Engineering and metalworking industry in Russia primarily consists of steel, aluminium and nickel production, as well as construction, machinery and equipment. Once the world leader in the production of steel, Russia is recovering from Soviet Union split in 1980s, that proved Soviet-made products uncompetitive and producers lacking capacity to keep up with the rivalry coming from abroad. Even though less than half of manufacturers use outdated equipment, steel production still remains a key industry sector that contributes to the larger part of exports from Russia and is the second biggest economy driver after oil, fuel and gas production.
The use of old facilities, where once there was a place for military-goods production, has advantages for more advanced metal structure production that requires traditional production methods such as sand cast.
Electronics, IT and telecommunication industry players in Russia are mainly focused on the market of military technologies and, as such, they are directly connected with financing of defence orders and government programs. However number of private manufacturers of passive components and discrete semi-conductor components are specialized in the automotive market. A number of players with civil-market orientation is also increasing.
Currently, an interest of foreign manufacturers to Russia is as high as it has never been before. Russia is among countries with the most dynamic economy and a high estimation of development potential. Russia is one of the few rapidly emerging centres of excellence that offer capacity for outsourcing of advanced IT software development.
Food industry is amongst the most attractive industries for foreign investors in Russia. Even though the average annual growth (5-6 %) is less than it could be expected within the rapidly growing economy, it promises a secure steady long term escalation. One of the causes of it was that production has been heavily impacted by new tariffs and cheaper imports, leading to a drop in production of goods such as sugar (31,8 % drop) and bread (4,5 % drop). This resulted in decrease of local production and exported food stuffs. For the moment, Russian food exports are still concentrated around the CIS countries, but in the longer run there will be more of emphasis on exports to Western Europe. Invariably this trend is likely to increase the quality of food exports as Western European standards are relatively high.
Currently, the local consumption is rapidly increasing for products such as alcoholic beverages (12 %), sparkling wine (38 %), brandy (58 %), mayonnaise (21 %), vegetable oil (33 %) and luxury goods.
Pharmaceuticals market in Russia is growing rapidly throughout the recent years. Once being an industry holding 272 brand names of various medications (1992), production of pharmaceuticals has slowed down due to Soviet-style management practices that are to some extent remaining. Moreover, the industry still suffers from political interference that caused the locals resigning from research and development and made it more attractive for foreign direct investors. With increasing living standards, locals became able to afford new advanced medications making a shift from being a production industry to consumer market. Thus, Russia offers true opportunities both for selling and testing pharmaceuticals.
