Competitive position

The transport infrastructural construction market in Russia is highly diversified. Mostotrest is the absolute leader of the considered market with 8,6% share (*estimated on the base of the amount of works performed using own in-house capabilities in 2011). The biggest part of the Russian transport infrastructural construction market (57%) is taken by roads and bridges construction. By its own, it makes up the main part of the Mostotrest business (84%, based on the backlog of the company at 30 June 2012).

The list of the main Russian competitors and the companies’ activities is following.

*Industrial and Civil Construction includes different objects of construction (hydrotechnical structures, culverts, buildings and/or their foundations), and each company works with some of them.

That is clear that business of all of the listed companies is almost the same. However, above the fact that Mostotrest has the biggest market share in Russia in transport infrastructural construction, it also has the longest history, wide partners’ network, and it is the only one public company from the list above. These facts show the competitive advantage of Mostotrest in the Russian market.

For the main foreign competitors we took three foreign analogue-companies. The companies are: Strabag (Austria), Hochtief (Germany) and Enka (Turkey). All of these companies have their branches in Russia and, above all, they work in transport infrastructural construction. According to the research, in general, the cost of projects of each company is several-times higher than of Mostotrest (on the basis of backlog as at 30.06.2012), but less if just the cost and amount of projects on the territory of Russia is taken.

Mostorest is developing constantly and it has plans to enter the related segments such as operation, design & engineering, maintenance & repair (according to its long-run strategy). Moreover, it has a new line of activity from the end of 2012 – concessions.

All of the statements explain that the company has an internal tension to grow and expend. Mostotrest, gratefully to the diversification of its construction, is stable in case of capital and investment-flow movements in the industry. Buying the controlling stake of concessioner in November, 2012, Mostotrest shows the tension to participate in the new business project. This allows, among other things, to have the stable relationships with Government and official departments.

Though, the company has already showed its ability to carry out the government projects. In the beginning of 2012 Dmitry Medvedev, leaving the post of the president, appointed Mostotrest as a general contractor of the road construction from the inside of the Ring to Skolkovo (value of the contract - 33 billion rubles). And recently, Mostotrest won a Moscow Construction Department tender on being a general contractor of constructing a part of the highway Moscow - St. Petersburg in the north of the capital (value of the contract – 23,2 billion rubles). Furthermore, now the company is implementing the special orders in Sochi area.