Russian investment gives Plastic Logic flexibility

One of the first Bay Area casualties of the tablet war is back in the game, with Russian help.

Mountain View's Plastic Logic, whose flexible display e-reader was shelved last year because of production delays and the Kindle/iPad blitzkrieg, just announced a $700 million financing deal led by state-owned Russian Corporation of Nanotechnologies.

In exchange for a reported 25 percent stake, Rusnano is investing $150 million directly into Plastic Logic, plus $100 million in debt guarantees. Palo Alto's Oak Investment Partners, an earlier investor, is putting up an additional $50 million, while Plastic Logic said it will raise an additional $400 million "over the next few years," according to a joint Plastic Logic-Rusnano statement Tuesday.

Starting with a production site in Zelenograd, a high-tech center 23 miles from Moscow, the company "aims to establish a commercial plastic electronics industry in Russia," the statement said.

Founded in 2000 by researchers at Cambridge University in England, the company has an R&D; center there and a state-of-the art factory in Dresden, Germany, where flexible displays for its 8 1/2-by-11-inch Que ProReader were manufactured using plastic semiconductors.

No U.S. support: Company officials would not disclose the nature of Que ProReader's successor, or its stage of development. According to the Financial Times, Plastic Logic "plans to bring out a new family of plastic chips by 2016."

"We determined Russia, with Rusnano as an investment partner, was the best fit for our business," CEO Richard Archuleta said in the statement. Archuleta told the Wall Street Journal Europe that state-backed funds in China, Singapore and the Middle East express interest in investing. But not, apparently, the United States.

"I was not surprised the U.S. did not support (the company setting up the second factory in the United States) given the political climate and election, but it is a disappointment. Job creation is a hot topic, but the U.S. is not able to develop a policy to encourage factories to be built in the U.S.," he said.

Rusnano, established by state law in 2007, invests in energy, biotech and materials projects in addition to nanotechnology. "Flexible plastic electronic displays will provide another major milestone in how people process information," said the corporation's managing director, Georgy Kolpachev.

"Entering this new disruptive segment at the stage of its inception gives Russia a chance to win a leading position in the global market of future electronics."

One more unto the breach: Third time a charm?

Twice before, Assemblywoman Nancy Skinner, D-Berkeley, has tried to bring "e-fairness" to California, only to fail in the face of gubernatorial vetoes.

Today in Sacramento, Skinner is reintroducing AB153, legislation requiring out-of-state Internet retailers, such as Amazon.com, to pay their fair share of state sales tax.

Officially, the legislation requires out-of-state online sellers with affiliates in California who collect commissions from sales referrals to the online sellers to collect sales tax, or "use tax," on sales to California residents. The affiliate requirement, similar to the law in New York - which is been upheld by New York courts - is a minimum required under California law to establish a presence in the state of companies, such as Amazon, that don't have their own brick-and-mortar stores here.

According to a statement from Skinner's office, she will be joined at a 10 a.m. news conference at the state Capitol by Bill Dombrowski, CEO of the California Retailers Association; Chuck Shaw, state director of the International Council of Shopping Centers; small-business owners; a senior executive from Barnes & Noble; plus representatives of trade union and community groups.

Other corporations and business groups supporting the legislation include Wal-Mart, Target, the Los Angeles Area Chamber of Commerce and the Valley Industry and Commerce Association.

The San Francisco Chamber of Commerce is said to be supportive, although it has not taken an official position. "Probably soon," I'm told.

Opportunity knocks: Looking to do business with South Korean software companies? They're looking to do business in Silicon Valley.

To help both sides out, the Korea Software Promotion Center officially opened its doors in San Jose on Tuesday.

"Korea is known more for its hardware, like LCDs and companies like Samsung and LG Electronics," said Eric Kwon, an executive with the Korea Trade-Investment Promotion Agency, which started the initiative. "Now we're looking to help Korean software companies get better known here, and to get more business."

Kwon said up to 10 Korean software companies are looking to open offices in the valley by the end of the year, and to hire local engineers both for operations here and in Korea.

The center is housed in the Korean agency's 50,000-square-foot San Jose site, which provides office space for 14 Korean and 21 small local companies.

Korea's software strength, Kwon said, include high-speed Internet (way faster than ours), mobile phone technology and mass transit user applications. Korea, which counts Hyundai and Kia among its major manufacturers, is especially on the lookout for U.S. automobile software technology, he said.

More information at www.kotrasw.org.

Blogging at www.sfgate.com/columns/bottomline. Facebook page: sfg.ly/doACKM. Tweeting: @andrewsross. E-mail: bottomline@sfchronicle.com.

This article appeared on page D - 1 of the San Francisco Chronicle