Novartis broke ground this week for our new manufacturing plant outside St. Petersburg, Russia. The facility is part of our $500 million, five-year commitment to help improve Russia’s healthcare infrastructure. Our investment addresses local manufacturing, R&D collaborations and public health development.
We are one of the first healthcare companies to make a full-size investment in Russia. We didn’t want to wait for others to enter the market. We wanted to work together with the government to become Russia’s leading partner in supporting their efforts to reform and expand access to healthcare.
I’ve seen vast changes in Russia over the last few years that are positive for multinational businesses. But I believe every government has to challenge itself to sustain innovation, create jobs and encourage economic growth. Russia of course has more steps to take, but so does the US.
Today, I’m constantly faced with choices about where to prioritize our investments. Switzerland is our headquarters, and we benefit from its stability, highly educated talent pool, and reputation for quality. But for the future, emerging markets are critical to our growth. We’ve invested significantly in China, and have just started to build a $1 Billion R&D institute in Shanghai. We’ve also announced plans for a manufacturing plant in Brazil. Yet I’ve had mixed thoughts about next steps in Russia, given perceptions about lack of transparency and whether it could be viewed as a top priority for business investment.
Historically, it has been hard for foreigners to get a foothold in Russia. Yet the country ranks among the emerging markets slated for high growth. I asked myself what was driving my interest in investing? Is it simply to protect existing market positions or to build a mutually beneficial partnership with Russia? For me, one key factor is patient needs. There is significant unmet medical need here, and high mortality from preventable diseases. Russia’s population is declining, and the government recognizes the need to improve access to quality healthcare.
Recently, I participated in a Foreign Investment Advisory Council meeting, a task force of international business representatives and government officials where we discussed how Russia can attract investment and become a leader in innovation.