Credit Manager Magazine 2/2021

51 CREDIT MANAGER MAGAZINE Luty / february 2021 Ksenia Timofeeva A credit insurance broker and Busi- ness development director of ICBA Russia (Malakut Trade Credit). Kase- nia started her career in credit insurer at Atradius. For the last 8 years she is working for trade credit insurance broker in Moscow, Russia. BUSINESS year. In the corporate sector as a whole the loss of unprofitable enterprises increased by 3 times to 55 billion EUR, and the profit of profitable enterprises decreased by 12% to 147 billion EUR. However, five industries showed positive dynamics for this indicator: agriculture, construction, water supply and waste disposal, postal and courier services, information and communication. Volume of industrial production decreased by 2.9% in 9 months of 2020 compared to the same period of 2019. The automotive sector declined strongly: -19.8% of vehicles’ production and -5.7% of production of other vehicles. Russia saw new car sales decrease by 9.1% in 2020 on the pre- vious year, as the industry was battered by the coronavirus pandemic, the Association of European Businesses (AEB) said. While the top two leading manufacturers on the market, Avtovaz — a member of the Renault-Nissan alliance — and Kia, saw their sales decrease, third-place Hyundai’s grew. The AEB said it expects a 2.1% rebound in sales in 2021 if there are no new Western sanctions against Russia and government subsidies for the automobile industry remain in place. The decline of oil, gas and other minerals production caused by slowing down of glob- al business. It was also affected by the col- lapse in oil prices due to the cancellation of the OPEC+ deal in March 2020. The price of Urals crude oil fell from $ 65 per barrel at the beginning of 2020 to less than $ 20 per barrel by the middle of the II quarter, and recovered to around $ 56 per barrel by the end of Jan- uary 2021. Pharmaceuticals market has been relatively stable during the pandemic despite the ruble downturn. Pandemic led to a sharp increase of medical products domestic production (+24.2%). The Russian pharmaceutical mar- ket is mostly focused on imports. According to 9 months 2020 figures exports of medical products increased by 20.1% compared to the same period of 2019. Volume of Russian medical products exports remains insignif- icant, but some countries have expressed interest to the Russian vaccine against COVID-19 and voiced their intention to pur- chase it. The following countries have already approved the Sputnik V vaccine: Belarus, Argentina, Guinea (experimental use), Bo- livia, Algeria, Palestine, Venezuela, Paraguay, Turkmenistan, Hungary, UAE, Serbia (data as of 27.01.2021). It is clear that, going forward, Russia needs to position itself within the context of the changes in global value chains that were al- ready under way and were accelerated by the COVID-19 pandemic, like mega-trends to- wards automation, digitalization and obsta- cles to free trade. On the positive side, Russia is one of the least-indebted countries in the world, with world’s fourth highest foreign re- serves, and 30% of global natural resources possession. It is fiscal prudence and sound management in the face of sanctions and Covid-19 that will see how quickly Russia can rebound. There is still too much uncer- tainty to say. 1 Excluding small businesses, credit organizations, state/municipal institutions, non-credit financial organizations. Source: Federal customs service of Russia Top-5 drops and increases of Index of production by main type industries January-September 2020 compared to January-September 2019, % manufacture of medicines and materials applied in medical purposes 24,2% manufacture of textiles 10,2% manufacture of machinery and equipment, not included in other groups 7,0% manufacture of chemicals and chemical products 6,1% manufacture of fabricated metal products, except machinery and equipment 5,7% coal mining -6,5% extraction of crude petroleum and natural gas -7,4% manufacture of leather and leather goods -13,7% other mining and quarrying -19,6% manufacture of motor vehicles, trailers and semi-trailers -19,8% “We expect that due to a gradual recovery of business activity in the global market and the softening of OPEC+ deal terms, export volumes will grow in both volumes and dollars.”