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Doing business in russia all presentations (final)
 

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    Doing business in russia all presentations (final) Doing business in russia all presentations (final) Presentation Transcript

    • Doing Business in Russia Tuesday, 10 December 2013 The Caledonian Hotel, Edinburgh
    • Doing Business in Russia AGENDA 09:30 – 11:10 11:10 – 11:30 11:35 – 13:10 13:10 – 13:30 13:30 Presentations Networking break Breakout sessions Group A: Dornoch Suite Group B: Glamis Suite Group C: Boardroom Networking lunch Start of one to one sessions
    • Doing Business in Russia Welcome and Introduction Yuri Andreev Country Manager SDI Russia
    • Doing Business in Russia Introduction and Visa considerations Sergey Krutikov Consul General of the Russian Federation, Edinburgh
    • Consulate General of the Russian Federation in Edinburgh Doing Business in Russia 10th December 2013
    • Russian Consular Services in Edinburgh • Notarial Services – Consulate General • Visas – Visa Application Centre
    • Notarial Services • Mr Timofey Kunitskiy Consulate General of the Russian Federation 58 Melville Street, Edinburgh EH3 7HF 0131 225 34 84 visa@edconsul.co.uk • Consular Certification Equal to Russian Notary Public Certification • ‘Legalisation’ Question
    • Notarial Services • Attestation of Signatures • Verification of Translations – NB: No Translation Service • Attestation of Copies • Witnessing Powers of Attorney
    • Visas – Stereotypes and Opinions • • • • • • “Closed Country” Complicated Procedure “Travel Agencies Only” High Costs “Shopping” Approach Facts: – – – – 13 000+ visas issued annually Effectively 100% approval rate for submitted applications No processing-related delays “Walk-In” approach enables applicant to discuss the procedure with the Centre’s Staff
    • Visas – Visa Application Centre Russian Visa Application Centre In Edinburgh Monday - Friday 16 Forth Street, Edinburgh EH1 3LH http://ru.vfsglobal.co.uk 0905 889 01 49
    • Visas – Application Process • Fixed list of documents required • Fixed application assessment time • Relatively quick assessment – 7 days – Next day • No appointment required • Submitting applications by post or by proxy allowed
    • Visas - Business Visitors • Business Visa – – – – – Single/Double/Multiple Entry, Up to 1 year Invitation from Federal Migration Service (FMS) Telex (digital) Invitation Single Entry, 7 Day Processing - £77.60 Multiple Entry, 7 Day Processing - £227.60 • Special (Special Purpose) Tourism Visa – – – – Single/Double Entry, Up to 1 month Hotel or Travel Agency Voucher/Confirmation Single Entry, 7 Day Processing - £77.60 Double Entry, 7 Day Processing - £92.60
    • Visas - Business Visitors FMS Invitation
    • Visas - Business Visitors • Business Visa for the Schengen Zone nationals – Single/Double/Multiple Entry, Up to 5 years – Invitation From a Company Registered in Russia – Next Day Service Not Available – Single/Multiple Entry, 7 Day Processing - £57.60
    • Useful sources and links Russian Visa Application Centre (Edinburgh, London) http://ru.vfsglobal.co.uk Embassy of the Russian Federation in the United Kingdom / Consulate General of the Russian Federation in Edinburgh http://rusemb.org.uk Russian Trade Delegation in the United Kingdom http://rustrade.org.uk
    • Doing Business in Russia Russian market overview and business context Yuri Andreev Country Manager SDI Russia
    • Yuri Andreev Scottish Development International December 2013
    • INDEX Russian Market Highlights SDI Moscow – Role, Place, Difference Q&A, discussion
    • Russian Market Highlights - GEO, DEMOGRAPHICS, ECONOMY •World’s largest country = Scotland x 217 •143 million population – within top 10 in the world •Nearest BRIC – GMT + 3 (+4 winter)
    • Russian Market Highlights - GEO, DEMOGRAPHICS, ECONOMY Region (000s km) Density/ sq km Share of Urban Population 26.2% 650 57.1 80.9% 22.97 16.2% 591 38.8 56.8% 13.44 9.5% 1,687 8.0 82.5% 6.44 4.5% 6,169 1.0 74.3% Siberian 19.56 13.8% 5,145 3.8 70.9% Urals 12.28 7. Volga 8.6% Nizhniy Novgorod Samara Perm 21.2% Ufa Saratov Kazan 1,818 6.8 79.3% Central Population (million) 3. Northwestern St. Petersburg Southern 1. Central North-Western Moscow Ryazan Tula Twer Far-Eastern Vladimir Voronezh Yaroslavl Volga 2. Southern Krasnodar Rostovon-Don Volgograd Stavropol % Total Population 37.12 6. Urals Yekaterinburg Chelyabinsk Tyumen Area 30.12 1,037 5. Siberia Novosibirsk 29.0 Krasnoyarsk Omsk Irkutsk 4. Far East Vladivostok 70.3%
    • Russian Market Highlights - GEO, DEMOGRAPHICS, ECONOMY Rank 1 Cities Population Rank Cities 3. Northwestern Moscow St. Petersburg 10,563,038 11 Ufa 6. Urals Yekaterinburg Chelyabinsk Tyumen Population 1,030,812 2 St. Petersburg 4,600,276 12 Perm 986,497 3 Novosibirsk 1,409,137 13 Volgograd 979,617 Yekaterinburg 1,372,800 14 Krasnoyarsk 962,466 Nizhni Novgorod 1,271,045 15 Voronezh 847,620 Kazan 1,136,566 16 Saratov 827,193 Samara 1,133,754 17 Tolyatti 721,752 18 Krasnodar 1. Central Moscow 4 Ryazan Tula Twer 5 Vladimir Voronezh Yaroslavl 6 7 8 9 10 Omsk 2. Southern Krasnodar RostovChelyabinsk on-Don Volgograd Stavropol Rostov-on-Don 7. Volga Nizhniy Novgorod 1,127,675 Samara Perm Ufa 1,095,909 Saratov Kazan 1,048,124 19 20 5. Siberia Novosibirsk Izhevsk Krasnoyarsk Omsk Irkutsk Yaroslavl 713,426 4. Far East Vladivostok 610,633 606,880
    • Russian Market Highlights - GEO, DEMOGRAPHICS, ECONOMY 2007 2008 2009 2010 2011 GDP (Nominal €bn) 949 1,137 878 1,148 1,272 GDP (Real) Growth (%) 8.1 5.2 -7.9 3.4 4.3 6,675 8,027 6,213 8,141 9,055 Unemployment 6.1 6.3 8.4 7.6 7.1 CPI Inflation, yr/yr av. % 9.0 14.1 11.7 6.8 6.1 GDP per Capita (€)
    • Russian Market Highlights - GEO, DEMOGRAPHICS, ECONOMY
    • Russian Market Highlights - GEO, DEMOGRAPHICS, ECONOMY 2007 2008 2009 2010 2011 Consumer Spend (€bn) 455.83 547.33 479.99 593.98 712.78 Total Retail Market (€bn) 310.23 382.10 330.33 399.19 479.03 Grocery Retail Market (€bn) 139.46 174.17 160.70 193.61 231.85 981 1,227 1,137 1,379 1,657 44.9% 45.6% 48.6% 48.5% 48.4% Grocery Retail Spend / Capita (€) Grocery Retail as a % of Retail Grocery Retail Market Europe TOP 10 T/o (€bn) Grocery Retail Market Global TOP 10 T/o (US$bn) 1. France 208.17 1. 2. Russia 193.61 2. China 789.91 3. Germany 162.46 3. Japan 359.96 4. United Kingdom 161.96 4. India 350.38 5. Italy 129.56 5. Brazil 289.92 6. Spain 97.05 6. France 276.04 7. Turkey 67.73 7. Russia 256.38 8. Switzerland 39.77 8. Germany 215.43 9. Poland 38.43 9. United Kingdom 214.60 10. Belgium 34.92 10. Italy 171.80 USA 881.84
    • Russian Market Highlights - GEO, DEMOGRAPHICS, ECONOMY Consumer and Grocery Retail Spend Dynamics Per Capita (Euro) 5,500 5,095 4,500 4,232 4,000 3,500 3,359 3,000 2,500 2,000 2009 2010 2011e 1,657 1700 Grocery Retail Market/Capita EUR Consumer Spend/Capita EUR 5,000 1600 1500 1,379 1400 1300 1200 1,137 1100 1000 900 800 700 2009 2010 2011e
    • Russian Market Highlights - GEO, DEMOGRAPHICS, ECONOMY Global oil consumption Crude & condensate production by Ru majors
    • Russian Market Highlights – UK-RU trading relations UK-Russia trading context UK EXPORTS TO RUSSIA UK TOP 20 MARKETS 2011 (GOODS) Country of export £ millions £ millions Rank 2011 Rank 2010 2011 Change in 2011 Jan-Dec 2010 Jan-Dec % change Jan-Dec Jan-Dec ranks Trade in Goods 01 02 03 04 05 06 07 08 09 10 11 12 UNITED STATES 38,949 37,413 GERMANY 33,038 28,539 Total FRANCE 23,056 20,262 NETHERLANDS 22,671 20,537 Road vehicles IRISH REPUBLIC 17,219 16,375 Medicinal BELGIUMand pharmaceutical products 15,354 12,946 Specialised industrial machinery ITALY 9,888 8,798 SPAINgenerating machinery 9,449 Power and equipment 9,700 CHINA 7,225 Miscellaneous manufactured 8,773 nes article SWEDEN 6,141 5,408 Other transport equipment INDIA 5,411 3,952 General industrial and equipment, and parts nes SWITZERLAND machinery 5,375 5,218 Chemical materials and products nes HONG KONG 5,062 4,202 CANADAoils, resinoids, perfumess and cleansing prep. 4,848 4,318 Essential RUSSIA 4,781instruments 3,451 Professional, scientific and control UAE 4,715 Articles of apparel and clothing accessories 3,892 JAPAN 4,395 4,101 Electrical thereof POLAND machinery, nes and electrical parts 3,676 4,187 Telecoms and AUSTRALIA sound recording and reproducing apparatus 4,179 3,175 TURKEY 3,698 3,074 Source: BIS analysis of data from HM Revenue & Customs Total Exports 4 GBP 16 14 10 5 19 12 -3 21 14 37 3 20 12 39 21 7 14 32 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 CountryShare CountryShare of 2010 % Change % Share 2011 Jan-Dec 2010 Jan-Dec Total Exports in Exports 2011 Exports GBP 0 1 13.2% 2 0 11.2% 38.6% 4,781,127,609 3,450,708,224 4 1 7.8% 3 -1 7.7% 1,745,031,882 1,090,323,767 60.0% 5 0 5.8% 304,291,029 294,222,979 5.2% 3.4% 6 0 271,927,800 167,236,095 3.4% 62.6% 8 1 7 -1 242,371,585 180,363,348 3.2% 34.4% 9 0 228,649,387 147,428,114 3.0% 55.1% 10 0 2.1% 184,066,100 106,353,407 73.1% 15 4 1.8% 180,058,838 128,213,591 1.8% 40.4% 11 -1 147,057,214 63,511,277 1.7% 131.5% 13 0 12 -2 130,849,460 121,370,109 1.6% 7.8% 18 3 128,760,003 93,955,400 1.6% 37.0% 16 0 126,286,792 103,467,077 1.6% 22.1% 14 -3 1.5% 120,663,955 102,740,939 1.4% 17.4% 17 -1 85,811,792 58,012,036 1.4% 47.9% 20 1 22 2 1.3% 14.3% 10.9% 7.7% 7.8% 36.5% 6.2% 6.4% 4.9% 5.7% 3.4% 3.7% 5.1% 2.8% 4.8% 2.1% 3.8% 1.5% 3.8% 2.0% 3.1% 1.6% 1.6% 2.7% 1.3% 2.7% 1.5% 2.6% 1.6% 2.5% 1.4% 1.8% 1.2% 1.2%
    • Russian Market Highlights – Scottish industry ranking Export markets ranking by Scottish industries
    • Russian Market Highlights – Customs Union Russian Federation • Capital City: Moscow • Population: 143 million • GDP (PPT): Customs Union Russia, Belarus, Kazakhstan $1.9 trillion Per capita $16,6 Capital Centres: Moscow, Minsk, Astana • Total • Population: • GDP: 167,5 million Total $2.42 trillion Per capita $14.5
    • Russian Market Highlights – SUMMARY • • • • • • • Healthy macro-economic situation Strong performance – heavy industry and consumer Parliament and presidential elections are over Accession to WTO – Aug 2012 Customs Unions with Kazakhstan and Belarus – Jan 2012 Impressive UK-RU trade dynamics Good match of SCO-RU key sector strategic goals
    • Russian Market Highlights - CHALLENGES • • • • • • • • • • Product/services not concept/idea Local certification/standards compliance/registration Packaging/labelling Language Customs/import duties Payment terms, credit insurance Marketing communications Length of time to secure business Finding the right partner Visits to market essential – group & individual
    • Russian Market Highlights – WHY RUSSIA?...
    • Russian Market Highlights - WHY RUSSIA?...
    • Russian Market Highlights – WHY RUSSIA?... Why Russia?... Views from Volvo Cars, inclusive of years 2009-11 25000 20000 15000 10000 5000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
    • Russian Market Highlights – WHY RUSSIA?... why Russia?... Views from Ayrshire 2004 - 3 clients with 4-5 orders through the year and low volumes 2005 - Showcase event in Moscow 2006 - detailed market research through OMS 2007-08 - two in-market sales visits and two Heimtextil exhibitions 2008-09 - sales picked 5 times to the level of 2004 Higher additional margins over standard goods prices. Russia is currently MYB’s second biggest export market worldwide. “…this success is fundamentally due to the research and ongoing market support from…the SDI office in Moscow” John Glen, MYB Director Sales
    • Russian Market Highlights why Russia?... Views from Ayrshire, inclusive 2009-2011 • • • • • MYB – Additional £190k sales per annum from exhibiting at Heimtextil and working with SDI Moscow Follow up meetings arranged at European shows with Russian buyers The company have recently taken on an agent in the Russian market and are looking to channel new customers through the agent. Sales in Russia were only slightly hit by the financial crisis of 2008, not effected really as compared with how their sales in the USA were affected. At the moment MYB are having a very healthy growth in sales in Russia and are fully satisfied with their Russian business. “Without SDI input and support we would not have been able to make Russia our second largest market “ – Margo Graham, Design Director, Morton Young and Borland
    • SDI Moscow the Network
    • SDI Moscow how we fit SE network SDI Moscow field office key functions: •Customer specific market research •Marketing communications •Verified advise on setting up & doing business in Russia •In-market visits’ and programmes’ arrangements •Exhibitions, seminars, networking events, learning journeys •Inward/buyer missions activities •Market awareness activities (sector & cross-sector) •Globalscot network engagement
    • SDI EMEA Number of co’s serviced by EMEA field Total 2010/11 – 483 CO’S 229 250 200 150 115 149 131 97 97 100 42 36 50 0 Duseldorf Central Europe London Northern Europe Moscow Russia & CIS Paris Southern Europe Middle East & Africa Total 2009/10 – 414 CO’S
    • SDI Moscow - product delivery 2009 - 2012 Opportunities Unique co's / Opportunities Unique co's 2011-12 2010-11 2009-10 0 20 40 60 80
    • SDI Moscow Products & Services, Sectors
    • SDI Moscow - product delivery 2011-12 Product and Engagement Type 2012 Unique co's by sector (54 total) Product Name Number of opps OMS EMLJ Int Specialist Engmnt Int Strat W/shop OMIS Globlascot 2011-12 Opps by product type 37 17 7 3 4 1 Food & Drink Textiles Energy ICT Whisky Financial services Education Forestry Tourism 14 16 11 5 4 1 1 1 1 2012 Opp's by country Russia Ukraine Kazakhstan Azerbaijan 49 4 4 1
    • SDI Moscow Products & Services Mission: To deliver high quality value add products and services aimed at winning new market business opportunities in Russia and CIS Products & services: Standard and bespoke, focused on customer needs • OMS - Overseas Market Support • EMLJ - Exhibitions & Missions, Learning Journeys • Ministerial visits (with Scottish Government)
    • SDI Moscow Products & Services - OMS CONCEPT • Support to companies to target overseas markets • Flexible, Tailored and Joined-Up • Brings together assistance from regional SE/SDI representatives & Scottish Development International field offices • Maximising the use of UK PLC exposure and SE networks/partners • GlobalScot network IMPLEMENTATION • All enquiries are channelled via SDI Scotland office to field office • Brief/terms agreement • Report/presentation of market research and target identification • Visit programme arrangement and formal introduction to the market participants, regulators, networks • Assistance on market communications • Feedback analysis, follow up and further advice
    • SDI Moscow OMS OUTPUT • Market research report, presentation or/and detailed faceto-face discussion • In-market visit programme arrangement • Hand-holding in-market visit assistance • After-sales support
    • SDI Moscow Products & Services - LJ CONCEPT • 3-4 days in-market visit for first-time exporters, newcomers usually timed along with major in-market event (exhibition, conference) • Doing business in … market brief and Q&A’s with market participants and regulators • Access to UK Plc and SE networks • Visits to key targets / individual meetings • Cultural icebreaking
    • SDI Moscow Products & Services - Exhibitions CONCEPT • Scotland stand with individual spaces for companies • Pre-visit market brief • Individual companies enquiries (under OMS or OMIS terms) • Marketing communications • Shipment logistics • Visitors traffic coordination and management • Post-event follow up and business development
    • SDI Moscow Products & Services - Missions CONCEPT • Scotland’s key sector strength focus, e.g. Subsea Technology • 2-3 strategic in-market targets • High-level communication & engagement with key decisionmakers • Partnership with UK-Scotland industry/trade associations • Platform for individual sales pitches strengthened by mission critical mass • Often – cultural link
    • SDI Moscow Staff responsibility Yuri Andreev Svetlana Simonova Regional manager Senior executive Anna Kravtsova Sector - Oil & Gas Sectors: ICT Food & drink International Admin Textiles
    • SDI Moscow Planning & Way Forward • • • • Keep the quality of service & speed of reaction to meet customer expectations Manage resources, ADE integration Q2 Set and achieve ambitious targets in key sectors: – Energy - focus on off-shore sectors in Russia and Kazakhstan – Premium Textiles - interior sector & fashion beyond Moscow market – Food & Drink – Ru 10 implementation, individual co work – Life Sciences, medical - individual company work, refresh strategic outlook – DMET – formulate market strategy – Inward investment from watching brief to active projects Key other CIS geographies – Ukraine, Kazakhstan, Azerbaijan
    • Doing Business in Russia Bilateral Trade Alan Thompson Russia Director, Russo-British Chamber of Commerce
    • An introduction and overview to The Russo-British Chamber of Commerce Alan Thompson Edinburgh 10/12/2013
    • The Russo-British Chamber of Commerce • • • • Economic Environment Update History of the RBCC Where we are today? Strategic direction
    • Economic Environment • Russians: Vladimir Putin. 3.08.2012 – We should confess we have a very modest volume of trade [between our two countries] : it is all of 21 billion [dollars], whereas with Germany we have 72. It is obvious that the United Kingdom and Germany have different sizes of their national economies but still this size difference is not 21 billion. I am certain that we can relatively easily achieve at least in the region of 50 billion in the near future. • British: John Cridland 27.11.2012 – “We’ve identified a potential £30 billion export prize by 2020 if the UK creates the right business environment for our industries to thrive, and mid-sized businesses will be at the heart of this. Russia is a significant trading partner for British businesses, with more than 600 UK companies already operating there and UK exports totalling £5 billion. In the last two years, the value of British goods exported to Russia has increased by over 80%. This is expected to grow further as Russia opens its economy up to more international trade and investment.
    • Economic Environment ‘08-’13 2008 г. 2009 г. 2010 г. 2011 г. Янв. – март 2013 г. 2012 г. млрд. долл. прирос тв% млрд. прирост долл. в % млрд. прирос долл. т в % млрд. долл. прирост в млрд. % долл. прирост млрд. в% долл. приро ст в % Оборот 22,5 34,8 12,6 -44,0 15,9 25,9 21,2 33,3 23,2 9,6 5,6 15,6 Экспорт 14,9 34,8 9,1 -39,0 11,3 24,7 14,0 23,8 15,0 7,3 3,7 22,2 Импорт 7,6 35,0 3,5 -53,6 4,6 29,0 7,2 56,9 8,2 14,1 1,9 4,4
    • The Russo-British Chamber of Commerce RBCC is a not-for-profit company that has worked to promote trade and cooperation between the UK and Russia since 1916. The RBCC: – – – works to promote trade and cooperation between the UK and Russia, helping companies in both countries to find trading partners and representing the interests of its member companies of all sizes. aims to be the first point of contact for Russian companies wanting to do business in the UK and for British companies wanting to do business in Russia. is governed by a high-level Board of Directors, who between them have many decades’ experience of doing business between our two countries. RBCC Members include multinational corporations, but also Small and Medium Sized Enterprises working in all sectors of the economy. The RBCC derives its income from membership fees and sponsorship of various activities and events held in both countries.
    • The RBCC Today • 550 companies • 15 bi-lingual employees • 3 offices: Moscow, London, St.P •A unique trade newtork
    • RBCC Fundamentals The provision of up to date, information and advice • Quarterly Magazine «The Bulletin», The Observer, And a monthly news letter Trade delegations – Kaluga Promotion: • Companies, Regions Oblasts, Republics, Products Events – for business people to meet: Seminars, Industry specific Conferences, Investment Forums, Film viewings,
    • Examples of successful investments
    • Succesful SME projects:
    • Over the last 6 months the RBCC has: 1. A min of 25 requests with a positive outcome – introductions to distributors with a view to market entry (products/services) to Russia 2. 3 companies “entering the market” 3. M&A- two major acquisition contracts faciliated 4. Bringing British businesses to the Regions of Russia with RBCC trade missions – Nizhny Novgorod, Kaluga Approximate ROI: For every 1 GBP invested into membership or the RBCC, companies on average obtain 5 GBP of value from business development, services;
    • Strategic Aim/ RBCC Ambition By 2016, the 100th Anniversary of the establishment of the RussoBritish Chamber of Commerce, the organisation will be regarded as the foremost authority on establishing trade links between Russia and the United Kingdom in both commercial and non-profit spheres; the RBCC will achieve this by concentrating on the following three strategic areas: - Through the stimulation of dialogue and interaction of both communities through the organisation of events; - Through the support and further growth of its commercial network of members – themselves both Russian and British businesses representing a wide cross section of industries and service providers through improved satisfaction for services received to individual members; - By contributing net 10bn+ GBP to the external trade between UK and Russia
    • Main aim:
    • Thank you for your attention: Alan Thompson Director, RBCC Alan.Thompson@rbcc.com +7 495 961 2160
    • Doing Business in Russia Setting up sales / distribution channels in Russian market David Cant Managing Director Albion (Overseas) Ltd.
    • Doing Business in Russia 10th December, 2013, Edinburgh David Cant Albion (Overseas) Ltd www.albionoverseas.com
    • About Albion (Overseas) • We only work in Russia • Exporter (Distributor) • UK/Russian office, warehouse, staff etc • “Consultancy” help for other exporters • Certification • “Outreach” activity (Events, Training, Publications, Online Services) • We are not theoreticians. We’re dirty!
    • Why Russia? • Increasing number of companies. • Less expensive than you think. • Geographical proximity. • Increasing political stability. • Here, we are all competing for the same business. • “Russia is one of the most industrialised of the former soviet Republics. However, years of very low investment have left much of Russian industry antiquated and highly inefficient.” (economywatch.com)
    • Killer Facts (1.5): Economy 600 500 400 300 200 100 0 1999 2000 2002 2004 2005 2006 2007 2008 2009 2010 2012 Foreign Exchange Reserves (US$bn.) Source: CIA World Factbook
    • Why Russia? – Largest Country in the world. That’s a lot of opportunity... 9 Time Zones. 70 UKs would fit into Russia.
    • Perceived Problems: • Mafia • Finding people who understand your product • Corruption • Non-Payment • IPR • Corp. Governance • FDI Slow • Accountancy Standards • Entrepreneurship • Legislative and Political Issues • High Cost of Market entry (T+M) • • • • • • • • • • • • Demographic crisis Weak military Inflation Brain Drain Capital Flight Weak Banks Climate/Size Lack of infrastructure Language difficulties Cultural barriers Economic Instability Security Issues
    • Real Problems: • Difficulty in finding reliable and tested distributors • Expense • Lack of knowledge of what the distributor is doing • Difficulty in making forecasts or sticking to targets • Export documentation • Corp. Governance • Lengthy sales cycles • • • • Poor communication Language barriers Complicated customs procedures Difficult to recruit/retain/administer/replace staff. • Missing opportunities in the regions. • Stifling bureaucracy. • Time constraints to develop full potential.
    • Where companies go wrong: • • • • Too many seek an easy way in. It is bad to try to develop a market with zero expenditure. You are not pioneers; the Board should be proactive. Take advice and help wisely. • • • • • Don’t just replicate what your company does in other markets. Don’t appoint a distributor, then go home and wait. Don’t expect to do business by email. Don’t leave export documents to Brian downstairs. Don’t assume your product is too technical to be understood.
    • Routes to market: It is important to spend money WISELY: DO’s • • • • • • OMIS report Product Certification Literature and website in Russian Planned trips Building a sales pipeline Planned exhibition participation. DONT’s • “Fact-finding” trips (a.k.a unplanned trips). • “Market Research” (a.k.a procrastination). • Sending of samples, emails etc to unknown distributors.
    • Routes to Market: • Agent • Distributor • However: • They are no longer queuing up to represent you. You must find them and put forward your case. • Russia is moving fast. Choose them wisely, or you may lose control, time and money. Consider why a distributor would wish to represent YOU.
    • Routemap - (Reactive: Zero Cost): • Desk Research: • Internet, databases, libraries e.g. IOD. • Register with www.UKTI.gov.uk • Meet your ITA (quiz them on their experience!). • Use specialist help (Bank, Freight Forwarder, etc) • Plan and budget. “Free stuff” is not always helpful. Google translate is a good example of this. • Identify all your options: DIY, Distributor, Footprint, Presence, etc • Consider reports, such as OMIS.
    • Routemap - (OMIS) ...OMIS • A report to establish the market for your product and to list potential buyers. • Do you really need a report? • Plans for what you will do with it. • OMIS v Commercial report. • The advantages and disadvantages of each? • There should be nothing in the report that you can ‘Google’!
    • Routemap - (Reactive: Zero Cost): • Question the board on their commitment. • How much time can be devoted to this? The falsehood of “EMEA”.... • Now consider: Product Certification, Travel, Reports, Samples, Translation, Interpreting, Couriers, Trade Fair Participation. • • • • Establish competition. Deconstruct their prices. Find possible margin, then compile the pricelist What foreign currency should you be selling in? Probably not Sterling. Make it easy for your Buyer, not just EXW Sterling! Put EXW into CIF. Consider DDP. Can you offer the product for Roubles? • PREPARE A BUDGET!
    • Routemap - The Spending Zone: Language: Translate your homepage (at least), produce a Russian brochure / leaflet, and have cards in Russian (not a UK address)... Consider how to follow up (ie not just by email, and in Russian). Consider certification Plan trips round a trade fair. Don’t just walk round it; set up meetings in advance. Visit and visit again! Minimum 4 times a year if via distributor/agent. Support your partner with trade fairs, literature, samples. Get above the Power Line. It’s all about relationships!
    • Routemap - The Spending Zone: 4-Day Moscow Trip: Return Flight UK-Russia Subsistence Taxis, UK + Russia Hotel, 3 nights, incl tax Interpreter 2-day Follow up ---------------x 4 trips / year One Multi visa One colleague trip Colleague’s single visa 2 Regional flights 16 Days UK time 4 Days Colleague’s time £ £ £ £ £ £ 200.00 300.00 240.00 900.00 400.00 400.00 £ 2,440.00 £ 9,760.00 £ 600.00 £ 1,680.00 £ 300.00 £ 500.00 ========= £12,840.00 ========= £ 2,560.00 £ 640.00 ========= £16,040.00 Other Costs: Report Couriers, samples etc Translation Professional Fees Certification (UK) Total Add other costs: TOTAL COST YR1 £3,000.00 £ 800.00 £1,500.00 £2,500.00 -------------£ 7,800.00 £9,500.00 * ======== £17,300.00 £16,040.00 ========= £ 33,340.00 *It is extremely difficult to give an average price. This is the cost, whether you use a distributor or do it yourself. Either way, you must visit the market several times per year. You sell to people, so build relationships.
    • Footprint – In Brief: • Infrastructure (office, warehouse, salesperson) • Instant. Fast entry and exit strategy • Russians, talking to Russians, in Russian, in the right time zone • Control over your Russian Business. Pricing, end-users, everything. • Increased margins for the manufacturer • Access to Russian Rouble sales • Zero bureaucracy (almost)! • Troubleshooting (currency transfers, freight routines) • Consignee Address
    • Footprint (cont’d): • No lock in period – only pay as long as it works. • Savings (interpreters, docs, fees, time) • We won’t work with your competitors. • Faster deliveries, item replacements (local suppliers etc). • Clear communication with UK Albion • Hands-Free administration of local expenses. • Management is freed up to develop other markets • Objective presence – intelligent feed, and control over products and price. Russians speaking to Russians
    • Footprint – Costs saved: Report, Couriers, Fees, Translation GOST Certification (RF) 2 Trips to Russia 8 working days not spent in Russia Your 1-year costs (£33,340.00) minus above savings Add cost of Footprint One Year: Projected over one year, total cost of: £7,200.00 £3,500.00 £4,800.00 £1,440.00 ========== £16,940.00 = £16,400.00 £20,400.00 £36,800.00 Having a Moscow office and salesman costs the exporter £3,460.00 Now consider the additional wins: 10 days gained: 10/252 working days = Russian presence = relentless prospecting: Access to internal Rouble market Margin gained by making sales direct to customers: Co. T/O + 1/25 Return + x% Return + y% 40%
    • Footprint Clients: Allen Gears, Alphatech, Arefco, Asahi Seiko, Avalon Sciences, Barwell Global, Bennet Opie, BOCM Pauls, Brand Search, Canyon Europe, CG Europe, Chelsom Lighting, Chesapeake, Coltrad, Delmatic, Esschem, Global Protein Solutions, Good Food and Wine Company, Grace Foods, Greenwood, Hart Doors, HH Print, Hubcast, IDS, Jacob White, Juratek, Katsu OY, Ken Read & Son, Kestrel Thermoplastics, Kovil OY, Linatex (Weir Group), Lucy Zodion, Lucy Switchgear, M&I Materials, MacAlpine, Marley, Miller, Montracon, Munster Simms, NJO LEDs, Owen Mumford, Powell Craft, SeaBand, Sly Filters, Smart Beauty, Spline Gauges, Tideland Signal, Titan Europe, Unison Colour, Velcro, Verder Pumps, VisiTech, White House Products
    • Some Final Thoughts: • • • • • Size doesn’t matter. Russia is for everybody, especially SME’s Russia is not usually difficult. Scary stories are the exception! Meetings may be difficult to arrange. Be patient. Use specialist help. This is not Poland, China, Europe. Not Asia, Eurasia, FSU or CIS This is Russia/ • Consider your product or service. Adaption needed? • Understand and enjoy Russia; Learn something in Russian!
    • Thank you! David Cant Albion (Overseas) Ltd +44(0)1732 783555 david@albionoverseas.com Twitter: @Albion_Overseas www.albionoverseas.com
    • Doing Business in Russia Smart Exporter – outline of the programme Isabelle Henderson International Trade Adviser Smart Exporter
    • WHAT IS SMART EXPORTER? • Smart Exporter is an international trade skills programme designed to increase exporting skills and knowledge amongst Scottish businesses • This initiative is delivered by SDI and funded by ESF • Smart Exporter services are available on a free or subsided basis to businesses and individuals across Scotland
    • EXPORT ADVISOR SUPPORT Access to support from an Experienced Export Advisor which includes: • A one to one meeting to discuss your international plans and how the Smart Exporter programme can help your business • Help with market research about the market potential for your product or service or information about your competitors • Access to free export training through workshops or online • Practical advise on how to be paid from an overseas sale to help with distributor agreements via Smart Exporter’s technical support
    • SMART EXPORTER – WHATS COMING UP Market Awareness events • Doing Business in India (31st October 2013, Edinburgh) • Access Europe 2013 (6th November 2013, Edinburgh) • Doing Business in Japan (28th November 2013, Glasgow) • Doing Business in Russia (10th December 2013, Edinburgh) • Emerging Europe 2014 (5th February 2014, Glasgow TBC) Exporting workshops - Introductory Programme (New Exporters) – Edinburgh (November 2013) Introductory Programme (New Exporters) – Glasgow (January 2014) Intermediate Programme (Inexperienced in international trade), Glasgow (Jan to March 2014) Intermediate Programme (Inexperienced in international trade), Stirling (Jan to March 2014) Future International E-commerce events and workshops to be scheduled All Smart Exporter Events: http://www.sdi.co.uk/Events.aspx
    • Doing Business in Russia Networking Break 20 min. Sign up for one to one meetings at the registration desk
    • Doing Business in Russia Breakout sessions • Opportunities and challenges in the market by sector • Product Accreditation and Certification requirements • The practicalities of doing business in Russia: Contracting & payments: reducing risk & liability
    • Doing Business in Russia Networking Lunch Followed by one to one meetings in the boardroom (see registration desk for availability and schedule)