For some investors there is life after crisis

	These Renault Megane are assembled in Moscow. Picture by Alexander Shalgin (NG-Photo)

According to annual forecast of the Russian statistical agency the situation wouldn't be rosy: the total volume of direct foreign investments will not exceed $2,2 billion against $3,5 billion last year.

Investment projects continue to lay on the shelves. True, some, namely "paper", reanimation is seen in the car manufacturing sector: in Moscow (together with Renault) and in Leningrad region (together with Ford).

So, the plant in this region with investments of $150 million will annually produce up to 100,000 cars Ford Focus. However, similar production in Nizhny Novgorod (together with FIAT) and Izhevsk (together with Skoda) is firmly frozen.

The situation is better in the most dynamic sector of the economy - light and food industry where the terms of investment return are much more shorter.

The most popular in Russia mark of beer Baltiya is made thank to investments of the Baltic Beverages Group in Scandinavia. Money investments in the development of the plant from 1993 till 1998 amounted to 222 million dollars. This company owns two beverage plants: in St. Petersburg and in Rostov-on-Don.

The beer concern Holstein is also ready to put in the market its production made in Baltica. The company Nestle has brought the control packet of shares of the plant "Russia" (Samara) with 22,6 percent of the total domestic output of chocolate wares in order to invest in the production only in the last year 30 million dollars.

Last month in St Petersburg was open the chewing-gum factory "Wrigley". Slightly earlier in Nizhny Novgorod the Dutch concern Dandy put into operation a similar factory.

Nevertheless, also in Nizhny Novgorod the Italian pastry-cook concern Ferrero refused to build the plant worth of 100 million dollars.

The British company Del Monte with the fourth rating on the juice market in Moscow has broken off all its projects in Russia. However, now such negative factors are by far numerous than examples inspiring optimism.

Many Russian senior bureaucrats point on this occasion that therefore foreigners try to get new privileges and free duties from the Russian authority. In reality, since August 1998 a plenty of serious companies had lost for many years confidence in the country and its political and economic stability.

In spite of last year crisis other sectors where foreign investments are going up include tobacco industry. The position of the company Japan Tobacco which has recently brought tobacco business of the American holding RJR Nabisco - concern RJ.

Reynolds International is seen as courageous but at the same time as quite pragmatic.

The total volume of investments put now by Japan Tobacco International in the Russian tobacco business since 1992 exceeded $500 million which is the record volume of Japanese investments in Russia (moreover, those are direct investments in the manufacturing sector). It brought a positive result: whereas in 1992 in Russia the company produced only 12 billion cigarettes last year, in spite of the crisis in the country, the company manufactured already 41 billion cigarettes taking up around 20 percent of the market.

Today by the production and purchase volumes Japan Tobacco International figures is the leader on the Russian tobacco market. The most well-known plant of the company which got the major part of investments - the largest and the most advanced tobacco factory JTI in Europe - the Petersburg factory "P.J.P.-Petro (the former Uritsky factory). This plant produces cigarettes "Peter 1", "St. Petersburg", "Knyaz", "Magna", "Monte-Carlo", "North Star" and also the traditional Russian "Belomor".

One year ago president of Japan Tobacco International charged with CIS and Baltic countries, Nick Ringer, answering questions of journalists why the company did not curtail its business in Russia said: "The emerged situation became a kind of test on the endurance for all. However, in every crisis there is a positive aspect. The companies having been able to overcome the first crisis shock got a priceless experience of working under quite difficult conditions".

And today the company successfully promotes new domestic high-class cigarettes "Russian Style". In the words of company employees, the idea of creation of the "Russian Style" was born after the successful launch in 1995 of cigarettes "Peter I" - the first Russian cigarettes brought into line with international standards for product quality.

Now "Peter I" is already the leader on the Russian market of domestic cigarettes. The company"s example prompted plenty other foreign companies operating in Russia to initiate the production of Russian cigarette brands. Meanwhile the company itself was going further, namely towards the production of domestic Russian cigarettes of premium class which earlier were only imported from abroad.

Now, as part of the Japanese tobacco empire, R. J. Reynolds got new financial opportunities and the most advanced management. Last year with a staff of employees only two times higher than in the company R.J.R. the corporation Japan Tobacco had ten times as many sales. If until the purchase of R.J.R. the Japanese corporation was fourth in the world tobacco market, now it is second.