Biz people

Tycoon warns of energy focus

Russian tycoon Oleg Deripaska, who is seeking to add an oil producer to his growing range of holdings, says his country's economy would benefit from a drop in energy prices.

"The Russian economy is too focused on the resource sector," Deripaska said in Moscow. "If oil drops, the Russian economy will focus" on other areas and help manufacturers, he said.

Deripaska (above right) stands to benefit. Through his holding company Basic Element, he controls United Co Rusal, the world's largest aluminum producer, and is using a fortune estimated by Forbes this year at $13.3 billion to expand his stakes in automaking, construction and aviation.

A 58 percent jump in the price of crude in 2007 is pushing Russia to a ninth-straight year of growth. The Economy Ministry says the world's biggest oil and natural-gas producer will grow 7.3 percent this year.

Deripaska's diversification drive includes a bid for Russian oil company OAO Russneft. Billionaire owner Mikhail Gutseriev claims he is being pressured by the state to sell and fled the country earlier this year amid a criminal investigation into him and Russneft.

Even with the price of crude nearing $100 a barrel, oil companies need to learn to become more efficient and diversify, said Deripaska, a former nuclear physicist and metals trader.

"In the oil business, there is no real focus on cost," he said. "Oil companies are big investment houses. If they want to do something they always use a subcontractor. It's not a good model."

Gisele proves to be model investor

Brazilian supermodel Gisele Bundchen is proving to be as savvy as professional investors hedging risks in the foreign-exchange market.

Bundchen (right), who Forbes magazine says earned an industry-best $33 million in the year through June, is making sure she is paid where she works, according to Patricia Bundchen, her twin sister and manager. Bundchen's website says of her advertising campaigns for 16 companies this year, nine are with ones in Europe, three are Brazilian, one is Turkish and another is for part of a Japanese firm. Two are from the United States.

The 27-year-old model's currency prowess surfaced in the September 12 issue of the 1 million-circulation Brazilian weekly Veja, which quoted Bundchen's preference to be paid in euros for representing Cincinnati-based Procter & Gamble Co's Pantene hair products.

Bloomberg News has spoken to her manager and agent several times since then and was the source of worldwide media reports on Bundchen after an exclusive November 5 story, "Supermodel Bundchen Joins Hedge Fund Managers Dumping Dollars", that showed the model's affinity with Warren Buffett and Bill Gross, both longtime bears on the dollar.

The US currency fell to a record low last week against the 34-year-old Trade Weighted Dollar Index, a foreign exchange benchmark.

"It's false that she only takes euros," Patricia Bundchen said in a phone interview on November 7 from Porto Alegre, Brazil. "It's a Brazilian contract, in reais," she said of the Pantene contract.

That's turned out to be the better choice. The real has risen 22 percent against the dollar this year, while the euro gained 11 percent. The real is the best performer among the 26 emerging-market currencies tracked by Bloomberg, thanks to burgeoning global demand for Brazil's commodity exports. Only the Canadian dollar has strengthened more among major currencies, up 23 percent.

(China Daily 11/13/2007 page16)