SOCAPS CHALLENGE - 23/10/2019

Japan, Russian, Korean and Australian Markets Research

Team 6 – Lin Lu, Raunak Baht, Daniel Castilla Puello, Louis Le Tollec
 JAPAN

Introduction

Japan is an island country in East Asia. Located in the Pacific Ocean, it lies off the
eastern coast of the Asian continent and stretches from the Sea of Okhotsk in the
north to the East China Sea and the Philippine Sea in the south. With the land area of
377.973 Km2. Japan is the world's 4th largest island country and encompasses
about 6,852 islands. The stratovolcanic archipelago has five main
islands: Honshu, Hokkaido, Kyushu, Shikoku and Okinawa which make up about 97%
percent of Japan's land area. The country is divided into 47 prefectures and
unofficially into eight regions, with Hokkaido being the northernmost prefecture
and Okinawa being the southernmost prefecture. Japan is the 2nd most populous
island country. The population of approximately 126 million is the world's eleventh
largest, of which 98.5% are ethnic Japanese. 90.7% of people live in cities, while 9.3%
live in the countryside. About 13.8 million people live in Tokyo, the capital of Japan.
The Greater Tokyo Area is the most populous metropolitan area in the world with
over 38 million people.

Japan benefits from a highly skilled and educated workforce; it has among the
world's largest proportion of citizens holding a tertiary education degree. Japan is a
highly developed country with a very high standard of living and Human
Development Index. Its population enjoys one of the highest life expectancy and the
third lowest infant mortality rate in the world, but is experiencing issues due to an
aging population and low birthrate. Japan is renowned for its striking art, historical
and extensive cinema, influential music industry, manga, anime, video gaming,
rich cuisine and its major contributions to science and modern technology.
The basic environment

Government

Japan is a constitutional monarchy and sovereign state whereby the power of

the Emperor is very limited. As a ceremonial figurehead, he is defined by
the constitution to be "the symbol of the State and of the unity of the people".
Executive power is wielded chiefly by the Prime Minister and his cabinet, while
sovereignty is vested in the Japanese people. The Constitution of Japan is the oldest
unamended constitution in the world. The Prime Minister of Japan is the head of
government and is appointed by the Emperor after being designated by the Diet from
among its members. The Prime Minister is the head of the Cabinet, and appoints and
dismisses the Ministers of State.

Industries in Japan

Manufacturing Industry

Japan has a large and highly advanced manufacturing sector. Manufactured goods
from Japan enjoy a well-earned reputation for high quality, durability and
sophistication. Japanese automotive manufacturers such as Toyota, Honda and
Mitsubishi are among the largest in the world. It is little surprise then that Japan is the
third largest manufacturer of vehicles, producing 9,278,321 in 2015. Shipbuilding,
robotics and electronics are other notable manufacturing industries in Japan.

While manufacturing has declined as a proportion of Japanese GDP over the past
couple of decades, Japan still has a very large manufacturing base. In addition,
Japanese manufacturers have extensive global links, especially in Southeast Asia,
with many having substantial operations in countries like Thailand.
Japan does not rely on low labour costs to remain a competitive location for
manufacturing. Rather, it relies on innovative product design, high quality standards
and a world-class manufacturing workforce to remain competitive.

Agriculture, Farming and Fishing Industry

Agriculture, farming, and fishing form the primary sector of industry of the Japanese
economy together with the Japanese mining industry, but together they account for
only 1.3% of gross national product. Only 20% of Japan's land is suitable
for cultivation, and the agricultural economy is highly subsidized.

The most striking feature of Japanese agriculture is the shortage of farmland. The
49,000 square kilometers (19,000 sq mi) under cultivation constituted just 13.2% of
the total land area in 1988. However, the land is intensively cultivated. Rice
paddies occupy most of the countryside, whether on the alluvial plains, the terraced
slopes, or wetlands and coastal bays. Non-paddy farmland share the terraces and
lower slopes and are planted with wheat and barley in the autumn and with sweet
potatoes, vegetables, and dry rice in the summer. Intercropping is common: such
crops are alternated with beans and peas.

Other Industries

Other significant and major industries in Japan include mining and petroleum
exploration, and vast deposits of rare earth metals have been discovered in the coastal
areas of Japan. Service industry also plays a significant role in the economy and
accounts for approximately three-quarters of the total output in the economy. The
major players in the service industry include real estate, insurance, retailing, banking,
telecommunication and transport, and some of the major players in the industry
include companies such as Mitsubishi Estate, Mitsui Sumitomo, Mizuho, NTT,
Softbank Japan airlines, and Nomura among many others.

Science and Technology

 Japan is a leading nation in scientific research, particularly in fields related to the
natural sciences and engineering. The country ranks second among the most
innovative countries in the Bloomberg Innovation Index. Nearly 700,000 researchers
share a US$130 billion research and development budget. The amount spent
on research and development relative to gross domestic product is the third highest in
the world. The country is a world leader in fundamental scientific research, having
produced twenty-two Nobel laureates in either physics, chemistry or medicine and
three Fields medalists.

Japanese scientists and engineers have contributed to the advancement of agricultural

sciences, electronics, industrial robotics, optics, chemicals, semiconductors, life
sciences and various fields of engineering. Japan leads the world
in robotics production and use, possessing more than 20% (300,000 of 1.3 million) of
the world's industrial robots as of 2013 – though its share was historically even
higher, representing one-half of all industrial robots worldwide in 2000. Japan boasts
the third highest number of scientists, technicians, and engineers per capita in the
world with 83 scientists, technicians and engineers per 10,000 employees.

PESTEL ANALYSIS

Political

Japan is a monarchy. But the current Emperor, Akihito, has little say in the country’s
political developments. He is a figurehead — a symbol — but the country has five
political parties with stronger influence:

• Democratic Party of Japan (DPJ)

• The People’s New Party (PNP)
• Liberal Democratic Party (LDP)
• The Social Democratic Party (SDP)
• The New Clean Government Party (Komeito)
After the Japanese vote for a party, the Prime Minister is elected. Unlike the Emperor,
the Prime Minister has influence over the country, especially regarding political and
economic laws.

Japan is connected with G8 and ASEAN. They have a rocky relationship with Russia,
South Korea, China, and Taiwan. Disputes are related to resources, such as natural gas,
oils, and further marine resources.

Economical

The Japanese economy is strong. In fact, it’s in the top 5 for largest economies in the
world. A strong emphasis is placed on its education system.

Being a contributor to society is a huge part of Japanese culture. It starts at a young age
in school. Students lead discussions, solve student problems, and nominate class
presidents to lead discussions. During this, teachers often stand back and observe,
allowing students to grow and develop their relationships naturally.

This type of management prepares them for the working world. Men are expected to
join a company and stick with it for most, if not all, of their working career. Women
are expected to work until married.

That said, Japan’s unemployment rate is on the rise (5%). This is a low number

compared to other countries but for the Japanese, it’s high and worrisome.

Social

Japanese women are expected to settle down and marry by age 30. While she may have
worked until that point, it’s expected once wed, she leaves the workplace. The couple
is expected to have at least one boy who can ‘inherit’ the family’s worth and/or
possessions. It’s a patriarchal system. However, birth rates have been low between
monogamous couples over the last couple of years.
Regarding religion, Japan is open. Many are Christians, but a few venture into different
religions, like Shinto.

Technological

Japan has one of the most advanced telecommunications systems, particularly with their
mobile devices.

We in the west depend heavily on texting since data is monopolized with restrictions.
Japan is the opposite; they have made it possible to connect to wifi virtually anywhere
in populated areas. So, instead of texting, the Japanese send emails and pass contact
information wirelessly by holding their phones together.

They’ve also developed VoIP growth and other technological advancements. In fact,
many key facilities in Japan, such as hospitals, airports, and restaurants, use automation

systems. They also have stronger robotic development compared to other countries.

Legal

Many laws, such as their Labor and Corporate laws are based on the European system.
You can find employee laws in any employment contract, like working hours, minimum
wage laws, etc.

Environment

A large population of Japan is concentrated in and around Tokyo. This isn’t a choice,
for the most part, because much of the island is overrun by mountain and forest. These
areas are inhabitable and reduce Japan’s developments to smaller, accessible sections
of the country.
Because it’s surrounded by water, the land is susceptible to tsunamis and earthquakes.
With housing and developments packed closely to accommodate the high population,
they’re at risk to colossal damage should a natural disaster hit.

KOREA

Introduction

Korea has developed a unique, centralized form of economic development in accordance with

the country's special circumstances that lack capital power. The export-led economic growth

policy was introduced. As a result, they have become heavily dependent on exports and

imports. Currently, major trading partners are China, the United States, Japan, Taiwan,

Germany, the United Kingdom, Indonesia and Malaysia.

The basic environment of the packaging machinery market

Machinery

By 2019, global demand for packaging machinery is expected to grow by 6.5% annually to

$52.5 billion. Product sales will be driven by market growth in China and other industrialized

countries, and demand for processed food and beverage products and other manufactured
goods is expected to show the strongest growth as personal income and consumer spending

increase. This will result in additional investment in new manufacturing capabilities and

related packaging machinery in the Asia Pacific region, Africa/Middle East, Eastern Europe

and Central and South America. It is estimated that by 2019, only one country in China will

account for a quarter of all new product demand. Large manufacturers in developing countries

will increase the use of packaging materials and adopt new packaging technologies to address

pollution, extend the shelf life of products and make products more aesthetically appealing.

Small companies in these countries are expected to mechanize the packaging process to

increase production and increase efficiency, thereby further increasing the demand for

packaging machinery.

The food and beverage market will remain the main market. The food and beverage market

accounted for 55% of new packaging machinery demand between 2014 and 2019. With the

increase in discretionary incomes in developing regions, households will increase spending on

various processed food and beverage products. To meet growing demand, companies around

the world will build new plants and purchase new packaging machinery. Moreover, due to

changes in consumer preferences, food and beverage companies are expected to introduce a

variety of new products that typically require additional or new packaging equipment.

Overall industry capacity

The packaging industry is associated with the entire manufacturing industry, including food,

electrical and electronics, industrial products and cosmetics. Major industries related to

manufacturing in the packaging industry include food, pharmaceuticals and cosmetics. It is

also a Category 2.5 industry, characterized by manufacturing and service industries, and is a

basic industry used as a consumer of goods produced in all primary and secondary industries.

According to the Korea Packaging Machinery Association, the total number of workers in the

packaging industry is 168,000 (female: 24.1%, foreigners: 9.8%), accounting for 4.4% of all

domestic manufacturing workers, and over 99% of all packaging-related companies are

SMEs. On the other hand, the global packaging machinery industry continues to grow at a

rate of 4.6% per year. In South Korea, the growth rate in 2013 was 10%. However,

subsequent economic conditions, efficiency limits on order production, and declines in

consumer demand often reduce or delay new investments in packaging machinery. South

Korea's market size in 2014 was about 33.4 trillion won, and it is growing rapidly, which is

twice the growth of the global packaging market. The packaging machinery industry is

continuing to grow due to the recent increase in labor costs and the improvement in product

quality through automated production lines. The Korean packaging industry is growing at a

rate of about 6% and is expected to reach about 56 trillion won by 2020. South Korea's

domestic packaging industry accounted for 12.8% of sales, followed by China (37.4%),

Southeast Asia (33.7%) and the United States (23.7%).

PESTEL

Politics: The Korea Pack Exhibition is one of the top 4 exhibitions in Korea, and was

recognized as a representative representing the domestic packaging (packaging) industry

following the machine tool, electronics and medical industries. ) 'Category. 'GLOBAL TOP

Exhibition' is the best trade exhibition in Korea that selects trade exhibitions that can grow to

world-class level among more than 600 exhibitions held in Korea through strict screening.

With this selection, the KOREA PACK exhibition is expected to expand its support for

overseas clients' invitation to overseas exhibitors through the government's support for

overseas promotions, and expects 10 million dollars worth of export consultations during the

event.

Economics: In the Korean domestic market, per capita packaging consumption is only 115

US dollars, only one third of the developed countries. The market size of Korea's domestic

packaging industry in 2020 is rapidly increasing in Southeast Asia and emerging markets in

China and India, and they are growing rapidly in manufacturing. It is estimated to be about 56

trillion won. The main exporters of the Korean domestic packaging industry are China,

Southeast Asia and the United States, which have a high share of the national economy based

on the stable demand of all industries.

Society：There is a new trend in the Korean packaging industry. Currently, the packaging

industry is merging the latest materials and cutting-edge IT technology, and the packaging

industry is moving from simple processing to supporting other industries to further enhance

product value. In addition, new packaging technologies have emerged due to ageing
populations, low birth rates and increased households, and consumer awareness of eco-

friendly societies.

Technology: 'KOREA PACK' has become the largest packaging exhibition held in Korea as

well as in Asia. This exhibition will not only showcase new technologies, but will also be an

important place to show how and how the packaging industry should respond to the big trend

of 'Industrial 4.0', the biggest topic of the manufacturing industry. In particular, each company

manufacturing packaging machines is expected to showcase new products and technologies

through exhibitions to discover new customers at home and abroad and to serve as a platform

for developing new markets.

The packaging machine industry is moving towards automation of the entire system. In the

packaging phase of food, pharmaceutical and cosmetic production facilities, automated

production lines can usually be built without labor. Logistics also tends to use robotic

automatic loading. The system from raw material input to processing, packaging to logistics is

now done through automated packaging machines, and each company saves a lot of money

through this automated packaging system.

Environment: Plastic packaging is lighter than other materials and is resistant to corrosion

and wear, making it more than 30% used throughout the packaging industry. However, with

the recent increase in demand and demand for environmentally friendly packaging, the

packaging industry has begun to change. In particular, antibacterial, high temperature,

ultraviolet light, natural decomposition and recycling have begun to become the axis of the

packaging market.

As the demand for environmentally friendly materials increases, the development of

sustainable functional packaging is also underway. Existing materials, as well as materials

that do not pollute the environment, such as biodegradable plastics, have begun to be

produced in accordance with 3R requirements (eg, recycling, reuse, and reduction).

Laws: In addition to technology, laws and regulations will gradually reduce to support

technology development and improve market conditions. EMC products used in compliance

with GMP regulations are of concern to many pharmaceutical companies. Companies that
specialize in pharmaceutical packaging, combined with the efficiency and accuracy of EMC

technology, increase productivity while meeting market demands.

Consumer demand

The most important keywords in today's packaging industry are quality, hygiene, safety and

the environment. This is true not only in Korea but also in the global packaging industry.

Consumers no longer consider packaging, but in addition to the quality of products such as

designs that require information transfer and purchase in the packaging industry, they also

require quality assurance, hygiene and safety, responsiveness to labor safety, and the use of

environmentally friendly materials. In particular, there is a strong demand for food safety and

hygiene, and it is becoming increasingly important to understand the process and traceability

of raw materials.

The advantage of Korean products is that they are of good quality and therefore have high

customer satisfaction. In addition to good product quality, smooth after-sales service is also

very important. However, due to the high unit price and low price competitiveness, it is a

defect of Korean products. In addition, the country of manufacture of the product is important

for purchase. Since many companies have moved production facilities to China and Southeast

Asia to reduce labor costs, lower commodity costs are satisfactory, but concerns about quality

declines due to overseas production of Korean products.

Market demand 1: growing interest in food safety and health foods

In order to ensure food safety, countries are making every effort to strengthen safety

standards.

- Food-related accidents Food cooking and distribution has increased and become more

widespread due to the increasing consumption and consumption of food and the consumption

of processed foods.

- Countries have mobilized super-hard measures such as strengthening quarantine and

prohibiting imports.
- increased demand for Kosher and Halal certified foods

According to Jewish and Islamic law, Kosher and Halal strictly control livestock slaughter

standards and slaughter requirements, and only certified livestock products produced

according to these standards.

The expansion of the well-being trend has rapidly expanded the demand for healthy foods and

related markets

- The global functional food market is growing at an average annual rate of 15.8%

(2004~2008)

- Global food companies are also committed to developing healthy foods, including

McDonald's, which are fast food, salads and yogurt.

Market demand 2: Acceleration with other industries

Expand the food industry through integration with other industries such as pharmaceuticals

- Food companies are expanding their business through chemicals and pharmaceuticals, and

other industrial companies are entering the food industry.

- Functional foods that act as cosmetics through food intake have also appeared

- Coca-Cola anti-wrinkle drink containing aloe vera jointly developed by Shiseido

Increase the added value of agriculture through the food industry, such as converting

agricultural products into functional foods or health products.

- Foods that maximize pharmacological effects using genetic engineering techniques such as

BT

- Rice that has been fermented by adding strains to rice has a cholesterol-lowering effect and

can be used to treat hyperlipidemia

- Health care products made by processing natural raw materials such as agricultural products

with good pharmacological effects are very popular.

-In 2008, Korea Ginseng Company processed and sold red ginseng with good immune

enhancement in pills, candy, jelly, etc., with sales of 620 billion won.- Health care products

made by processing natural raw materials such as agricultural products with good
pharmacological effects are very popular.

-In 2008, Korea Ginseng Company processed and sold red ginseng with good immune

enhancement in pills, candy

Market demand 3: The processed food market is growing rapidly

The convenience food market is growing rapidly as population structure changes, such as the

increase in the elderly and single families.

- If the first generation of convenience foods is only focused on convenient junk food, the

second generation of convenience foods will evolve into high-end processed foods with

home-made sensitivities.

Food companies are working to develop processing technologies that can be easily restored to

their original state of cooking, such as rapid freezing technology and ultra-high pressure

sterilization technology.

-Purulim (Sun) has developed ultra-low temperature rapid freezing technology to maintain the

taste and texture of food and improve the preservation of exported sushi.

- Products that enhance cooking convenience by filling heating materials are also emerging

Market demand 4: rediscovery of traditional food

The popularity of “ethnic food” reflects the food culture and traditions of each country.

- Ethnic foods are rapidly gaining popularity due to the unique taste of exotic spices and a

unique food culture.

- In the United States, sales of ethnic foods accounted for 11.8% of total food sales.

- In addition to a large number of foreign workers, South Korea has also increased the number

of ethnic foods such as Vietnamese rice noodles, Indian curries, Thai Shenyang and

Hungarian beef stew.

 RUSSIA

Basic informations

Pop in M GDP GDP growth GDP growth in Business

2017 2018 climate
147 11 000 $ 1.5 1,6 B

Markets :

Food production and processing represents a key component of Russia's economy. Over the

past 10 years, the import of food processing and packaging equipment has doubled in Russia

and accounts for 87% of the market. The food and food processing industry accounts for

11.5% of total output sectors in Russia and consists of more than 30 industries and includes

43,000 active organizations. The faster pace of life in Russia in recent years has spurred

demand for products suitable for on-the-go consumption. Easy storage and increased shelf

life of packaged foods make them more attractive to the modern Russian consumer, and

modern retail formats continue to develop.

In 2018, food production in Russia increased by 4.7%, while drink production increased by

3%, according to Infoline, one of the leading research agencies in Russia. This growth was

mainly due to import restrictions stimulating domestic production and competitive prices of

domestic products on local and international markets.

Globally, Russia has the eighth largest market for packaged food products with 27.5 million

tons of trade volume, as well as beverages (alcoholic and soft) with a trade volume of 26

billion liters. The growth of personal income in Russia led to a higher standard of living and

a favorable consumer climate.

Western companies are expecting an upturn and consider this a confirmation of their policy of

maintaining business contacts in difficult years. There is a positive outlook for the plastics

and packaging industries and the food processing industry. Great demand for foreign

technologies in Russia remains, and there is a special need for further optimization of the

production of consumer goods, food and packaging. The volume of imported food processing

and packaging equipment in Russia amounted to about $2 billion in 2018

“Russia and CIS markets are very dynamic with huge potential for further growth, therefore it

is crucial to be physically present in these markets so we can offer better service to our clients

and be ahead competition”, says Comexi new Business Director

Competiting :

In 2017 plastics and rubber machines worth EUR 457 million were exported to Russia from

all over the world; this means 40.4% more than in 2016 (325.5 million).

The Russian food production equipment market is highly competitive and price

sensitive. The following equipment manufacturers are working in the Russian market:

Wynveen International BV, Nivoba BV, Meyn Food Processing Technology BV

(Netherlands), Winkler und Dünnebier Süßwarenmaschinen GmbH, Kraft Foods Deutschland

Services GmbH & Co. KG (Germany), Bühler AG (Switzerland), Ferrero SpA (Italy),

Haarslev Industries A / S (Denmark), Franz Haas Waffelmaschinen GmbH (Austria) and

others. At the moment, German manufacturers continue to lead the list of suppliers of food

and packaging machinery in Russia.

The Russian packaging market consists of the following segments: metal (10%), glass (12%),

soft plastic (21%), hard plastic (21%), paper and cardboard (36%). There are currently more

than 2,000 companies involved in the packaging process in Russia’s six major regions

(Central, Ural, Siberian, North-Western, Volga and Southern federal districts). There are

about 900 companies involved in the production or distribution of packaging machinery.

French and UE positionning :

O,6% of France’s exports

Rank among the customers of Russia : 65th

Due to the embargo settled by Poutine after the ukranian crisis, Russia do not import anymore

from UE. That could be a threat for the markets, but also a future opportunity, if

governements find solutions. The development of domestic production, the expected decline

of Russian population by 2050 and the population explosion in Asia and Africa are the main

factors that should lead to a downward trend in the weight of Russia in agri-food exports.

PESTEL :

1) Politics :

Since Russian Federation’s current president Putin first came to power in 2000, the country’s

politics and policies have seen many changes, and the country has been active on the

international stage. Putin’s Russia’s political actions can sometimes be seen non-logical,

unpredictable, and irrational, and some of the country’s political decisions, domestic affairs,

and foreign policies can be hard for other countries to understand. Russia’s geographical

location, wealth in natural resources, military capability coupled with some geopolitical

tensions with other countries, as well as the fact that the country is Finland’s neighbouring

country and its vital trade partner, make it crucial for foreign companies, - especially Finnish

firms -, to be aware of Russia’s political factors: possible uncertainties and unstableness its

government’s political decisions may pose to the businesses. (Monaghan 2016.)

In addition, corruption is a factor that should be taken into account when doing business in

Russia. According to the Global Competitiveness Report 2014-2015 (Schwab 2014, 320) by

The World Economic Forum, corruption was seen as the most problematic factor for doing

business in Russia. In the 2015- 2016 report, the situation had improved as corruption was

seen as the third most problematic factor (Schwab 2016, 306). However, according to several

sources, bureaucracy and corruption, as well as irregular payments and bribes can be

continued to be seen as high level risks in all levels of government, public, and private sector,

such as for example health care, social welfare, judicial system, law enforcement, commerce,

and education (Schwab 2016; BTI 2016; Radziwill & Vaziakova 2015; Bureau of

Democracy, Human rights, and Labor 2015, 46).

 2) Economics :

Russia is one of the top 15 largest economies in the world by nominal GDP. Its economy

grew by 2.3% in 2018 which was higher than the forecast of IMF’s 1.7% and its own

economy ministry’s forecast of 1.8% (The Japan Times, 2019). A strong growth of 5.3% in

the construction sector has contributed to the overall growth significantly. Russia has more

than $460 billion in reserve and can withstand any global economic shocks (Evans, 2019).

Russian economy is heavily dependent on oil and gas. It produces around 11 million barrels

of oil a day.

In fact, oil and gas make up 59% of Russia’s exports (Evans, 2019). Other top exports of

Russia are as follows: iron and steel, cereals, precious metals, machinery including

computers, wood, fertilizers, and aluminium (Workman, 2019). The country exported

approximately $449.3 billion worth of goods around the world in 2018. The main imports of

Russia are machinery, equipment and transport, chemicals, food and agricultural

products. China and Germany are two of the top import partners of Russia.

As mentioned above, Russia is a key part of the BRICS (Brazil, Russia, India, China and

South Africa) group. It has undertaken a number of initiatives to encourage foreign

investment. Recent infrastructure developments have also immensely improved the logistical

efficiency of doing business in the country.

3) Social :

The minimum wage reach 11,280 p. in January 2019. Although Russian minimum wage

levels in cities such as Moscow and St Petersburg are considerably higher than many other

regions. The minimum wage in St Petersburg stands at 17,000 p. Any employers in St

Petersburg (excluding those financed by the government) must pay the minimum wage unless

they have an agreement with the trade unions. The minimum wage in Moscow is currently

18,781 p. per month, the highest in Russia. According to a report released in December 2018,

the average salary for a skilled worker in Moscow worked out at around 65,000 p. In January

2019, the minimum wage in Moscow is of 18781 RUB, or roughly 270 USD. In 2018, the
national minimum wage in Russia remained fixed at 152.8 € per month, that is 1,834 euros

per year, taking into account 12 payments per year. Because of emigration and low birth rates,

Russia's population is projected to decline precipitously in the next few decades. According to

the Russian business daily Kommersant, the Russian government plans to attract 5 million to

10 million migrants from neighboring countries with large Russian-speaking populations,

including Kazakhstan, Uzbekistan, Ukraine and Moldova, to offset Russia's population

decline over the next six years. The government's efforts to attract migrants, as well as it bid

to encourage more births, managed to hold the population trend steady in recent years, but

2018 was the first year since 2008 in which Russia's population dropped in absolute terms,

falling by 93,500 to 148.8 million people. Russia's Unemployment Rate dropped to 4.44 % in

Jun 2019, from the previously reported number of 4.55 % in May 2019.

4) Technology :

Russia is one of the most technologically advanced countries in the world. It has a remarkable

history in the fields of science, IT, and space technology.

Indeed, ICT is one of the major drivers of economic development in Russia.

The ecommerce industry in Russia was worth around $19 billion in 2017. This industry is

rapidly growing and offering both local and international retailers some brilliant prospects. As

long as search engines are concerned, Yandex (a local online search engine) is the leader with

over 60% market share (Berzgal, 2019). While cash-on-delivery is still the most preferred

method of payment, online payments are becoming more and more popular day by day.

5) Environment :

Russia is one of the most visited countries in the world. Rich cultural heritage, scenic beauty,

ancient cities, museums, and 23 UNESCO World Heritage Sites are some of the factors that

attract millions of tourists to Russia every year.

However, Russia faces some grave environmental challenges. For instance, damages caused

by landfills, water pollution, air pollution, deforestation, soil erosion, and nuclear waste are to
name but a few. According to a recent survey conducted by Moscow’s Higher School of

Economics (HSE), 94% of Russians are concerned about the country’s environmental

challenges (The Moscow Times, 2019).

6) Law :

A weekly work schedule in Russia includes 8 hours per day and 40 hours per

week. Employees are entitled to 28 days of holiday per year. With Russian employment law

being very strict about overtime work, employees are required to make a written request

should they intend to work over time. The most common reason for job termination in Russia

is redundancy. In the event of dismissal during the probation period, the employers must

provide the concerned employees with a three-day notice (Lawyers Russia, 2018).

Consumer demand :

Baltika Brewery is the second largest brewing company in Europe and the leader of the

Russian beer market with over 38% market share. Baltika is now a part of its Eastern Europe

region which also includes Azerbaijan, Belarus, Kazakhstan, Ukraine, Uzbekistan, Georgia

and Moldova. The company has several production sites in St Petersburg, Baku (Azerbaijan),

Voronezh, Novosibirsk, Rostov, Samara, Tula, Khabarovsk and Yaroslavl.

The Russian Dairy Company (Rusmolco) is one of the leaders of the Russian dairy industry. It

ranks within the top three largest milk producers in the Russian Federation and is the largest

milk producer in the Penza region. In 2012, Rusmolco entered into a strategic agreement

and launched a joint venture with Olam International Limited, which marked a critical

milestone in the development of Rusmolco’s business. Olam International Limited (OLAM) is

a leading agribusiness operating from seed to shelf in 70 countries, supplying 44 different

products across 16 platforms to over 14 000 customers worldwide. Olam ranks within the

top six agriculture companies globally and within the top three agriculture companies in

Asia. The company has made a lot of investments to enhance its performance. In 2019

Rusmolco launched its 4.5b RUB (USD 70m) new investment program, expanding its current

capacities. Special focus will be given to animal health and growth conditions: through

innovative ventilation system, simplified access to feed and drinking each cow will get a
larger area for living. The dairy complex will also have a modernized system of heifer growth

from birth till 2 months, weight tracking and health monitoring.

Universities :

Moscow Institute of Physics and Technology is in the top 50 universities by physical sciences

in Times Higher Education rankings. The faculty trains physicists, mathematicians and

cognate disciplines specialists.

National Research Nuclear University MEPhI is another top education centre in this field.

MEPhI is second among Russian universities by highest-paid graduates. Its business partners

such as the Rosatom state corporation, Norilsk Nickel, Severstal, METLLOINVEST and other

large enterprises are members of the Employers Association. It help successful MISiS

graduates gain experience and find a job in their profession.

Saint Petersburg Electrotechnical University "LETI” is the leader in training IT specialists.

Kazan Federal University has turned out top specialists in physics, biomedicine, chemistry,

geology etc every year since.

Samara University maintains partnership relations with such leading education centres as

China’s Harbin Polytechnic University, the USA’s Bradley and Purdue Universities, France’s

Higher School of Aeronautical Constructions ENSICA and Munich and Vienna institutions. It

trains specialists in basic engineering sciences and aerospace technology.

AUSTRALIA

The economy of Australia has experienced a continuous growth with low unemployment, it is

a highly develop market economy. The economic center is Sydney followed by Melbourne.
The annual inflation rate in Australia fell to 1.3 percent in the first quarter of 2019 from 1.8

percent in the previous period and missing the market expectations of 1.5 percent.

Its GDP was estimated at 1.420 trillion in 2018, in 2018 Australia became the country with the

largest median wealth per adult. In 2017, Australia was the 13th-largest national economy by

nominal GDP and was the 25th-largest goods exporter and 20th-largest goods importer.

The Australian economy is dominated by its service sector, comprising 61.1% of the GDP and

employing 79.2% of the labour force in 2016.

Per Capita GDP (PPP) Australia is ranked 18th in the world (CIA World Factbook 2016), and

was estimated at 1.318 trillion in 2018.

As of August 2019, the Australia labour force were employed mostly in the Health care and

social assistance industry with 1723600 employers.

In 2017 Australia imported $199B, making it the 22nd largest importer in the world. During

the last five years the imports of Australia have decreased at an annualized rate of -3.4%, from

$240B in 2012 to $199B in 2017. 24% of imports correspond to machines, 12% correspond to

mineral products, 6.4 % to chemical products and foodstuffs with 4.5%.

Factors impacting the Australian construction machinery market include increasing

government investment in infrastructure development, stringent emission norms, grey

markets (illegal imports of construction machinery), economic growth, changes in oil prices,

etc.

Food and beverage industry

Food and beverage is a major industry sector for the Australian economy, in terms of both its

financial contribution and employment. Food and beverage processing is Australia's largest

manufacturing industry. Industry players are diverse in size - from multinationals producing

large volume fast-moving consumer goods through to smaller players with flexibility to meet

demand for niche gourmet items. The industry is highly dynamic driven by demanding

consumers seeking diversity, quality and value. The ethnic and cultural diversity of Australia

is reflected in the food range available. Right across the supply chain, the Australian food and
beverage industry has adopted innovative manufacturing, packaging, product development

and marketing efforts. From paddock to port, the industry is supported by reliable and world-

class transport and distribution infrastructure.

Healthcare industry

Healthcare sector had rapid development and change the last year. With the Government set

to deliver more than $30 billion in additional public hospital funding under a five-year National

Health Agreement, Australia is set to see a boom in hospital infrastructure development with

funding increasing for every state and territory. On the technology front 2018 has been an

interesting year - with advancements in robotics, Artificial Intelligence, Augmented and Virtual

Reality, and wearable devices providing new care opportunities, especially for aging and rural

populations.

Energy industry

The Australian energy industry encompasses all economic activity in relation to the

generation, distribution and supply of electricity and gas to end users.

The electricity is created in generators, which themselves are typically powered by coal, gas,

hydroelectric sources, wind and solar farms. (In rare cases, generators are also powered by

biomass.) Using gas to generate electricity can be done in one of three ways: Gas can be

combusted to move either a gas turbine, steam turbine, or a reciprocating engine, with the

result that these devices output electricity.

Gas is extracted from naturally occurring underground wells. Areas rich in gas are commonly

described as “gas fields”.

Aeronautic industry

Australia is a major buyer of US aircraft parts (HS8803, USD463 million, third largest); powered

aircraft (HS8802, USD666 million, second largest); helicopters > 2000kg (HS880212, USD269

million, third largest) and overall for aircraft, spacecraft and parts thereof (HS88, USD2536

million, 15th largest). In 2016, Australia was the largest importer of US helicopters worldwide.

Aircraft manufacturing and repair services in Australia generate revenue of USD3 billion –
including exports of USD1.5 billion. Boeing Australia has the leading local market share at

38.1% with revenue of approx. USD1.15 billion (AUD1.5 billion), and Boeing maintains its

largest presence outside of the United States in Australia.

The Australian aerospace and aviation industry is a mix of small and medium enterprise (SME)

subsidiaries that supply parts, engineering services, and expertise. Local firms specialize in

repair, maintenance, airframe component manufacturing, airport systems, infrastructure,

avionics, aero engine, and engine component manufacturing. A select group of specialists

carries out commercial aircraft maintenance.

There are 15,512 aircraft on Australia’s civil aviation register of which 11,551 are powered

aircraft; 2259 are helicopters; 996 are gliders; and 423 lighter than air. Leading brands are

Cessna (3622), Piper (1839), amateur built (1588), Robinson Helicopter (1160), Beech (634),

Bell Helicopter (286), Kavanagh Balloons (284), Boeing (257) and De Havilland (237) and

Schempp-Hirth Flugzeugbau GmbH (187). There are over 700 design, maintenance,

maintenance training, parts manufacturing and parts distribution organizations. Australia is a

key market in, and a major distribution point for, the Asia Pacific.

Australia has a large civil helicopter fleet (2259), ranking fifth worldwide. Helicopters are well

suited to supporting remote oil, gas and mining projects as well as island tourist resorts,

aeromedical and rescue services, and large agricultural properties. Australia was the largest

buyer of US helicopters in 2016.