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Today in Russian Business

Have you noticed the drought in news out of Russia over the past few weeks? According to a report in the Moscow Times, economists estimate that the extended holiday break has cost the economy 700 billion rubles ($28.5 billion), or about 2 percent of the gross domestic product. Russia’s state-owned gas giant is well known for sports marketing, from hockey to football teams. Now Gazprom is aiming for the grand prize – a role as one of the main sponsors of the London 2012 Olympic Games.

Gazprom is competing against, somewhat ironically, both BP and Royal Dutch Shell for the £60 million-plus deal to have its brand emblazoned across the city. In other Olympic business news, Japanese firms have been invited by Russia to join in a massive project to build artificial islands in the Black Sea off the coast of Sochi – much in the style of the famous United Arab Emirates project. The project may include funding from a new $3 billion joint Russian-Japanese investment fund, aimed at attracting Japanese investment in major construction, infrastructure, and energy development projects in Russia around the Olympics and beyond.Toyota has announced that it is considering making a significant investment to add a second production line to its automotive manufacturing facilities in St. Petersburg to produce new low-cost cars. The FT reportsToyota makes only the Camry saloon, which sells for about $22,000, in St Petersburg. However, it plans to move to two shifts in mid-2009, and Katsuaki Watanabe, Toyota’s president, said last month that the carmaker wanted to increase its production in Russia to 200,000-300,000 a year over the long term.” Toyota may also follow the emerging market strategy and come out with a car that sells at about $10,000 to compete with Hyundai, Renault, and India’s Tata.GM is also focusing on future growth in Russia, and has appointed a new manager, Chris Gubbey, to head up operations in the country. “Russia is quickly becoming one of the largest car markets in the world,” GM chairman and CEO Rick Wagoner said in a statement. “In his new role, Gubbey will continue to drive our expansion in this vital high-growth market.” Gubbey was previously in charge of GM’s businesses in Australia and New Zealand.British beer company Scottish & Newcastle has snubbed a takeover a £7.6bn offer from Carlsberg and Heineken for their 50% stake in Baltic Beverages Holding, which has a strong foothold in Russian and Eastern European markets. Investors are getting very uneasy about S&N’s hard bargaining, but the UK company has so far been prevented by Carlsberg from releasing information about the strong growth prospects of BBH.Citigroup is looking to offload their 1% share of Rosneft which was acquired during the company’s controversial initial public offering, for an estimated value of $1 billion.