Hewlett Packard suspends production in St Petersburg, Russia

PC giant Hewlett Packard ( HP) on Tuesday announced its decision to suspend production on the outskirts of Russia's northern capital St. Petersburg.

The company cited "economic reasons" for the move following a 44 percent downturn in the Russian computer market in the first quarter of 2015, according to local media.

"The cost of assembling a PC in Russia is now much higher than in Asia," a source close to HP told local media.

HP and Foxconn invested 50 million U.S. dollars in a new production facility in Shushary, near St. Petersburg, in 2008. As well as capitalizing on the growing Russian market, the goal of the investment was to export to Eastern Europe, the Baltic states and Scandinavia.

Among the factors contributing to HP's decision were a struggling Russian economy as well as increasing demand for tablet devices, local experts said.