Sistema unit in high-tech JV with ZTE

MOSCOW, RUSSIA: Russian holding company Sistema's high-tech unit and Chinese telecoms equipment producer ZTE will set up a joint venture to make innovative products, Sistema said on Thursday.

The venture between Sitronic and ZTE , China's No. 2 telecoms equipment maker, is expected to set up production sites in the Russian city of Zelenograd outside Moscow as well in Hangzhou and Shenzhen of China.

Sistema's Chairman Vladimir Yevtushenkov told reporters on Thursday the two companies will invest equal amounts in the venture which will produce components for the Russian-led GLONASS navigation system, among others.

He was also quoted by the Interfax news agency as saying Sistema and ZTE will each invest more than $1 billion in the venture, including the construction of several plants and research and development (R&D) centres.

"Sitronics and ZTE plan to make investments in the joint venture by the end of 2011 in the form of cash, intellectual property or production facilities," Sistema said in a statement.

The venture is part of a strategic cooperation agreement between Sistema and ZTE which on Thursday signed a memorandum of understanding during Chinese President Hu Jintao's visit to Moscow