1 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx Anatoly Chubais, Chief Executive Officer March 29,2012 / Stanford Faculty Club Russian innovative economy: is it real?
Jul 15, 2015
1 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Anatoly Chubais, Chief Executive Officer March 29,2012 / Stanford Faculty Club
Russian innovative economy: is it real?
2 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Current macroeconomic situation in Russia
3 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
16%
11%
6%
8%
40%
19%
After a sharp drop in 2009, Russian GDP has recovered and is now expected to continue growing
977942
905870
944
826764 444444
5
98
6
2015
1,102 1,059
2013
1,016
2011 2009
-8
2007
897
2005
GDP development and structure
Source: Federal State Statistics Service, OECD, EIU, IMF, Roland Berger Strategy Consultants
Services
Retail
Production
Natural resources
Construction
Other
GDP STRUCTURE, RUSSIA, 2010 [%] GDP DEVELOPMENT [USD bn]
Real GDP in 2005 prices [USD bn] Real GDP growth
4 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Russian GDP (PPP): 6th in the world
Source: IMF
GDP (PPP), USD trillion
15,07
11,32
4,47 4,40
3,09 2,38 2,31 2,25 2,22 1,83
0
4
8
12
16
USA China India Japan Germany Russia Brazil UK France Italy
5 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
40%
19%
Economic indicators: facts and forecasts
Source: Federal State Statistics Service, Ministry of Finance of the Russian Federation, Bank of Russia
INFLATION [%] FINANCE AND DEBT
International reserves (as of 16.03.2012): $505.4 bn
National Wealth Fund and Reserve Fund,
aggregate amount (as of 01.03.2012): $152.2 bn
Gross government debt ,
% of GDP (2012, forecast): 14.1%
20,1
6 5
10
15
20
25
6 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
0
10
20
30
40
50
60
70
80
’09 ’08 ’07 ’06 ’05
+19%
p.a
’13F ’12F ’11F ’10
Foreign direct investment
24%
8%
6%
20%
13%
9%
8%
8%
3%
1% 100%
Manufacturing
Retail
Science
Natural resources
Real estate
Telecommunications
Others
Power, gas, oil
Financial sector
Construction
Source: Roland Berger Strategy Consultants
Foreign direct investment in Russia
STRUCTURE OF FDI, 2010 [%] FOREIGN DIRECT INVESTMENT IN RUSSIA [USD bn]
Foreign direct investment was growing strongly prior to the crisis – Expected to regain former level by 2013
7 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Overall effect from accession of Russia to WTO is mostly positive for innovative industries
Source: CASE Research
WTO membership will aid Russia in its ambitious plan to innovate and modernize the economy, since:
imported inputs, particularly equipment, will become cheaper as a result of tariff reductions after
accession
the WTO «seal of approval» will render Russia more attractive for foreign direct investments
An additional effect for innovative industries: production growth rate by 6-7.5% per year
8 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Russia’s modernisation: main policy challenge
”In our work to make our economy radically more
effective we also need to put in place incentives
and conditions for progress in a whole number of
different directions [...] This calls for large-scale
modernisation of production facilities in all
economic sectors”
Vladimir Putin, Feb 8, 2008: Dmitry Medvedev, Nov 12, 2009:
“In the twenty-first century, our country once
again needs to undergo comprehensive
modernisation. […] I see this as a question of our
country’s survival in the modern world”
9 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
RUSNANO: goals and outlook
10 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Russian nanotech industry 2010-2015: late start, but huge potential
Ivory Tower
Minor League
Dominant
Niche
USA
Japan
Germany
S.Korea
Israel
Singapore
U.K.
Italy
Russia
Technology Development Strenght
Nan
otec
h A
ctiv
ity
Goal for Russia: move into the “major league” by 2015
Source: Lux Research, RUSNANO
11 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
RUSNANO: brief overview
Established in 2007 as a state corporation
Transformed into a joint-stock company in 2011
Resources:
Russian Federation’s asset contributions in RUSNANO: $ 4.1 bn
State guaranteed debt financing (bonds issuance): $ 5.7 bn
12 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
RUSNANO: brief overview
Tasks:
- commercialization of nanotech industry projects
- sales of Russian nano-enabled products by 2015 –
~ $ 30 bn per year
Terms of Financing:
- financing projects at early stage and stage of expansion
- ownership participation — no more than 50% - 1 share
Fund for Infrastructure and Educational Programs
Non-commercial organization
RUSNANO Joint-stock company
co-investment in nanotechnology industrial projects
and investment funds
investment in non-financial innovative infrastructure
and educational programs
13 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
RUSNANO’s key results: Funding Overall amount of project funding (progressive total), 2008 – 2011, $ billion
2008 2009 2010 2011
0,007
1,1
2,2
3,42
0,0003
0,6
1,4
3,4
RUSNANO Coinvestors
14 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
RUSNANO’s key results: Production
Novosibirsk
Aramil (Sverdlovsk region) Kazan
Novomoskovsk Izhevsk
Nizhni Novgorod
Moscow + Moscow region Karachev
2011: 13 new factories in 10 Russian regions
St.Petersburg
15 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
RUSNANO’s key plans: Production
Novosibirsk
Aramil (Sverdlovsk region) Kazan
Novomoskovsk Izhevsk
Nizhni Novgorod
Moscow + Moscow region Karachev
2012: 16 new factories in 9 Russian regions
St.Petersburg
Kaluga
Vladimir
Usolie-Sibirskoe (Irkutsk region) Nevinnomyssk (Stavropol region)
Novocheboksarsk
(Chuvashia region)
Valuyki (Belgorod region)
16 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
The most attractive market segments: Examples Pharmaceuticals and biotechnology
Energy efficiency
Electronics, photonics and optics
Construction materials
17 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Pharmaceuticals and biotechnology
18 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Estimated minimum size of the pharma and biotech sector in 2015 is USD 4,5 bn – 78% growth in vaccines is possible
Source: Roland Berger Strategy Consultants
Overview of pharma and biotech sub-sectors
+47%
2015 2011
3,00
14,001)
0,20
+78%
2015 2011
2,001)
0,601,00
+14%
2015 2011
Market attractiveness
MARKET 2011-2015
[USD bn]
KEY TRENDS
ATTRACTIVE-NESS
(BIO)PHARMACEUTICALS
(excl. vaccines) VACCINES MEDICAL SERVICES
> Strong medical need, especially in cardiovascular and oncology treatments
> Government aims to localize manufacturing due to currently high share of imported drugs (77%)
> Growth of vaccines market depends mainly on government plans for including new vaccines in National Immunization Calendar
> Unclear how many and what type of vaccines will be included
> Demand for IVD services is mainly driven by the commercial sector
> Significant R&D base, experienced scientific teams
> Clinical trials in Russia are high quality and less expensive and quicker than in the EU/US
3,00 min
max
0,50 min
max
> Upside potential > Strong CAGR > Government support
> Upside potential > Strong CAGR > Government support
> Moderate potential > Demand from
commercial segment
1) window of opportunity (potential)
19 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
RUSNANO has numerous ongoing projects in booming sectors – Successful localization projects are also underway
Source: Roland Berger Strategy Consultants
PHARMACEUTICALS SinBio BioBetter class of pharmaceuticals
Biodegradable nanocomposite materials
VACCINES NT Pharma Flu nanovaccines Technology based on pseudo-adenoviral nanofractions and special nanostructures
Investment projects in the sector – examples
COMPANY PRODUCT TECHNOLOGY
FINANCING:
>RUSNANO share of committed capital as per January 2012 – USD 1,1 bn >Private investors (in cooperation with RUSNANO) as per January 2012 – USD 1,6 bn
-
DIAGNOSTICS PET-Technology National chain of PET
diagnostic centers in Russia
Nuclear medicine, new diagnostic methods DIAGNOSTICS
PET-Technology National chain of PET diagnostic centers in Russia
Nuclear medicine, new diagnostic methods
TECHNOLOGY
TRANSFER
Domain Associates
Therapeutic products for the treatment of viral infections, cardiovascular diseases, cancer
GMP-standard manufacturing
TECHNOLOGY
TRANSFER
Celtic Pharma Innovative medications in hematology, endocrinology, cardiology, oncology
GMP-standard manufacturing
20 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Energy efficiency
21 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Power generation and energy accumulation will drive the sector up to USD 8 bn in 2015
Source: Roland Berger Strategy Consultants
Overview of energy efficiency sub-sectors
+31%
2015
2,90
2011
0,97
2015
3,16
2015
1,11
2011
0,46
+25% +7%
2015
1,07
2011
0,83
Market attractiveness
MARKET 2011-2015 [USD bn]
KEY TRENDS
ATTRACTIVE-NESS
ENERGY
ACCUMULATION
POWER GENERATION
ENERGY HARVESTING
AND CONVERSION
ENERGY DISTRIBUTION
> Opening up of the electric vehicles market
> Growth in demand for accumulators for power distribution companies
> USC technology power stations will be built in Russia from 2015
> Technology will account for more than 30% of total power capacity installed
> Growth driven by overall growth of advertising and construction markets
> Growth rate of non-residential property market 2011-2015 is 18.6%
> Growth driven by import substitution for power transformers and high level of overall investment in energy
> Industry leaders plan to localize transformer production in Russia
> High potential > Strong CAGR > Government support
> Upside potential > Huge future market
share
> Moderate potential > Strong CAGR > Government support
> Stable potential > Moderate CAGR
22 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
RUSNANO is already co-investor in a number of successful projects in the sector, Liotech and Nesscap already started production
Source: Roland Berger Strategy Consultants
SUPERCAPACITORS Nesscap Energy Inc
High-capacity energy accumulators
Carbon microwave steam activation of nanopore electrode structures
ACCUMULATORS Liotech Accumulators for electric vehicles and energy sector
High capacity lithium-ion batteries
Investment projects in the sector – examples
COMPANY PRODUCT TECHNOLOGY
FINANCING:
>RUSNANO share of committed capital as per January 2012– USD 0,9 bn >Private investors (in cooperation with RUSNANO) as per January 2012 – USD 1,28 bn
TRANSDUCERS Profotech Fiber optic metering
systems for power grids Nanostructured fiber-based optic current and voltage measurement and monitoring sensors
PHOTOVOLTAICS Hevel Solar modules Thin film technology
23 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Electronics, photonics and optics
24 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
The electronics and photonics sector is highly attractive for investors – Estimated market potential of USD 5,7 bn in 2015
Source: Roland Berger Strategy Consultants
Overview of electronics and photonics markets
3,07
+61%
2015 2011
0,46 0,75
+18%
2015 2011
0,38 1,85
+98%
2015 2011
0,12
Market attractiveness
MARKET 2011-2015 [USD bn]
KEY TRENDS
ATTRACTIVE-NESS
INTEGRATED CIRCUITS
AND CHIPS OPTOELECTRONICS TELECOMMUNICATIONS
> Many areas of application, including transportation, pharmaceuticals, logistics, etc.
> Massive government support via ERA GLONASS project and implementation of RFID in all pharma products, transportation and postal systems
> Market is driven by LED, which will mainly be used for lighting systems
> Government support via the restriction of incandescent light bulbs and changes in construction rules involving the use of LED in new buildings
> Massive market growth mainly due to transition of mobile operators to 4G networks by applying LTE base stations
> Growth in fiber channel market is moderate and driven by the increasing number of broadband service users
> High potential > Strong CAGR > Government support
> Moderate potential > Moderate CAGR
> Stable potential > Moderate CAGR
25 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
RUSNANO has a track record of successful investments in the sector, IRE-Polus and Optogan are currently market leaders
Source: Roland Berger Strategy Consultants
OPTOELECTRONICS Optogan Light emission diodes High-brightness light-emitting diodes for a large variety of applications
PHOTONICS NTO IRE-Polus
Fiber lasers and telecommunications equipment in Russia
Fiber lasers
ELECTRONICS Crocus Tech-nology SA
Magnetoresistive
memory
Innovative memory production technology
Investment projects in the sector – examples
COMPANY PRODUCT TECHNOLOGY
FINANCING:
>RUSNANO share of committed capital as per January 2012– USD 1,1 bn >Private investors (in cooperation with RUSNANO) as per January 2012 – USD 1,98 bn
26 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Construction materials
27 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
Total market volume of the sub-sectors with the biggest commercial potential is ~USD 14,6 bn, more than half of it - polymers and additives
Source: Roland Berger Strategy Consultants
Overview of construction materials sub-sectors
+86%
2015
1,20
2011
0,10
+15%
2015
8,87
2011
5,11
+11%
2015
0,21
2011
0,14
Market attractiveness
MARKET 2011-2015 [USD bn]
KEY TRENDS
ATTRACTIVE-NESS
LOW EMISSIVITY
GLASS
THERMAL
INSULATION
POLYMERS AND ADDITIVES
WATER TREATMENT MEMBRANES
> Tighter regulations on thermal resistance of windows for new buildings from 2016
> Share of low emissivity glass expected to grow
> Overall construction growth and changes in energy effic'y regulations for new buildings are driving market growth
> Great need for insulation for refurbishing existing residential stock
> Growth driven by overall construction growth
> Good prospects for increased application of new materials (composites, nano-additives, etc.)
> Demand for water treatment membranes mostly determined by governmental spending
> Strong need for refurbishing existing infrastructure
> Strong CAGR > Massive market
potential
> Large market volume > Stable market growth
> Mostly government financing
> Moderate growth potential
+16%
2015
4,30
2011
2,40
> Large market volume > Stable market growth > Increased application
of new materials
28 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
There are potentially interesting projects on the market – RUSNANO has invested in some of them, which are now successfully operating
Source: Roland Berger Strategy Consultants
Investment projects in the sector – examples
COMPANY PRODUCT TECHNOLOGY
ADDITIVES Unicom Additives for bituminous concrete and asphalt
Devulcanized rubber nanoparticles for bituminous concrete and asphalt additives production
COMPOSITES Galen Composite reinforcement and fittings
Reinforcement of polymer with basalt fibers
LOW EMISSIVITY GLASS
STiS Low emissivity glass Glass magnetron spattering in metal-oxide nanofilm vacuum
FINANCING:
>RUSNANO share of committed capital as per January 2012– USD 0,46 bn >Private investors (in cooperation with RUSNANO) as per January 2012 – USD 1,0 bn
29 Rusnano_Investment_Attractiveness_Short_ENG_F_AN.pptx
КОНЦОВКА!!!
Source: Roland Berger Strategy Consultants
Russian innovative economy: it is real!
On your way to a great deal