beyondbrics

Rusnano, Russia’s state nanotechnology company, tends to specialise in projects too difficult or expensive for ordinary mortals to understand. But the logic of its latest Russian venture is a no-brainer in a nation renowned for bookworms: it wants to make screens for e-readers.

The company approved plans this week to invest $150m in making state of the art plastic electronic displays in a partnership with Plastic Logic, a California-based electronics group. Oak Investment, a US venture capital fund, is expected to support the project, part of Russia’s drive to promote innovative industries to diversify the economy away from oil and gas.

“The first tranche of $150m has been approved,” Sergey Prikhodko, Rosnano’s investment manager told reporters on Thursday. The project will begin in December and production will take place in Zelenograd, a town outside Moscow.

“Rusnano’s investment will enable us [to] dramatically expand operations in support of volume production of our next-generation products and to continue to advance our technology platform,” said Richard Archuleta, Plastic Logic’s chief financial officer.

Electronic screens manufactured in Russia will be sent to Taiwan for assembly into e-readers before export.
Rusnano said the US would be an important outlet for the end product although Russia, where the e-book market is taking off, is also likely to compete for sales.

“Russians are downloading books onto laptops, mobile phones and I-Pads, whatever they can find, says Simon Dunlop, a British businessman who founded Bookmate.ru this year to market e-books in Russia.

Russians are avid readers and rushed to buy new titles that became available at book stores during the economic boom in the last decade. But annual book sales, after doubling between 2005-08 to reach $3bn, collapsed as the financial crisis plunged the country into recession. Several high profile book retailers, including Bookberry, a Waterstone’s lookalike sponsored by Oleg Deripaska, the Russian metals tycoon, went bankrupt.

However, sales of e-books remained buoyant throughout the crisis and are expected to soar as the Russian economy recovers.

During the Soviet era, when education was a priority, book shops were established throughout Russia. But most regional outlets disappeared after the Soviet collapse depriving traditionally literary Russians of books.
“E-reading can solve the distribution problem and get a mix of books across a large geography,” says Dunlop.

Plastic Logic said it had chosen Russia as the “best strategic expansion opportunity” after evaluating multiple countries for its expansion efforts.

The project with Rusnano will breathe new life into Zelenograd where Soviet-era electronics research and manufacturing have fallen on hard times.

“Russia provides access to an enormous talent pool of scientists and engineers, and proximity to our European centers in Cambridge and Dresden, said Thorbecke.

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