Russian Investments Abroad

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Russian Investments Abroad

• Economic and Financial Forum in Switzerland
• Zurich, March 18, 2007

2
Renova Groups profile

• Renova Group is a strategic investor and
  shareholder in a number of leading Russian and
  international companies of the oil, metallurgical
  and chemical industries, as well as in
  telecommunications, construction and energy
  sectors, e.g. TNK-BP, United Company Russian
  Aluminum, Integrated Energy Systems (IES), OC
  Oerlikon.
• The value of Renova assets under management
  exceeds 11 bln.
• Renova Group is active in 34 Russian Regions as
  well as in more than 10 countries throughout
  the former USSR, Europe and Africa.

OUR PARTNERS
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Russia new outlook for the West

• We have changed!
• Evolution of the Russian legislation, aiming at
  reaching international standards
• Redirection of National Economy from raw
  materials to high-tech
• A new generation of Russian Managers
• Education in international business standards
• GLOBALISATION TRENDS FOR QUALITATIVE
  CHANGES PROMOTION OF ENTERPRENEURSHIP IN RUSSIA
• Commitment to turn Russian companies into
  international players
• Import of high technologies, development of
  industries with higher end product value
• Access to the new markets and expansion within
  the existing ones

• Russia-Europe
• XXI century
• Cooperation?
• Competition?

? ? ?
4
Issues and solutions

• Subjective factor - We are not welcome here.
• Russian capital as well as that of the other BRIC
  countries faces difficulties with international
  expansion
• Forced limitation of Russian presence in the
  international business
• ? Objective factor Difficulties with
  expansion for Russian capital
• Russian capital lacks experience in acquisition
  of considerable assets abroad
• Legal and cultural specifics of MA transactions
• Insufficient experience in state protectionism
• Traditional fear of Russia in the West
• European companies facing problems when entering
  Russian market

Possible solution efficient partnerships
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Efficient partnership experience (1) technologies

• Oerlikon is the recognized international leader
  in semiconductors production, vacuum systems,
  data storage (60 of all CDs and DVDs and 80
  iPod are produced with Oerlikon equipment) and
  innovative space technology.
• Oerlikon is the exclusive supplier of the
  inter-satellite navigation systems and equipment
  for NASA and Arianespace program, an official
  partner of Intel, AMD, Philips, Infineon and
  others

• Starting point
• ? The company is easily adapted to operation
  within different cultures and traditions
• ? Clear business development strategy in Russia
• ? Lack of technologies applied by the company and
  a strong demand for them in Russia
• ? Synergies achieved by Oerlikon entering the
  Russian market
• Entering the business
• 1. No conflict entry Deliberate waiver of a
  minority financial investors position in favor
  of a strategic one
• 2. Participation strategy discussion Agreeing of
  OUR ROAL in implementation of Oerlikon
  initiatives with the other shareholders of the
  company
• 3. Open participation Partnership

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Efficient partnership experience (2) Energy

• Investment in alternative energy in Europe
• Example of a partnership between Russian and
  European companies
• Actively developing sector in both Europe and
  Russia
• Western technology, Russian capital and expertise

Renova Group (Avelar)
Avelar owns 100 in Energetic Source

• Established in 1999
• Large Italian retailer
• Power generation projects

100

• Investment in wind power generation
• Investment in solar power generation
• Investment in biomass power generation

Sales
Power generation
Gas
Energy
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Efficient partnership experience (3) USA, RSA
RENOVA U.S. Holdings Limited Joint Investment
fund with the American partners focused on
alternative renewable energy projects.
United Manganese of Kalahari (UMK) One of
the largest mining projects. Pursuant to the
local laws investment in development of mineral
resources has to be effected in cooperation with
the local partners representing the native
population of the country. In this case our
partnership investment strategy is governed by
both our willingness and the rule of law.
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And finally

• Believe my experience the shortest way to the
  Russian market is to go hand in hand with a good
  and reliable partner. Having entered Russia with
  one transaction you would soon face the same
  result I did in Switzerland upon completion of
  the Oerlikon deal the number of investment
  proposals and ideas received by our Zurich office
  increased dramatically...
• Victor Vekselberg