Translation Industry in Russia
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Translation Industry in Russia

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  • 114 LSPs participated
  • Currently no change to selected markets, LSPs expect gradual increase in service volumes over 3-7 years.
  • Very active forums for industry pros. Discussions on pricing, tenders, technology, blacklist clients and providers. International consultants well-familiar with Russian companies, ceos and practices. Not a terra incognita anymore.
  • Also in the news: Sochi 2014 winter Olympics project, ABBYY Skolkovo grants
  • According to CSA, average Eu LSP is around 8 mil USD annual revenue. Largest RU lsps – average in Eu. But we pay less tax. Business start – retail vs localization teams.Localization teams & retailers – two basic paths of RU LSP evolution  2009 – Janus = 7,15 млн, EGO - 6 млн. долларов.
  • E
  • Pioneers: MLV subcontractors and notaries
  • Local market leaders believe that foreign MLVs make vastly more than them. MLV reps I’ve talked to disagree on that point. LISA estimates put global MLV presence in the bracket of $50-150 mln pre-crisis. (7% of revenues come from Russia, 50% of which is spent on sourcing). With 2010 CSA figures for leading MLVs that lands us with $30-100 mln.
  • Oil&Gas, metallurgy s etc (raw materials) = most LSPs have some of it in portfolio. The territory is divided, but new projects pop up from time to time. Target foreign subcontractors and technology providers for mining operations.
  • Medical (pharmaceuticals, equipment, life science) – lower level of regulation encourages importers. Pharma 2020 strategy: boost exports * 8 times current level, increase domestic pharmaceutical production share to 50%, replace imports with own productsPharma 2020 $6 billion into training, research, conformity with GMP standardState/Private corporations involved: Rosnanotech, Rostekhnologii, Russian venture company, Vnesheconombank.Currently national producers have only 20% sharePharma market steroid growth 26%, currently @$15 bnForeign brands dominate every area, esp generic meds
  • Renova (Rossiyskiekommunalnyesistemy), Alpha Group = water supply. Sewers, wells, engineering = national-wide “Clear water” investment program in development.The state outsources community services to privateSpecial economic zones: Togliatti, Lipetsk, (on-site interpreting, general business, technical)
  • Local legal entity rqLarger deals with foreign companies require prohibiting amounts of additional paperwork that can discourage your client or cost you extra (MemoQ story). High processing commissions. Most midlevel or greater RU LSPs have several legal entities, including company(es) abroad. Administrative accounting and financial accounting are two separate processes, often only vaguely connected.Despite considerable efforts to improve the situation, a large part of LSP economy remains in the shadow. Many freelance translators tend to operate without any kind of legal basis, and pay no taxes, even when the taxes are 6% of revenue. Attempts to manage accounting for freelancers and to pay taxes for them increase the cost of translation high above competition. That’s why most LSPs do double book-keeping: one version for themselves, the other for the tax office. (Roidinititiative)Local salespeople are importantThat is true of any market, however in Russia it is a part of the culture to conduct business on an eye to eye basis. Less so with IT sector (because the geeks are homogenious), more with older generation, in their 40es or so. GlagolLSP case

Translation Industry in Russia Translation Industry in Russia Presentation Transcript

  • by Konstantin Dranch kvdranch@gmail.comLanguage Industryin Russia
  • Source: Common Sense Advisory Russian LSPs annual increase in revenue 2009 – 38.5% 2010 - 58%presented @TFR2011 > Trumps > Global market growth rate of 7.4% GDP 2011 Source: CIA World Factbook 4.3% 1.1%Gree.. owth is Good 2.7% 1.8% 0.8%
  • But higher tier contracts are under pressure. 2010 2011 RU Inflation RU inflation (services) 8.1% (services) 8.7%Rates climbed in 2011 Source: mozgorilla.com View slide
  • Metal Cars 5-10% export over 7 years; duty 10% Trucks 10-20% cut over 3 yearsOil & Gas =no change Cultivators 5-10% Pork – Planes – 15% 7,5% - within the 12,5% over quota; 7 years Dairy – 5%; Wine – 7,5% Mobile Cigarettes phones 30% 5% Pharma – 5-7,5% WTO deal highlights Source: Kommersant.ru View slide
  • Maturity through infoexchange
  • 1. Gov. spending up in public tendersOpportunities 2. Entry to WTO to boost imports over 3+ years 3. Rates go up, taxes still comparatively low 4. Market matures (in its teens atm) 5. More Ru LSPs looking for anchors in the EU 6. MT raises its ugly headChallenges 7. Enterprises recover after Putin’s reelection 8. Business costs to grow (legality pressure) The Wind is Favorable mostly
  • RU market size:  LISA: 2008 = $250-300 mln, growing 15%  CSA: 2009 = 540 mln, 2011 Eastern Europe = $900 mln (2.84% of $31.4 bn global market)  Local LSP estimates for 2011: conservative $200, optimistic $400 mlnRussia has a lot catchingup to do
  • The competition { Who makes money in translation. And how?
  • CSA list 2011 report, 2010 data: Military, aviation ABBYY LS - $9.3 mln ($9.8 mln) Not listed by CSA (2011 data) powerful software mother company, strong gov. presence  Translink - $8 mln Logrus Group – $9.2 mln ($10.5 mln) gov., military localization pioneer, famous for MS Windows project, currently  Transtech – 10+ mln (estimate) has substantial US operations military, technical, EGO spin-off Janus Worldwide – $8.19 mln  Megatext - $3 mln Enterprise-scale localization, started with SAP Neotech-affiliate retail chain localization, currently Sochi-2014 Winter Olympics official provider  Traktat - $3.5 mln EGO Translating – $7.82 mln ($10 mln) Strong retail chain complements b2b Established before competition, strong domestic market (St.  TLS - $3-5 mln (estimate) Pete), early sales team  ROID - $3.5-4. mln (estimate) Neotech – $5.55 mln Early enterprise-scale technical translations (including  AKM Translations - $2.7 mln oil&gas, automotive)  Exprimo – $2.1 mln Palex – $2.39 mln ($2,85 mln)  Rperevod - $2 mln Large-scale projects for Samsung and Xerox  Mark business translations AG.Translate – $2.43 mln and others..National Market Leaders
  • Life outside St. Petersburg and Moscow? Alpha Centauri Mars { St.Pete Moscow Regional leadersThe Millionniki, 10 more hubs above 1 million inhabitants, house well-established LSPs withstrong local ties and average revenues around $1-1.5 mln, staffing 20-40 employees.Examples: All Correct (39), Prima Vista (27), Avanta Translating (23), Aum (32)
  • ABBYY $9,32 mln / 83 emp = $122 k Logrus $9,2 mln / 150 emp = $61k Janus $8,19 mln / 136 = $60k EGO $7,82 mln / 178 = $43k Neotech 5,55 / 112 = $50k ($57 w/ Megatext) Translink $8 / 123 = $65k Palex $2,85 / 63 = $45k AKM Translations $2,7 / 35 = $77kRevenues per employee
  • Mark BT Star Spb Nothing Neotech new?Fonetix Bust! goes Logrus the economy EGO Janus 2006 2008 2008 2010 2012 Palex MTA RTC 1988 1990 1992 1994 1996 ROID Translink AG Translate Wild East TLS Years Trans-tech 1998 2000 2002 2004 AKM Traktat ABBYY LS Timeline Source: translationrating.ru
  •  Sum total of identified market leader revenues in the list above – under $100 mln  CSA & LISA estimates at $540 and $300 mlnHuh? Where is the money?
  •  Global MLV presence unaccounted: Lionbridge, SDL, Masterword, Star Group, WeLocalize, Translation.com, Merril Brink.  Specialized and subcontractor agencies not part of active community. Examples: Multilize, Techinput, etc.  More players: web search returns 1000+ LSP websites, and don’t discount the freelancers.  Large in-house translation departments in major companies (salaries are low, outsourcers expensive).Invisible competition
  • 1. Primary exports: Oil & Gas, Metals 2. Infrastructure: Energy, Chemical Industry, Industrial Equipment, Road & Rail 3. Medical & Life Science 4. Government & Public Sector maybe 5. Localization 6. Also in the news: On-site interpretingAttractive Sectors based on LSP CEOs’ opinions
  • Oil & Gas – highlights Photo: Sakhalin energy
  • Medical - highlights Photo: nnm.ru
  • Infrastructure - highlights Photo: samaralife.com
  • Since 2009 all translations for state bodies must besourced via tenders.They overdo it:If all contractors are allowed to participate pricesdeteriorate to 0.025 cents/word.Often at the expense of quality.The better priced tenders are NOT transparent!The Trouble with Tenders
  • Russian is spoken in: Azerbaijan, Belarus, Estonia, Kazakhstan, Kyr gyzstan, Latvia, Lithuania, Moldova, Russia, U kraine, and Uzbekistan.expansion:Russia is an entry point tomore markets
  • “Russia is one of the top-10 markets for us... closer to the 2nd part of top-10”. Istvan Lengyel, KilgrayBarriers Local legal entity required; { Administrative and financial accounting have never met each other; To sell well locally you need to enter the markets less transparent.
  • Realistic prices:  Minimal 350 RUR per page 0.046c per word  Average 650 RUR per page 0.085c per word 0.118c per word  High quality 900 RUR per pageLSP Rates
  • Where to start?
  • Telesales & CRM dataRating Agency Expert - Top 400 earners For the links, pleasehttp://www.raexpert.ru/ratings/expert400/2011/table1/ download myForbes 200 non-publicly traded presentationhttp://www.forbes.ru/rating/ekonomika-package/kompanii/73640-krupneishie-nepublichnye- kvdranch@gmail.comkompanii#pages-1
  • Staff translator average salaries by region • Moscow GMT+4 1100 eur Source: rabota.yandex.ru • St. Petersburg GMT+4 700 eur • Ufa GMT+6 580 eur • Nizhniy Novgorod GMT+4 550 eur • Voronezh GMT+4 420 eur • Kiev GMT+3 380 eur • Minsk GMT+3 372 eurVendor management 101
  • M&A market not developed.  2008. Renova holding bought PROMT  2007-2011. ABBYY + perevedem.ru  2010. Traktat + AGI TripleAcquiring a local LSP?
  • Social networking on: facebook.com, livejournal.com, vk.com Forums: trworkshop.net, facebook.com/msk.tfr Industry news portal: mozgorilla.comThe community
  • translationrating.ruSolid data on Russian language agencies, plus a ranking based on LSP votes.
  • For first-hand experience visit Translation Forum Russia 2012Kazan, 28-30 September. Tconference.ru +421(917)785569 kvdranch@gmail.com @constanch
  •  Common Sense Advisory: Language Services Market 2011  LISA: Globalization Services in Russia 2008 report  Libor Safar & Katerina Gasova: Cracking the Russian Market 2009 (Multilingual)  Nataly Kelly: Translation business rises in Eastern Europe 2009 (Multilingual) Interviews: ABBYY LS, AKM Translations, All Correct LS, Dialect City, EGO Translating, Janus, Kilgray, Logrus Group, Neotech, Russian Translation Company, TLS Service, Traktat, Translink, XTRFSources & Further reading