Machinery Exports to Russia On the Rise

According to the Economy Ministry, in 9M07 exports of Ukrainian machinery products to Russia grew to USD 3.4 bln (up USD 1.3 bln YTD), reflecting more deliveries of railcars (up USD 478 mln to USD 848 mln), tractors and automobiles (up USD 257 mln to USD 502 mln) and transformers (up USD 141 mln to USD 230 mln). Overall shipment of goods to Russia during the period reached USD 9.2 bln. As a share of total exports, machine building increased its share from 33.9% to 36.8%. Inna Perepelytsya: Exports to Russia are rising on the back of growing demand, which domestic Russian producers are unable to entirely cover. All five Ukrainian freight railcar producers upped sales to Russia this year. We believe the bulk of transformer exports came from Zaporizhtransformator (ZATR: HOLD), see our October Power Engineering report.