Carrefour to Invest in Russia

Posted on Wednesday, September 24th, 2008 | In Russia

Contributed by: Jim Musselwhite (http://www.straightstocks.com) -

Carrefour, the French retail giant, said on Monday that it will invest in Russia $100 million in the Krasnodar region of southern Russia over the next five years. This is part of Carrefour’s plan to expand into the former Soviet Republic.

Seeking to speed growth in high-potential markets, part of Carrefour’s plans to invest in Russia includes building two stores in Russia, one in Krasnodar and one in Moscow. The company hopes to open late this year or early next year and has plans for another five openings in 2009, as further extension of its invest in Russia initiative.

Under the ‘invest in Russia’ project laid out Monday, the local administration will “provide support for Carrefour business development” through finding suitable locations for purchase or lease, which will allow Carrefour to open several hypermarkets and other retail outlets in the region.

Carrefour’s move to invest in Russia comes during tense relations between Russia, Europe and the U.S. over the war in Georgia and related fears over the revival of politically associated risks.

Carrefour’s move to invest in Russia is part of its already huge holdings, being the send largest retailer just behind Wal-Mart Stores Inc., which has also considered investing in Russia.

Last week Russia suffered very heavy losses during a week of chaos on world financial markets as banking systems ran short on cash, which has prompted the financial ministry to grant emergency loans. It seems to be commercial growth and interests who will invest in Russia, and as such, these will make the most attractive plays to international investors seeking to invest in Russia.