The Russian Government has accepted a National Arctic Strategy through 2020 that identifies challenges matching Finnish competencies in offshore, maritime, and mining industries. Finpro can help seize these opportunities in Russia through their trade center network offering local expertise. Key drivers of opportunity in the Russian Arctic include oil, gas, and minerals development as well as the Northern Sea Route. Annual investments in Arctic development are planned at 5.6 billion euros through 2020. Consumer potential also exists among the higher income 2.3 million people living in the Arctic region. Examples of client needs include efficient ship repair for the Northern Sea Route, port infrastructure and navigation support, and mining equipment and technologies.

1. Arctic Match - Market
Opportunities for Finnish
Arctic Know How
in Russia

2. The Arctic Match
Russian Government has accepted
National Arctic Strategy valid until 2020.
Many challenges identified in Russian
strategy match with the Finnish
companies' competences and offering
especially in offshore, maritime and
mining industries.
Finpro helps you to seize these business
opportunities. Our trade center network
in Russia with offices in Moscow,
St. Petersburg and Murmansk offers
local expertise and connections that
ensure your successful foothold at the
Russian arctic market.
12/05/2014 © Finpro 2

3. Key Drivers of the Russian Arctic Opportunity
Main investment and development
targets related to Russian Arctic Strategy:
• Oil, gas and mineral industry
Base of Russia`s export and state
income.
• Northern Sea Route (NSR)
facilitating exports (of oil, gas and
minerals)
5/12/2014 3© Finpro
graph: Proceedings Magazine, July 2013
Shipping via NSR from Murmansk to
Japan 49% faster than via Suez canal.
Data Source: Murmansk Shipping Company

4. Financing Russian Arctic Development
Announced annual
investments into
Russian arctic
development around
5.6 billion Euros.
12/05/2014 4© Finpro
12,721,2
Around 34 Billion Euros 2014-2020
Federal and
Regional
budget
Private
investments
and loans
Source: nvpress.ru/economy/6878

5. Consumer Potential of Arctic Region
• 2,3 million consumers with higher average income in comparison
with Central Russia
– Murmansk region: average salary in 2013 ca. 808€
vs St.Peterbourg where average salary ca. 757€ 1
• These potential consumers have basic needs e.g in
- FMCG
- Clothing
- Hobby related products
- Home renovation, decoration
• Most of the goods should be suitable for arctic conditions
• ICT solutions and services required to provide all the services
announced by the RF Government
1) http://www.mojazarplata.ru/main/zarabotok/srednjaja-zarplata/2013
5/12/2014 5© Finpro

6. Russian Offshore and Maritime Industry
Value Chain is the Key to Right Clients
12/05/2014 6© Finpro
Subcontractors
to main
contractors
(many)
Main contractor,
usually one
large local
company
End customer,
often the same
as lisence
holder
Lisence holder
for oil & gaz
field
development
e.g. Rosneft,
Gazprom
• Subcontractors to main contractors and in some cases main
contractor offering turnkey solutions are in most cases the
right clients.
• Russian industry specific engineering companies and Russian
industry specific design companies are Important opinion
makers though not buyers.

7. Examples of the Client Needs at the Maritime
Market
12/05/2014 7© Finpro
Technologies and
equipment for
efficient ship repair
services along NSR
Lack of competence
in human resources
e.g. in emergency
and rescue
operations
Needs generated by
modernization of
existing ports and
building new
Search and rescue
centers, equipment,
and technologies
Energy-efficient
technologies for oil
and gas field
development
Navigation
infrastructure
for the NSR
Data centers and
telecommunication
infrastructure
Arctic ecology safety
infrastructure
Energy efficient
solutions

8. Example 1: Gas driven tankers and infrastructure
• Gas driven tankers and ice-breakers are obligatory in
Europe starting 2015. Russia is preparing for the
change.
• Russian tanker operating companies need gas
tankers and related infrastructure for example
- gas bunker bases
- new types of engines that require re-fuelling
less frequently than in 7-10 days
12/05/2014 8© Finpro

9. Example 2: Murmansk Arctic Shipyard
In April 2014 Rosneft officially announced the Arctic Shipyard
complex to be established in Murmansk starting 2014.
• The main target is to ensure efficient and up-to-date service and
maintenance work for vessels operating around artic
• The complex includes service yards ( assembling, repair,
upgrade) and construction yard ( platforms for oil rigs)
• One of the main challenges is lack of qualified personnel so the
company will put much effort in innovative and efficient
technologies
5/12/2014 9© Finpro

10. Russian Mining and Minerals Value Chain
is the Key to the Right Clients
12/05/2014 10© Finpro
Subcontractors to
main contractors
(many)
Main contractor
(usually one)
End customer
(often same as
lisence holder) or
operator of mineral
source if different
than lisence holder
Lisence holder for
mineral source
development e.g.
Eurochem,
Norilsknikel,
Phosagro, Barrick
Gold Canada
• Subcontractors to main contractors and in some cases main
contractor offering turnkey solutions are in most cases the
right clients.
• Russian industry specific engineering companies and Russian
industry specific design companies are Important opinion
makers though not buyers.

11. Examples of the Client Needs in the Mining and
Minerals Industry
12/05/2014 11© Finpro
Equipment and
technologies for
recycling ore waste
Energy-efficient
mining processes for
large mining groups
Easy and fast to
install housing
modules with low
energy-consumption
High quality service
and maintenance of
heavy machinery
Wide range of
materials and
equipment for
residential and none
residential buildings
Environment safety
know-how,
technologies and
equipment for arctic
conditions

12. Example 1: Proposed Investments in 2014
Kovdor GOK ( Eurochem)
Eurochem to invest around 90 ml. euro
• Crushing factory reconstruction
• Enriching complex reconstruction
• New mining machinery ( crushers, mills, special transport)
12/05/2014 12© Finpro

13. Example 2: Proposed Investments in 2014
Kolskaya GMK (Norilsk Nickel)
Norilsk Nickel to invest around 35 ml. euro
• Enriching plant modernization
• Development of mineral resource bases
• New purifying station for industrial waters
• Construction of crushing complexes
• Reconstruction of crushing unit ( enriching factory)
• Reconstruction of melting production
• Ecology projects
12/05/2014 13© Finpro

14. Example 3: Proposed Investments in 2014
Olcon (Severstal)
Olcon to invest around 28 ml. euro
• new conveyor system
• ore concentrate drying equipment purchase
• up-to-date factory equipment purchase
• ecology solutions
• energy-efficency
12/05/2014 14© Finpro

15. New Industry Specific Arctic Centres Offering
Know How and Co-operation Potential
Krylov Research and Scientific Institute in St. Peterbourg:
• Arctic shipbuilding, engineering and design
• Voluntary certification of materials and technologies for Russian Arctic
Marine Fleet Central Institute in St. Peterbourg:
• Arctic shipbuiding, engineering and design
• Infrastructure solutions for the Arctic
Training center at Transas company in St. Peterbourg:
• Simulation training for Arctic conditions
• Software solutions for Russian oil and gas industry
Rosneft & ExxonMobil in Moscow, St. Peterbourg, Murmansk:
• Research and development of technologies for Arctic operations
• Training center
Arctic shipyard in Murmansk (in progress):
• Proposed base for construction of Arctic fleet
12/05/2014 15© Finpro

16. Krylov Arctic Center – Possible Information
Channel of Finnish Offering
”… by the way, last year (2013) was unsuccessful
regarding investments budget – from allocated 4.5 bl.
rubles(ca. 90 ml. euro), we managed to spend only 3.5 bl.
rubles ( ca. 70 ml. euro)”
General Director, Igor Melik-Gaikasov, interview to Kovdorgok.ru, 29.01.2014
• There is a significant lack of knowledge of Finnish solutions in
Russia. In many cases Russian companies lack information and
contacts of Finnish suppliers.
• Krylov Arctic Center has suggested Finpro to establish a working
group which can provide data and information both for Russian
and Finnish companies.
– This might be a channel for Finnish SMEs to promote their
offering in Russia
12/05/2014 16© Finpro

17. Miilux Abrasion Resistant Steel Centre
provides services to the metal, mining
and rock industries as well as
earthwork and mechanical
engineering companies in Finland and
abroad. Company participated in
Human Protection and Search &
Rescue Technologies (SAR) Finland
Export Partner Group. Pekka Miilukangas, Managing Director,
Miilux
Finpro’s export partner group
succeeded just perfect for us and
we have been able to reach our
targets. Already during the second
year of export partner group, we
have signed some export deals.
So far we have achieved export
sales worth of nearly 1 million
euros from Russia.

18. Miilux is a family business belonging to the Miilukangas Group.
Miilux Abrasion Resistant Steel Centre provides services to the
metal, mining and rock industries as well as earthwork and
mechanical engineering companies in Finland and abroad.
Miilux was established in 2000 and its annual hardening
capacity is 32,000 tons per year. Miilux has approximately 45
employees and its turnover in 2011 was about 19.3 million
euros.
Miilux wanted to grow their business and find new export
markets abroad. Company also needed to strengthen its
presence in existing scattered markets. Miilux decided to
participate in Finpro’s export partner group, which consisted of
Finnish SME’s manufacturing products for Human Protection
and SAR Technologies. Export partner group started its
operations in 2010 and at present has its third operation year.

19. Target country for the export partner group was specified to
Russia. The operations in the export partner group started with
market research phase during which the clientele, competitive
situation, local manufacturing and required certificates were
analyzed. This was followed by Miilux business visits in Russia
after which the company received the first requests for
quotations.
As a result of export partner group Miilux has achieved export
sales of nearly 1 million euros from Russia in 2011 and 2012.
Company has recognized business opportunities and
established its presence in new markets. Already during the
second year of export partner group Miilux signed the first
export deals. Cooperation with Miilux continues in countries
worldwide in which growth customers have been identified.

20. EU-rahoitus, Horisontti 2020,
pk-instrumentti
Kasvun pohjustaminen
TEM/ELY- keskus: kehittämispalvelu, 1200 €/pv, tuki 75 %
Tekes: Kansainvälisen kasvun suunnittelu
• Alle 6-vuotias pieni yritys, tuki max. 75 %
• Yli 6-vuotias kasvuyritys, tuki max. 50 %
Valmiuksien kehittäminen
ELY-keskus: yhteishankintakoulutus, tuki max. 70 %
Tekes: Organisaation, prosessin ja johtamisen kehitys, tuki max.50 %
Tutkimus ja kehitys Tekes: Tutkimus ja kehitys, max. 50 %, laina max. 70%
Kansainvälisen kasvun
suunnittelu ja aloitus
ELY-keskus: kehittämisavustus (1.7.2014 alkaen), tuki max. 50 %
TEM: vientiverkosto 1-3 v, yritysten lukumäärä 4-6, tuki 0-65 %
Finnvera/UM: avustus pk-yritysten kv. hankkeisiin Venäjällä, tuki 50 %
Finnpartnership: liikekumppanuustuki, tuki 50-70 % pk-yritykset,
isot yritykset 30-50 %
Finnvera: takuut ja lainatKasvun ja viennin
rahoittaminen
Tavoite Top 5 joukossa Euroopassa, valmisteluvaihe I tuki 100 %,
vaihe II tuki 87,5 %
Finnfund: osakepääomasijoituksia, investointilainoja, takauksia, jne.
1,2
2
1,2
1,2
1,2
1,2
1,2
1,2
1 palkka- ja
2 matkakuluja
Julkiset rahoitusinstrumentit kansainvälisen
liiketoiminnan rakentamiseen

21. Follow us on social
media and visit our
website www.finpro.fi