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Prime Minister Vladimir Putin meets with Viktor Vekselberg, president and owner of Renova Group

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Transcript of the beginning of the meeting:

Vladimir Putin: Mr Vekselberg, we have already discussed the investment project in Chuvashia. This issue was raised at a recent meeting at RusNano. Renova Group and RusNano are implementing this project together. The investment in it is quite impressive, about $400 million. This is a truly high-tech project. What progress has been made on this?

Viktor Vekselberg: Mr Prime Minister, as you know, Renova Group invests a lot in assets in the West, mainly in high technology. About five years ago we purchased shares in several high-tech companies. I have to admit that at first people were skeptical of Russian capital. We were seen as speculators, unlikely to stay in the market for very long. But as time passed, these attitudes changed, and our international partners are beginning to understand that we are strategic investors and have long-term plans, including the project you mentioned.

Almost two years ago Renova Group and RusNano established a joint venture that uses Oerlikon's technology [Renova Group is the major shareholder of Oerlikon Corporation AG based in Switzerland]. We're currently constructing the necessary facilities. I think we're about halfway through this process now. Large-scale construction has begun already, and towards the end of the year we'll start installing equipment. In early 2012 the plant will start manufacturing solar panels with thin film coatings. This will be the first such plant in Russia. Oerlikon is the global leader in this market, and we'll take advantage of its technology to develop alternative solar energy in Russia.

We have already begun the next phase of this project of building plants that will manufacture materials we'll use to create solar energy parks. We are currently selecting sites for such parks. Clearly, they will be located in southern Russia, which gets more sunshine. There are several offers in the North Caucasus and the Stavropol Territory. I think we'll soon decide on the sites to start constructing a solar energy park in 2012. It will be equipped with solar energy modules, which will be made based on this technology.

It is important that new legislation for alternative energy is being developed now. Alternative energy is not only solar power or wind power, it's also high tides and bio-energy. This sector is critical for the future of Russia even though the country is rich in oil and gas. It is essential to be a leader of high-tech industries that are sure to prove their relevance and effectiveness soon.

I'd like to ask you to help to expedite the process of drafting the legislation for this sector.

Vladimir Putin: All right. I remember when you began investing in international high-tech assets, you faced certain difficulties, and the government tried to support you. How effective was this assistance in your opinion?

Viktor Vekselberg: The support we received from the government, and from you personally, has been critical to us because it's always difficult to enter international markets and we are lacking in experience here. State support matters very much for us.

This position of the government is also very important for the decision-making process at inter-governmental commissions. Thank you for confirming your support during your meetings with international leaders and company executives. We've made some headway here, and it's important for us and other companies to sustain this positive trend. Our partners may also face difficulties, but one should remember that inter-governmental agreements can translate into effective business projects only when the governments have good relations with each other.

Vladimir Putin: It's good that even during the global financial and economic downturn Russian investors that invested in foreign assets turned out to be prosperous, and not only managed to carry on through these difficult times but also propped up the companies they invested in, helping them to stay afloat. Now they can take advantage of their high-tech assets abroad and use this technology for new innovative projects in Russia. This has been our primary goal from the outset. I'd like to wish you every success in this. This process is a two-way street. And Russia is successfully integrating in the global economy, particularly in the European economy.

Viktor Vekselberg: I absolutely agree with you. In particular, Oerlikon, in which we acquired the majority stake, faced grave financial difficulties during the crisis. It was on the verge of bankruptcy because of its large credit portfolio, which it formed even before Renova Group acquired a share in it. What rescued the company was our decision to issue additional shares, which required over $300 million from us. But the key thing is that this measure allowed the company to remain stable. The company has successfully dealt with its financial problems and is pretty stable today. Incidentally, I'd like to thank VTB Bank for partnering with us and assisting with this transaction. As a matter of fact, one of the main functions of this bank is providing assistance for Russian investment companies and I'd like to note that its efforts have been very effective.

I would like to stress that the concept of technology transfer has already brought positive effects, and it's not our only project. We are creating a research centre at the Ioffe Physics and Technology Institute, which will conduct research for various projects, including for our international partners. We have opened several research centres for innovative surface materials in Elektrostal, and we're also working on similar projects in Nizhny Tagil. We have opened a plant in Serpukhov to produce machines and equipment for the chemical industry. These are high-tech production facilities; we have created new jobs there and provided investment. Our main objective is to adopt new technology in Russia and create production facilities that will meet modern international standards.

Vladimir Putin: Good.