Alexander Lukin on the investment appeal of infrastructure projects, speech at the Russian M&A Congress
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 18.11.2010 |
Alexander Lukin, Basic Element's Chief Financial Officer, gave a speech at the Russian M&A Congress in Moscow on November 18, 2010. Here are the main points of the speech:
"The Basic Element Group is currently in a new phase of its development. It has successfully rounded off a complex business restructuring, streamlining manufacturing processes and deleveraging enterprises. The overwhelming majority of those enterprises are now showing operating profit as a result. We expect to return to pre-crisis revenues as early as this year, and we are actively developing existing and planning new investment projects."
"Basic Element is a long-term strategic investor in the Russian economy, with an interest in projects with a long horizon and strategic outlook. Major infrastructure projects in Russia that the Group is already implementing or plans to implement meet these criteria."
"Several foreign investment banks* estimate that Russian infrastructure lags quite a long way behind that of Western European countries, with only rare exceptions. For example the development index for road infrastructure in Germany is 96%, but in Russia it is only 22%; the index for air transport is 98% in Germany, but 34% here; and so on. So the analysts believe Russian infrastructure projects have a lot of potential - they estimate investment in the sector at USD500 billion in next two years."
"We view infrastructure projects as an obvious source of growth for the Russian economy and one of our own priority investment fields."
* Estimate by Bank of America / Merrill Lynch
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