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Fine bread and butter but a stodgy filling

Russia’s largest and smallest companies are vastly outstripping in growth the relics of the Soviet system that languish in the middle but employ most of the working population.

Gref:  wants "fewer words and more
action" to achieve Asian-tiger style growth
of 7% to 8% a year from 2007

THE OLIGARCHS GRABBED Russia's industrial jewels in the mid-1990s and almost made billions overnight by exporting natural resources. But following two years of strong growth they are starting to lose out to a new breed of mini-garchs who are running small regional companies that cater to consumers and provide the sorts of goods and services that the Soviet production machine simply ignored.


An example is Kalina, which started life as a typical Soviet operation nestled away in the Urals mountains. It is now an up-and-coming cosmetics firm. Set up during World War II as the Jewel of  the Urals - the name of its main factory - to produce soap for soldiers, it was reorganized in the 1960s to produce perfumes and cosmetics.

Kalina became famous in Soviet times for its Troinoi brand of eau de cologne - a favourite tipple for desperate alcoholics during Mikhail Gorbachev's anti-drinking drive in the 1980s. But over the past four years the company has grown fast, from a small regional player into a serious domestic competitor to multinationals such as Procter & Gamble and Unilever.


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