Russia - Italy: light optimism

"Since the summer of last year, there has been a revival of Italian business interest in Russia. But there is not enough information", - concluded Sergio Forelli, partner of the Pavia e Ansaldo law firm, where the 6th Russian-Italian seminar "Russia-Italy: the art of innovation" was held in Milan.

Conceived by Antonio Fallico, Chairman of the Directors Board of Banca Intesa, which annually hosts the Forum in Verona and numerous seminars throughout Italy (for example, on February15 in Milan and February 16 in Genoa) and Switzerland, these meetings are a valuable source of information and a platform for the exchange of politicians and businessmen experiences.

Evgeny Utkin (left) and Antonio Fallico (right), photo © Evgeny Utkin

The Russian CG in Milan, Alexander Nurizadeh, stressed that after the fall of the trade turnover between the two countries last year, a positive trend was emerging, both in numbers and in interest, and Italy is now Russia's fifth business partner.

Antonio Fallico said that "Italian export in 2017 increased by 19.3% compared to the previous year and reached almost 8 billion euros." Of course, this is far from the record in 2013, when it exceeded the current figures by more than 2.7 billion euros.

But as Marinella Loddo, the director of the ITA (Italian Trade Agency), noted, you need to work in realities that are quite complex, and Italy's success is especially noticeable when compared with other countries. As export to Russia grew, Italy took an honorable third place, behind South Korea and Kazakhstan, but ahead of the US and European countries.

Marinella Loddo (left) and Konstantin Simonov (right), photo © Evgeny Utkin

Igor Karavaev, Russia's trade representative in Italy, also stressed that "we really overcame that negative trend, which was accompanied by a 40% drop in recent years, and now we are experiencing a light optimism", the trade turnover between the two countries grew significantly last year and reached $ 24 billion.

If in recent years, Russia has been close to Italy on the Doing Business index, in the latest release, Russia has pulled ahead and now occupies the 38th place.

A lot of time was traditionally devoted to energy. Sergei Komlev (Gazprom Export) said that the share of Russian gas in Europe is growing, including Italy. Export statistics do not always accurately reflect the growth of this role, since the gas that Gazprom sells on marketplaces in Europe eventually comes to Italy. The share of Russian gas is steadily exceeding one third of Italy's import needs for natural gas.

Participants in the seminar "Russia - Italy: the art of innovation", photo © Evgeny Utkin

In addition, Komlev stressed: "It is not true that renewable energy sources are cheaper than gas." He noted that in countries where renewable energy is developed, electricity prices are higher than in other countries. In Italy, for example, prices are among the highest, it is in the fourth most expensive European countries for electricity. Italy is the second country in Europe, after the Czech Republic, on grants for MW / h (almost 180 euros), and the second country, after Germany, on absolute figures of subsidies.

Prospects of Natural Gas in Italy, sources IHS and Enerdata, IEA

Komlev also noted upon the reliability of Russian gas supplies to Europe, citing the example of a sad explosion at the Austrian gas distribution station in Baumgarten on December 12, 2017, when Russian gas supplies to Italy were stopped for the day. Therefore, he stressed the need for other ways of supplying Russian gas, such as "Nord Stream 2" and "Turkish Stream". Continuing the conversation, General Director of the Energy Security Fund Konstantin Simonov said that Italy is the most diversified country in terms of gas supplies in Europe.

Igor Karavaev (left) and Alexey Pilko (right), photo © Evgeny Utkin

But as soon as the tragedy occurred in Baumbarten, the prices in the market soared 4-fold, Italy stated about possible problems if the accident is not corrected within a week. In Italy, gas terminals have been built to receive LNG, but they are almost unloaded, because it is almost impossible to find ships with a good price for LNG for Europe.

Some countries are trying to prevent the construction of new gas pipelines from Russia, but without them, as without Russian gas - it is impossible to do. He also cited one historical fact: this year marks the 50th anniversary of the supply of Russian (then USSR) gas to Europe. The first country was Austria, but as Simonov stressed, there could be Italy, but it was pressured by American partners, and Italy withdrew.

TAG pipeline, source SNAM

Alberto Ribolla, vice president of Siirtec Nigi, spoke about his experience in Russia, in particular, with Gazprom. And although the company has no direct damage due to sanctions, but the sanctioning climate clearly does not contribute to business development, loans. But Europe can not do without Russia, although some countries try to oust it.

Alberto Ribolla, vice president of Siirtec Nigi, photo WEB

Chairman of the Directors Board and CEO of Coeclerici Logistica Andrea Clavarino told about his work experience in Russia (they bought a coal mine in Kemerovo). Aimone di Savoia-Aosta, CEO of Pirelli Tyre Russia, spoke about the company's successes in the Russian market, where the company has two plants - in Kirov and Voronezh. On the Russian market there is a revival of car sales, and as a result - car tires, including premium class, such as Pirelli.

Aimone di Savoia-Aosta, General Director of Pirelli Tyre Russia, photo © Evgeny Utkin

We talked about the development of health and pharmaceuticals. Valery Vaysberg, the Director of the Analytical Department of CG Region, spoke about the Russian pharmaceutical market. For example, Russia spends 3.8% of GDP on health care, while Italy - 6.7%. The per capita expenditure on health in Russia is 438 euros. The average price of a medicine in Russia is 6.7 euros, on average in Russia, on medicines spend 80 euros per year, while in St. Petersburg 140, and in Moscow - 180 euros.

Elena Popova, Director of Regulatory Affairs and Health Policy of the Association of International Pharmaceutical Manufacturers (AIPM), spoke about AIPM. It was established in 1994 and unites more than 60 major manufacturers. Popova also talked about the tasks of the Pharma2020 program - the development of Russian pharmaceuticals and  international investment in the Russian Federation pharmaceutical industry.

Helthcare spending in Russia, source Goverment of Russia, CB of Russia

And Maria Pravettoni described how love for Russia and the Russian language led her to the Russian market. She is the export director of Betafarma. However, Russia has taken a course to produce its own medicines and replace them with imported ones.

Well, perhaps most importantly said Antonio Fallico. For several years, Russia has been trying to avoid purely commodity export. And according to the latest data, which led Falliko, the share of non-primary exports is now 50.2%. So, imperceptibly, Russia crossed this line. And the relationship with Italy will remain friendly, the sanctions will not be canceled in the near future, regardless of any alignment of the elections - both in Italy and in Russia they will be held in March.

Evgeny Utkin, Milan, Italy

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