Meeting with Italian business leaders

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Vladimir Putin and Prime Minister of Italy Giuseppe Conte held a meeting with heads of leading Italian companies.

In addition, Vladimir Putin and Giuseppe Conte took part via videoconference in the opening of a high-voltage motor plant in Chelyabinsk.

The new plant to produce AC motors and generators is located at the Stankomash Industrial Park in Chelyabinsk and will ensure complete domestic production in Russia, hence making it independent from foreign suppliers.

Production capacity is projected at up to 300 items per year. These motors are used primarily in pumping units for main oil pipelines.

Meeting with Italian business leaders

President of Russia Vladimir Putin: Mr Prime Minister, colleagues, friends,

First of all, I would like to welcome all Italian entrepreneurs present here, our friends and colleagues, our partners.

Your companies work successfully with your Russian partners, invest in Russia and implement large joint projects in various areas, from energy, transport and food processing to high technology, sports and entertainment.

I am confident that you will not stop here, that you plan to expand your presence in the Russian market. The large package of commercial contracts prepared for signing during the Italian Prime Minister’s visit also indicates this.

Let me stress that Italy is an important economic partner for Russia, so naturally, today, trade and investment cooperation was the key topic of our talks with Prime Minister Conte.

Last year bilateral trade grew by 21 percent, to $24 billion; in January–August 2018, it grew by another 15 percent. We hope that this positive dynamic will continue and we will return to the numbers we had in previous years.

As a reminder, in 2013, trade between Russia and Italy was 53.8 percent (over twice as much as today). The impressive technological, resource and human potential of our countries makes this a realistic goal.

We see good prospects in the investment area. Italy’s direct investment in Russia is about $5 billion. There are about 500 Italian companies in the Russian market.

Many of them have located production in Russia and aim to increase industrial cooperation and create industrial alliances; the “Made with Italy” brand is becoming more popular in Russia.

The new plant in Chelyabinsk can serve as an example of successful and mutually beneficial cooperation. This innovative full-cycle enterprise was built with Italian technologies and will produce high-voltage power supply units that meet advanced energy efficiency and safety standards.

This project was the result of the close partnership between Russian companies Transneft and Konar, and the Italian company Nidec, a world leader in industrial power systems.

The motors are to be used primarily in oil and hydrocarbon shipping. They are very popular in the Russian fuel and energy sector, and of course will be in high demand in third country markets.

Other key areas of the Russian economy, especially shipbuilding, will also use the plant’s products. In the future, the motors will be installed in Arctic vessels on the Northern Sea Route and also used for natural gas liquefaction in such projects as the Arctic LNG 2, Baltic LNG and Vladivostok LNG plants, as well as in the metals and mining spheres, railway transport and wind turbines.

I would like to note that the new enterprise became the fifth to be created in collaboration with Italy at the Stankomash Industrial Park in Chelyabinsk. In fact, the Italian side helped us create a whole industrial cluster that encompasses important high-tech enterprises.

Both of us are well aware that in the course of this work, our Italian partners received big orders and are now carrying them out profitably and successfully, and for our Italian friends, too. It is hardly the only successful example of our bilateral business cooperation.

Our countries have been productively cooperating in power engineering for many years as well. In 1969, Italy became one of the first European countries to sign a long-term gas supply agreement with the Soviet Union.

Today, Italy is the second largest western European consumer of Russian gas after Germany. Russia values its reputation as a reliable, proven partner and will continue supplying the Italian economy and the rest of Europe with energy.

Our bilateral cooperation in the energy sector does not end with fuel supplies. Together with the Italian company ENI, Russian oil and gas companies Rosneft, Novatek and Lukoil are developing hydrocarbon deposits.

The company Maire Tecnimont is participating in the construction of the Amur Gas Processing Plant, the second largest in the world. This plant will become the largest Russian gas processing plant, and one of the key industrial infrastructure facilities for the Power of Siberia pipeline, which will be used for transporting gas to China.

We welcome Italian businesses’ desire to invest in the development of electrical power engineering in Russia, namely ENEL’s participation in modernising the country’s generating capacity – the construction of wind farms in Murmansk and Rostov regions.

Colleagues,

Here in Russia, we strive to create the most comfortable environment for attracting foreign, including Italian, investment and technologies. We are simplifying the administrative regulation system, creating a sophisticated infrastructure, and offering investors significant preferences in a number of Russian regions.

The Russian Direct Investment Fund is making major efforts to attract foreign capital. Today the RDIF will sign an agreement with several Italian partners.

We are also considering a serious undertaking to set up a Russian-Italian investment platform. Actually, we reached an agreement on this several years ago, but then it was put on hold.

Today, while speaking with Mr Prime Minister, we decided it was appropriate to resume this work, even if at a slower pace; the main thing is to begin. I am convinced that when this organisation appears, it will be much easier for Italian companies to establish themselves in the Russian market.

I would also like to draw your attention to the positive trends in key macroeconomic indicators that we can see in Russia. Industrial production is developing; growth was 3 percent in the first nine months, mainly due to the processing industries where growth is 3.3 percent.

At the end of the first six months, fixed capital investment in businesses and organisations grew by 3.2 percent. We understand that this is a reserve for the short term.

Economic activity indices are increasing. Freight turnover has grown by 3 percent and retail trade by 2.7 percent in the eight months of this year.

I would like to mention low inflation – 3.4 percent at an annual rate, unemployment at 4.6 percent, a stable financial sector and an increase in gold and foreign currency reserves by 5.7 percent to $459 billion since the beginning of the year. The Russian Government’s reserve funds are also growing.

This positive macroeconomic background allows companies to work steadily and make long-term plans. I expect Italian business circles to continue taking advantage of the opportunities opening up in the Russian market.

I would like to mention that we have minimal external debt, about 15 percent, and considerable growth in the trade balance. All this creates favourable conditions for joint work. We count very much on your active cooperation with your Russian partners.

Let me turn the floor over to Mr Conte.

Please, Mr Prime Minister.

Prime Minister of Italy Giuseppe Conte (retranslated): Mr President,

Russia is an essential economic partner for Italy. We have traditionally strong ties in energy.

It is very important that our indexes have once again shown a positive dynamic, both last year and in the first months of 2018. We can look to the future with optimism.

We have our mutual investment in various sectors and, despite the crisis of the past years, this has not decreased.

We are facing important challenges today. We want to strengthen Italy’s economic indexes and to use this market’s opportunities.

We are working to use new opportunities, we are working in the areas of high technology and healthcare, which were not as popular in the past as such traditional sectors as energy and all the areas related to furniture, clothes and food.

Large and small Italian businesses are looking for partners in not only Moscow and St Petersburg, but also all across Russia. The videoconference we have just seen proves that. We can see that our partnership is succeeding in Chelyabinsk and other Russian regions.

The Government (I can assure you) is ready to support Italian companies that want to promote industrial cooperation with Russian companies and want to establish new joint enterprises, create new investment and transfer technology. We are ready to participate in new development projects.

We understand that Russia can find excellent partners in Italian businesses that traditionally provide ready products. We can strengthen industrial relations; this is our duty, considering the complimentary character of the Russian and Italian economies.

The presidents and general directors of the major Italian companies here represent the main areas of our cooperation. They will present the development projects they have implemented in Russia. Today they represent a wider range of businesses.

Mr President, let me note that the businesses that are present here have always believed in this market and, in many cases, started their operations in Russia dozens of years ago. They opened the way for the entire Italian production system.

In the most politically and economically challenging times they have never thought about leaving Russia. And I, as the head of the Italian Government, wanted to acknowledge this in front of Russia’s main authority.

Thank you.

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