Monday, Feb. 18, 2002. Page 1
Canada Strikes Deals Worth $212M
By Torrey ClarkStaff Writer
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The leaders of Russia and Canada swapped personalized jerseys Friday on the rink were the two nations played a historic Cold War hockey game, and then a new Team Canada -- more than 300 visiting representatives of business, politics, culture and education -- faced off with Russian partners to seal a flurry of deals. After a bell rang at the Luzhniki sports hall where Canadian hockey pros pulled off a last-minute victory against the mighty Soviet team in their first-ever meeting 30 years ago, the two sides signed a total of 77 agreements, 25 of which were contracts worth $212 million in a wide range of fields, including engineering, oil and gas, metals and mining, agriculture, construction, education and even Canadian vodka imports. The event was hailed by both President Vladimir Putin and his counterpart Jean Chretien as the opening of a new economic partnership between two huge resource-rich countries, both of which called "disappointing" their bilateral trade activity, which amounted to just $650 million last year. "Thirty years later, Canada and Russia are partners," Chretien said, following the signing ceremony that was attended by veterans from both sides of the 1972 face-off. The prime minister praised Russia for its economic growth and "historic structural reforms" that he said would lead to its recognition as a market economy. "Frankly, I think that some of the Canadian business people have underestimated the potential of Russia after 1998," he added. Putin applauded the "maturity" of the relationship, but said it would improve with the removal of "Cold War stereotypes and fears of nonexistent threats." Putin said the value of the deals would be worth more than $1 billion, which Canadian officials called overly optimistic. More important than the final figure, Chretien said, was making contacts and changing misconceptions. "The numbers don't mean that much. There are many ways of valuing a contract," said Michael Novak, president of SNC Lavalin, an engineering and design firm that signed a 280,000 Canadian dollar contract with Moskva-City to design stations along the planned rapid transit link between Sheremetyevo Airport and Leningradsky Station. "It is the relationships [Team Canada] creates that give the opportunities that will pay off in the future." The long-term value of the ensuing projects and follow-on contracts, however, could reach into the billions. Canadian engineering design firm Hatch signed a C$400,000 contract with Russia's No. 2 aluminum producer SUAL to conduct a pre-feasibility study of a planned greenfield alumina refinery near SUAL's Sredne Timan bauxite mines in the Komi republic. The two sides also signed a general cooperation agreement relating to a new aluminum smelter. SUAL president Viktor Vekselberg said in an interview that the value of the project could reach $1.5 billion. Similarly, Gartner Lee, a Canadian waste management firm, signed a memorandum of understanding with Moscow City Hall on environmental cooperation for an undisclosed amount. Gartner Lee vice president Ronald Portelli said the deal could potentially surpass a similar, multimillion-dollar project in Malaysia. There were other deals under discussion that were not represented at the signing ceremony, such as the joint development of a new locomotive by the Railways Ministry and transportation and avionics giant Bombardier. Other major contracts reflected the two countries' main sectors. The West Group, which has helped build gas stations in Ryazan, Tula and Kaluga, signed a C$38 million contract with TNK to construct a chain of more than 650 gas stations and a $4 million contract for software to integrate TNK's gas stations. RJZ Mining Corporation signed a C$24 million contract to provide oil and gas exploration and development management services and equipment to Volganeft. Ronald A. Chisolm signed a C$39 million contract to supply dairy and meat products to Sistema-Agro, and Conicor Consul International Group signed a C$25.5 million contract with Agropromyshlennaya Kompania to modernize 12 poultry farms. Residential housing company Nascor, which already has a wooden-frame production plant in Rostov-on-Don, signed a $2.5 million agreement with the regional administration of Khanty-Mansiisk. The Canada Mortgage and Housing Corp. signed a protocol with Gosstroi, which has established new building codes for single family wood-frame homes based on the Canadian building code. Diamond monopoly Alrosa signed a memorandum of understanding with Export Development Canada, which would insure and arrange financing for Canadian companies working abroad. In addition, regional administrations from both countries signed letters of intent to develop an Arctic trade bridge by forging closer links between the northern ports Churchill, Manitoba on Hudson Bay and Murmansk on the Barents Sea, as well as polar air routes between Manitoba and Krasnoyarsk. The ceremony contained some surprises, such as the Canadian entrepreneur who plans to import vodka to Russia. Gary Pollak, president of Canadian Iceberg Vodka, said the product, made from real icebergs, was aimed at the growing middle class in Russia, "which is searching for something new." And Montreal-based Montrade Inc. was awarded a $3.5-million contract to supply patented artificial grass to the Luzhniki Corporation for the Olympic stadium and eight nearby soccer training fields. The two leaders took the opportunity not only to praise each other's country, but also to raise some of the problems and call on the business communities to pitch in to help. "The experience of some Canadian investors has tarnished the Russian market in the eyes of many more," Chretien said. "Both Russian government and business have an interest in identifying the real causes ... if we are to succeed in lifting our business relationships to another level." Putin called for Canada to open its markets to Russian steel. "Both sides incur losses on a strategic level," he said. Chretien traveled Sunday with another Team Canada delegation to Munich and Berlin, Germany. |
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