Top 10 ideas for investment in Russia in 2022

Previously, we wrote about why investing in Russia in 2022 is a good idea. Today, we will talk about specific niches in industry where there are good opportunities for industrial development. As we said, Russia has a large market and there is lower competition right now, cheap raw materials, large electricity capacity, there are very large-scale government incentives for investment, and there are many sites that have already been built and have the infrastructure.

The RAUIE Analytical Department believes that the following sectors currently have very high potential for investment in Russia:

1. Viscose production. Russia currently has no in-house production of viscose, approximately 90% of the fibre is imported from China and the remaining 10% from India. At the same time there are cheap raw materials in Russia: Russia is the world's main producer of forest and pulp products and is well supplied with raw materials, which allows the production of cellulose with high production costs. Also, Russia has softer environmental standards: it is easier to do chemical production, which has high emissions.
2. Production of PET pellets. The Russian market is very large, and PET pellets are in a high demand for the production of PET bottles for water, soft drinks and beer. Now the Russian capacity does not cover the demand of the main Russian enterprises, so setting up production of PET pellets in Russia could be a good idea, especially since Russia is the main oil producer in the world, and therefore there is always enough cheap raw material for PET pellets that will ensure profitable production.
3. Tyre production. Russia has always used tyres produced by Western brands, which have left the Russian market. Tyre consumption in Russia is 40.7 million pieces per year, with annual imports alone exceeding $300 million. Setting up tyre production, especially for special equipment tyres, could be a good investment idea.
4. The production of aluminium cans. Russians like drinking mineral water, lemonades and beer from aluminium cans, but there is insufficient production of aluminium cans from aluminium tape in Russia. Previously, these products were imported. Besides, Russia is a major producer of aluminium and therefore an investor can always buy enough raw materials to produce the finished product and will have no problems with sales.
5. Chemical fibre production. In addition to viscose fibre, there is also a high demand for other types of fibre in Russia: copper ammonia, acetate, triacetate, polyamide, polyester, etc. The Russian chemical industry produces many basic materials that can then be used in the production of chemical fibres, which are in demand by Russian industry.
6. Textile production. Fabrics and clothing are a basic need for people, and 70-80% of clothing in Russia is imported from other countries. Since the import restrictions in Russia, the demand for locally produced clothing and fabrics has increased, and therefore the establishment of new textile production facilities is a good investment idea.
7. Food chemical production. Russia consumes 50 thousand tons of citric acid per year for food purposes, and taking into account the needs for the oil and gas industry, demand grows to 100-150 thousand tons. In addition to citric acid, other chemicals are in high demand: sodium citrate, taurine, ascorbic acid, etc.
8. Creating a data centre. In Russia, electricity is cheap, so it is very profitable to set up data centres. They can also house cryptocurrency mining machines, which is also a good investment idea.
9. Production of technical gases. Russia has a well-developed metallurgical and chemical industries that consume large quantities of technical gases: hydrogen, helium, propane, butane, acetylene, nitrogen, argon. Besides, the same oxygen for medical purposes in Russia is also imported predominantly, which means that there is a market. Production of technical gases is energy intensive, and in Russia with large volumes of cheap electricity this is an important advantage, their cost of production will be lower and more profitable.
10. Aluminium production. In China, aluminium is produced with harmful coal-fired electricity, whereas in Russia there is less harmful and cheaper electricity produced with gas, nuclear or water power. Cheaper energy makes it possible to produce aluminium more cheaply. Now the cost of aluminium production in China is around $2,700 per tonne, while in Russia it's under $2,000. That's a big difference! 

By the way, in the Saratov region (Volga region), there is a unique production site with 40 thousand square metres of production and storage facilities, 260 ha of industrial land, which is supplied with 180 MW of electricity and 29 km of railway tracks on the territory of the plant. The capacity of the water supply and drainage system, with its own water intake and discharge channel system, is 5 million cubic metres of water. This is a very attractive offer for an industrial site in Russia!

All in all, there are plenty of ideas for investment in Russia in 2022. RAUIE has been helping Chinese investors develop projects in Russia since 2010: choosing a site for investment, registering a company in Russia, getting government support, setting up sales and marketing. You can apply for a consultation on investment projects in Russia via the feedback form on the website or by e-mail office@raspp.ru and our specialists from the Investment Projects Department will help you.