in establishing green field sites), seeing Russia as a market that is poised to grow at a fast rate over the next decade.

Localisation Of Production Continues

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