Russia's largest companies transform themselves as they grasp expansion opportunities, according to Economist Intelligence Unit report

뉴스 제공

2007-09-11 08:53

Hong Kong--(뉴스와이어)--The biggest Russian companies·like Gazprom, Rosneft, and Lukoil·feature regularly in the world media and their actions are watched closely by both business and political leaders around the globe. Recent years have seen these firms embark on an aggressive expansion binge, but behind the scenes they have also been active in trying to transform themselves from former state-held behemoths or cobbled-together holdings into more effective, efficient, and profitable companies. Corporate transformation in Russia's emerging multinationals, a report from the Economist Intelligence Unit and sponsored by Ernst & Young, explains what these companies are doing and why.

"Many of Russia's fastest-growing firms are beginning to bump up against capital constraints, meaning they need to tap global financial markets to continue growing. This means they are under heavy pressure from the investor community to become more transparent and tighten up management practices," says Matthew Shinkman, the editor of the report. However, as Russia's leading corporates expand into new markets, they are increasingly competing head-on against global leaders, providing another source of pressure to improve their competitiveness.

"Recent changes in corporate governance are being driven to a large extent by capital market requirements. Thus far in 2007 there have been 18 public offerings by CIS companies for a total of almost $26 billion raised," says Karl Johansson, Managing Partner of Ernst & Young in Russia and the CIS. “The process of Russian companies going public in international markets will continue and will help these companies become global players”.

A closer look at the internal reform efforts of Russia's emerging multinationals reveals several key themes:

· Reform is indeed happening, if at a slow and uneven pace: the biggest Russian firms, with the most contact with the outside world, have been very active in corporate restructuring, implementing modern, best practice corporate governance systems, upgrading internal processes and procedures, and building environmental sustainability into their businesses. Firms that are closer to the state, not surprisingly, tend to move more slowly in this regard.

· Change is being driven in part by funding requirements: In order to minimise their cost of capital on global markets, the Russian multinationals are being forced to introduce more transparency, improve reporting procedures, and get corporate governance right. Acquisitions and establishment of operations in western markets have also forced these companies to play by western business rules.

· Reforms are not purely being forced upon the Russian multinationals: senior executives with whom we spoke for this report confirmed that corporate transformation efforts are not being made just as pre-IPO window dressing. In most cases executives understand that the long-term competitiveness of their firms will depend upon meeting or beating global best practices in operations, governance, and finance.

· Image is still a problem: many senior executives around the world are still either wary of or at least uninformed about the actions of Russia’s biggest firms. These companies have a big image problem to solve, and it’s not just a case of prejudice: Russian executives need to become more open to communicating with the business world.

· There’s still a long way to go: Impressive progress has been made, but the emerging Russian multinationals are still emerging. Substantial room for improvement still exists, which presents an opportunity for these firms to continue their vault into the upper echelons of the global business world, if they choose to take it.

Corporate transformation in Russia’s emerging multinationals is available free of charge at:www.eiu.com/transformation

About the Economist Intelligence Unit

The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper.

The Economist Intelligence Unit provides geopolitical, economic and business analysis on more than 200 countries, as well as strategic intelligence on key industries and management practices. With over 300 full-time professionals in 40 offices around the world, supported by a global network of more than 700 contributing analysts, the Economist Intelligence Unit is widely known for its unparalleled coverage of major and emerging markets. More information about the Economist Intelligence Unit can be found at www.eiu.com.

웹사이트: http://www.eiu.com