INTERVIEW: Alstom may expand localization in Russia in hard times

MOSCOW, Oct 5 (PRIME) -- France’s Alstom is studying expansion of localization in Russia amid economic stagnation to cut prices and maintain competitiveness, President for Russia, Ukraine and Belarus Philippe Pegorier told PRIME in an interview Wednesday.

Alstom raised its stake in Russian railway equipment maker Transmashholding to 33% from 25% in 2015 through a purchase of an 8% stake in the company from Russian Railways for 54 million euros. “We will have to continue to localize our production more and more as we cannot produce at such high costs, we have to cut production costs of our locomotives. That is why we increased our stake in Transmashholding,” Pegorier said.

“We want to produce more and more there. Right now, our localization is at 70–75%, but we want to raise the share. No one is able to have 100%, but we want to at least increase ours.”

Alstom may even raise its stake in Transmashholding. “We have no such plans in the short term, but if there is a chance in the future – then why not?” he said.

He said that the situation in the Russian economy is improving gradually. “The peak of the crisis was passed in the summer or spring, and now growth is taking place, albeit a slow one. This year, I think, the gross domestic product will fall by about 0.5%,” he said.

Pegorier, which is also a management board member at the Association of European Businesses in Russia, said that relations between Russia and the West is stabilizing from the point of view of sanctions.

European businesses account for about 70–75% direct foreign investment in Russia. “Almost every European company has chosen to not leave Russia. Why? Because Russia is attractive,” he said.

An upcoming election in France may improve relations with Russia, but relations with the U.S. and Germany will depend on results of their elections.

“That depends on the results, but it may (improve the situation) in France…France has special connections (with Russia) which it uses, but we may do more, and we hope that will happen,” he said.

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