Financial Times: Telenor and Alfa call time on old grudges

Reuters: Russia car maker Sollers eyes JV with Fiat –sources

MOSCOW, Feb 9 (Reuters) - Sollers (SVAV.MM) may this week create a joint venture with Italy's Fiat (FIA.MI), continuing the trend of Russia's struggling car makers looking abroad for expertise, industry and government sources told Reuters.

The deal may be signed during a visit by Russian Prime Minister Vladimir Putin to the car producing city of Naberezhnye Chelny this week, the two sources said.

Fiat CEO Sergio Marchionne is set to visit the central Russia city at the same time as Putin, the industry source said.

Sollers -- which has worked with Fiat since 2005 and already assembles some of its models -- declined to comment.

European car makers have shown a keen interest in Russia, which had been on track to overtake Germany as Europe's biggest car market before a recession saw sales halve in 2009.

France's Renault (RENA.PA) has a stake in Russia's biggest car maker AvtoVAZ (AVAZ.MM), while Germany's Daimler (DAIGn.DE) holds shares in truck manufacturer Kamaz (KMAZ.MM). Both "couples" have joint ventures in Russia.

In January, Russia's Industry and Trade Minister Viktor Khristenko said that in the nearest future a new alliance with a foreign producer would be signed in the car sector. At the time, industry experts and sources said that a deal between Sollers and Fiat could be a possibility.

(Reporting by Gleb Stolyarov and Gleb Bryanski; Writing by Toni Vorobyova; Editing by Mike Nesbit)

((antonina.vorobyova@reuters.com; Tel: +7495 7751242, Reuters Messaging: antonina.vorobyova.reuters.com@reuters.net)) Keywords: SOLLERS/FIAT

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Reuters: UPDATE 1-Tele2 Q4 in line, adds 1.15 mln users in Russia

* Q4 core profit flat yr/yr, in line with expectations

* Adds 1.15 mln customers in Russia in Q4

* Says to reach 18-19 mln clients in Russia by end 2011

(Adds company comment, detail)

STOCKHOLM, Feb 9 (Reuters) - Telecom operator Tele2 (TEL2b.ST) posted broadly flat core profit for the fourth quarter, as expected, and said on Tuesday it was adding new customers at a fast pace in the key Russia market.

Earnings before interest tax, depreciation and amortisation (EDITDA) were 2.19 billion Swedish crowns ($294 million), almost matching a forecast in a Reuters poll and little changed from 2.16 billion a year earlier. [ID:nLDE6130F3]

Tele2 has shifted its focus from established western European markets to emerging markets in recent years. It has sold operations in Switzerland and France, among others, and focused expansion mainly on Russia.

The company added 1.15 million new customers in Russia for a total of 14.45 million at year-end. It expects to have 18-19 million customers there by the end of 2011.

EBITDA in Russia rose 7.8 percent to 695 million crowns, driven by growth in regions where the company has been operating for some time.

"Tele2 Russia will continue to look for possibilities to carefully expand its operations through new licences as well as complementary acquisitions which fit with its corporate culture," the company said in a statement.

It is also looking at broadening its footprint and late last year bought a majority stake in mobile operator NEO in Kazakhstan.

In Sweden, the companies biggest market by revenue, EBITDA dropped 9.6 percent to 689 million crowns as the group lured higher-end customers with attractive deals. ($1=7.444 Swedish crowns) (Editing by Mike Nesbit)

February 8, 2010

Russia’s Fast Food Market Booms as Fewer Gourmands Are Able to Afford Restaurant Dishes

Claiming that Russia is “an exciting, active market with a vibrant economy,” Burger King’s executive management is quite optimistic about the company’s prospects. “We believe that our brand’s entry into Russia exemplifies our company’s commitment to diversifying our global restaurant portfolio and represents a milestone in our expansion strategy in the region,” said John Chidsey, the chairman and CEO of the Burger King Corporation. “More than 80 percent of our net restaurant growth is realized in international markets, and we are pleased with our new strategic market entry into Russia and its future expansion potential.”

In order to launch operations in Russia, Burger King has established a daughter company called Burger Rus, managed by Alexander Kolobov who has successfully established a well-known chain of coffee shops called Shokoladnitsa. Burger King’s first restaurant is located in the newly-built Metropolis shopping mall in the northwest of Moscow, and there’s another one in the western part of town at the Evropeiskyi shopping center. “The third restaurant will soon be opened in the Mega Teplyi Stan shopping mall,” said Alexandra Blokhina, a spokesperson at the Grayling PR agency which presents Burger King’s. “More restaurants will open in Moscow and other cities when the company has planned their locations and built the right infrastructure within the framework of expanding its business in Russia.” Blokhina added that Burger King will work with local suppliers when it comes to packaging, salads and sauces, and the beef for the burgers will also be produced locally. In the future, the company will expand its cooperation with the local suppliers for economic reasons.   

Analysts believe the company has chosen the right time to enter the Russian market for several reasons. “Considering the recent decline in fast food sales in the United States and the EU countries, it makes sense to focus the attention on new, developing markets, such as Russia, Brazil and South Korea,” said Michael Schaefer, an analyst at Euromonitor International. “Burger King's strategy gives it the chance to establish itself as a global operator, but the company will have to follow through on every key point, such as compelling menu items, attractive outlet design, etc.”

Lower rent prices on commercial real estate during the economic crisis contribute to making the Russian market very attractive. Moreover, the popularity of fast food in Russia has grown dramatically ever since the crisis first hit the country. And Burger King certainly wasn’t the only one to notice. “The financial crisis has had a positive impact on the fast food market segment,” said Valeria Silina, the PR director at Rostiks Group, the second main player in the Russian fast food market after McDonald’s. “Apart from our regular patrons, we are getting many new customers. These people used to eat at casual-dining or fine-dining restaurants, but they were forced to cut their expenses,” she said. About 70,000 people visit Rostiks restaurants daily, most of them teenagers, young people aged 20 to 29 years old and families with children. The average order nowadays comes to 200 rubles ($6.50), a price that hasn’t changed since 2008.

But limited budgets are not the only reason behind the growing popularity of fast food in Russia. “Fast food chains are attractive to clients because they offer good service and a comfortable environment for an affordable price. It is quite difficult to survive in the modern fast-paced world without fast food,” Silina added. Rostiks is planning to open ten new restaurants this year, but the company believes that there are still are many unoccupied niches in Russia’s market. “McDonald’s is Burger King’s main competitor, but not our direct competitor,” Silina said. “Undoubtedly, Burger King will establish a fan base of its own in Russia.”

Presently about a dozen large fast food chains operate in Russia. Euromonitor International estimates that more than two thirds of the market is controlled by McDonald’s, Rostiks and Sbarro. The biggest local fast food brands that offer traditional Russian dishes, such as Teremok Russkie Bliny and Kroshka Kartoshka, have a much smaller share of the market. At least half of Russians aged 16 to 50, both male and female, purchase fast food at least once a week, a poll conducted by the School of Russian and Asian Studies found. Most of these clients consider location (64 percent) and cost (54 percent) as the most important factors, while only 43 percent care for quality and 25 percent – for cleanliness.

Despite the fact that the average lifestyle in big cities forces people to buy fast food on a regular basis, the quality of these meals is still a controversial topic. “[Fast] food is poison. Its nothing but salt, fat and processed grain! It is terrible for you. You Russians have real organic food, developed agriculture, you have something so precious, why are you going to give that up? You have to be rich in America to afford food like that, and no one rich eats at McDonald’s here,” said Pauline, who called in to RT television channel during its report on McDonalds’s 20th anniversary in Russia. But a blogger who goes by the nickname of nBob disagreed: “There are not enough affordable places in Moscow. This is why there are always big queues at fast food restaurants. So any new outlets with good, fast service are welcome.”