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Electronics Production | April 21, 2009

Frost & Sullivan: Russian EMS-Market still offers growth opportunities

Russia has been looked upon as an unfavourable market for electronics manufacturing in the past by foreign electronics manufacturers. This negative perception has been in spite of the country's cost-competitive advantages as well as its growing domestic market, the market researcher writes in is newest research.
However, greater liberalisation coupled with heightened demand from key end-user segments will promote the expansion of the electronics manufacturing market in Russia. "The lowering of import duties on liquid crystal display (LCD) components will positively impact market prospects," notes the analyst of this research. "The increasing demand for flat panel display (FPD) products will be another key factor influencing the growth of the Russian electronics manufacturing market."

The demand for FPD products such as televisions and monitors has been rising rapidly over the past few years, especially due to the downward price trends of these products. The Russian government's initiative to encourage LCD manufacturing has resulted in the lowering of import duties on components used in LCD products. Such moves are expected to attract many key LCD manufacturers as well as their electronic manufacturing services (EMS) partners to Russia.

However, the global economic slowdown is a key factor restraining the entry of foreign investors into Russia. Many multinational OEMs as well as EMS companies have postponed or shelved plans to enter Russia amidst the current economic crisis. "The global economic slowdown will continue to have an impact on foreign investments in electronics manufacturing," cautions the analyst of this research. "Many multinational companies have deferred plans of a proposed entry amidst the recessionary scenario."

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