Stars of the new Russian consumer economy
The most dynamic of Russia’s companies are relatively small compared with the energy and utility behemoths. Typically manufacturing consumer goods with a rapid payback from investment, they have been able, so far, to grow using their own resources.
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Russia's economy is growing at last on the back of strong international commodity prices. But growth won't be sustained for long unless it is supported by a foundation of real companies producing real goods. Devaluation brought a breath of fresh air to an entire tier of companies suffocating under the weight of an overpriced rouble. Now they are capitalizing on the benign climate to invest, grow, diversify and build up brand images. These are Russia's new breed of star companies that will help make economic growth more robust and longer lasting.
Stephen Jennings, CEO of Russian investment bank Renaissance Capital, identifies three types of companies: privately owned, those in sectors regulated by the government, and state-owned companies. All the star companies are in the first group. While devaluation has allowed these companies to put cash in their pockets, nearly all of them were already well-established and had been investing in their own production well before the crisis hit.