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28-fold Increase in Revenue Reported by VEB.RF’s Chinese Subsidiary for 2021

7 february 2022 года
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Beijing Hua Nuo E Xiang (REX) Trading Company Limited (REX, a subsidiary of VEB.RF’s entities VEB Asia Limited and Russian Export Center) has reported a 28-fold increase in revenue and a 21-fold increase in gross profit for 2021. The company’s support for exports totalled 340 million US dollars, including 295 million US dollars for non-resource non-energy exports. “There’s more work ahead to achieve our financial targets, but amidst continuing severe pandemic restrictions in China and with almost discontinued passenger service, we believe our performance is satisfactory,” said Artem Sharov, General Director of VEB Asia and Chairman of the Board of Directors of REX.

REX was established in April 2020 to encourage the external demand for Russian-made products. Organised as a for-profit, the company provides agency and consulting services and conducts international trade operations. REX is an important mechanism for implementing the Russian-Chinese governmental agreement to achieve 200 billion US dollars in trade turnover. In this connection, the company is included in the road map for promoting trade in goods and services between Russia and China by 2024. REX completed 28 transactions in the Russian and Chinese local currencies in 2021.

The most significant exports supported by the company were dairy products, colza oil, petrochemicals, polyethylene, platinum-group metals, aluminium etc. The most important high-technology exports included taxifolin, a natural antioxidant present in the Siberian larch and the Dahurian larch, used in cosmetology, food processing and pharmacology. “This is not significant by volume yet, but the product wasn’t previously supplied to China at all—although this is really high-tech exports from Russia, and we all want to boost it,” Artem Sharov emphasised. “There are plans to increase taxifolin exports by a factor of several times.”

As a reminder, passenger traffic between the two countries has fallen almost to zero since the outbreak of the pandemic: China implemented one of the strictest lockdown policies (the so-called “zero-tolerance approach”) and banned almost all travellers from foreign countries. The fact that additional inspections were introduced and that ports were closed was also a substantial impediment to trade.

VEB.RF has plans to form Russian trading companies similar to REX in South-East Asia, where Russia has a limited presence. “A business organised as a trading company is particularly suitable for Russian exporters that want to enter the lucrative and attractive markets in this region. Trading companies can provide a broad range of commercial services while serving as competency centres to promote trade with a specific country and using their quasi-public status to establish ties with its government entities,” Artem Sharov added.


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