Turbulent times lead to attractive assets

goetzpartners on localization in Russia and investments in Germany

goetzpartners regularly supports bilateral relationships between Russian and German-speaking leaders and companies. In this context ways of localization and related investment opportunities were discussed at the Wirtschaftsclub Russland (WCR e.V.) meeting held in Moscow on 21st of April. Emil Zakirov, Associate at goetzpartners, presented a background on the economy, a definition of localization and related M&A and joint ventures roadmaps as well as investment conditions of the Russian special economic zones to CEOs and general directors of both Russian and German companies.

“More than 70 international guests participated at the community event of the WCR e.V. and goetzpartners Russia on the issue of localization in Moscow – a great meeting in turbulent times, competent information and with many new personal contacts between businessmen from Germany and Russia. We are very inspired by our experts from goetzpartners and pass by recommending the company to our business friends“, says Dr. Karin von Bismarck, Board Chairman of the WCR e.V.

Russia and Germany in general hold strong economic relations. The trade with Germany ranks 3rd after Netherlands and China. Direct investments of Russian companies in Germany have increased fivefold - from EUR 567m Euro to EUR 2.9 bn. - in the last decade. Another interesting fact - out of all Russian investments in Germany 25% are settled in Bavaria. On the other hand, more than 10,000 German companies invested in Russia in the last decade (Source: Russian Federal Customs Service, MARKUS database).

“The event demonstrates that despite the turbulent situation in Russia, investors from Germany are watching the Russian market even more precisely because of currently favorable Russian assets. The participation in the conference definitely strengthens the position of goetzpartners at the Russian market and has increased our brand awareness among European businesses represented in Russia”, says Emil Zakirov, Associate at goetzpartners.

The Russian economy is facing growing challenges due to political imbalances and sanctions. The decline in oil prices has a negative impact on the economy and budget. The national currency is under growing pressure: since beginning of 2014 ruble has lost over 50% of its value against the US dollar. The capital markets are almost closed for ruble and any foreign currency financing. Imports from EU and other countries contract.

Despite current market volatility and uncertainty, Russia, still being the biggest consumer market in Europe, can offer good entry and opportunities of assets acquisition with significant discounts. For strong foreign - and German particularly - investors the localization in Russia as an establishment of a local production facility is a chance to increase their market share and further consolidate their position in Russia.

About Wirtschaftsclub Russland
Wirtschaftsclub Russland (WCR e.V.) is a business club with the aim to improve communications and provide a platform for meetings for German business leaders based in Russia. goetzpartners joined the club in the beginning of 2015. For more information click HERE