Saint-Petersburg State University

Graduate School of Management

International Business Strategies

The Small Group Essay

«How political connections of Russian firms influence their international activities»

Completed by:

Balysheva Olga

Bogdanov Alexander

Brunauer Andreas

St. Petersburg

2013

Table of contents

Intruduction 3

Sibur 4

Eurochem 5

Nizhnekamskneftekhim 6

Uralkaly Group 7

Fosagro 8

Acron 9

OHK Uralchem 10

Henkel 12

Kazyanorgsintez 15

Titan 16

“KuibyshevAzot” OJSC 18

Togliattiazot 19

Nokian Tyres 20

Minudobreniya (Rossosh) 21

Polyplastic Group 22

Michelin 23

Nikos Group 24

Conclusion 25

Intruduction

Chemical and petrochemical industry is a basic branch of industry in the national economy of Russian Federation. It is a major supplier of raw materials, semi-processed materials and various products to all branches of industry, agriculture, service sector, trade, science, culture and education, defence complex. This branch of industry covers about 9% of country's industrial fixed assets; in 1998 it was rated the fifth among other branches of industry by the volume of commercial output. The enterprises of chemical and petrochemical industry provide about 3,5% of tax revenues to the income part of the state budget.

Sibur

State influence:

Shareholders of Sibur are OJSC Gazprombank Group (70% minus 1 share), belonging to Gazprom, and the non-governmental pension fund Gazfond (25% plus a share). The 50% share in Gazprom of the Russian Federation is a valuable sign for government involvement in Sibur.

Internationalization:

Country	Austria
Year of entry	2009
Industry/ business area	Petroleum and petroleum products wholesalers
Entry mode	FDI 100% Brownfield: CITCO Waren-Handelsgesellschaft Volume: 269.9 million US$
Motives	Huge market abroad for the products. Acquisition in order to expand marketing opportunities in Europe. Decision for Austria was merely taken because of the advantages of the company that was acquired. CITCO was a major liquefied petroleum gas trading company with storage facilities in Black and Baltic Sea ports which it uses to receive, hold and unload products.
Firm specific advantages used on the foreign market	SIBUR operates across the entire petrochemical process chain from gas processing, production of monomers, plastics and synthetic rubbers to the processing of plastics. SIBUR is a vertically integrated company with its gas processing facilities providing feedstock for its petrochemical production.
First mover or follower	First mover in Austria
Type of state involvement in the process of internationalization	No indication
Evaluation of the success of the internationalization	Market share in Europe: 67% Successful because acquisition of a well-established company in the same area with a good storage and distribution network.