Mir Stekla and the Problems of the Russian Economy

Date: 26 June 2014
Source: www.vitrum-milano.it
Russia tops off the chronic difficulties of a market that (always) calls for experience and special skills with its most recent geo-political complications.

Mir Stekla however, showed that our sector, particularly where the big manufacturers - and the big-ticket jobs - are concerned, is keeping production capacity at significant levels.  

It began at the end of April when the US agency, Standard & Poor’s, cut its rating (for the record: the absolute credit reliability rating was dropped from BBB to BBB-) saying it was due to the geopolitical tensions in Ukraine and the resulting initial flood of capital out of the country. But today it is the objective performance of economic flow that places Russia in difficulty. The outflow of capital seems to be following its course and the forecasts for growth for this year have been heavily downsized. In just a few months it quickly shifted from the official Ministry of the Economy estimate of +2.5% to a skimpy +0.5%, communicated at the beginning of June by Finance Minister Anton Siluanov -- a drastic slowdown, even compared to the +1.3% of 2013.

All the top international pundits agree in attributing this worrisome data to geopolitical uncertainty, which, if it has not even minimally tarnished the prestige of Putin at home (strengthened perhaps by the nationalism so widespread in Russia), it can severely limit the possibility of growth in investments.

But if the ones to suffer up front were undoubtedly the ruble, the Moscow Exchange, Russian businesses and families, Europe is also paying the price, after years during which the Russian market has allowed Western European companies to effectively soften the drop in consumption and the recession in its domestic markets. 

After the closing of Mir Stekla, which took place in Moscow from June 3rd to 6th, we asked Davide Schiavon, Sales Manager for Italcarrelli, Gimav member and world leader in machinery for stocking and handling special merchandise, including flat glass, to give us his point of view on the outlook for our industry: “The Russian market is complicated on its own; it requires a lot of experience and the ability to move in the right directions.

This year at Mir Stekla we found nothing more nor less than we expected. We were pleased to welcome customers with whom we have some very big projects in the works, even though no significant new orders came in. But it is true that we make custom products; we carry out special projects for big customers, multinationals that typically do not have credit problems and are less sensitive to short term fluctuations in the market. The smaller processors, the artisans and the small businesses, are much more exposed to sudden winds. Anyway, in Ukraine the local projects have been cancelled or put on hold. Generally speaking, there are real problems in the Russian market, but I can say that in Europe we have been through much worse”.

600450 Mir Stekla and the Problems of the Russian Economy glassonweb.com
Date: 26 June 2014
Source: www.vitrum-milano.it

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