Team Finland: Luoteis-Venäjän teollisuuspuistojen esittelytilaisuus Pietarissa 23.4.2014 презентация индустриальных парков в Санкт-Петербурге 23.4.2014

1. Localization in Russia
Timo Koivumäki
St. Petersburg
23.04.2014
Business Park Vyborg

2. Company
• Finnish mother company Business Park Vyborg Ltd,
Russian daughter ZAO Business Park Vyborg
• Assists foreign manufacturing companies to establish
in North West Russia
• A service based concept covering full range from
planning and budgeting through ramp up of full
production
• Based on 19 years experience about production in
Russia

3. What is an industrial
business park?
• A combination of infrastructure and services enabling
ease of planning, establishing, operating and
relocating production
• Networking platform for resource optimization,
knowledge and experience exchange, improved
problem solving etc.
• Your best support and specialist through the process
from decision making to launch

4. Opening in Russia;
Issues to consider
• Problems appear back home, not in Russia
• Russian operations drive the time frame and schedule,
key people are away from domestic operation
• Russians do not intend to become ”Finns”
• Must to find Russian partners/employees whom is
possible to trust to

5. Hints for establishing
• Structures are not an issue
• Premises are an issue, but not limitation
• Focus on people, knowledge and culture
• Emphasis on middle management training
• Make sure you know the law and order
• Ensure all documentation to be properly in place
• Customers know local business, ask for start up support
• Networking helps problem solving
• Alliances for cost saving

6. Issues in setting up
industrial operation
• Choosing location
• Time from decision to start
• Permits, inspections and authority clearances
• Recruiting/Staffing
• Middle management
• “Asian” mentality

7. Cost drivers
• High property prices / rental fees
– Taxation value / market price
• Local banking terms
– High interest, short payback times
• Relatively low salary level
– Huge variation between regions
• Accounting and taxation bureaucracy
– 3 or 4 times more staff than in Nordics

8. Shortly available premises,
examples
• 1152 m² (2nd fl, access from street level, May 2014)
• 360 m² (1st fl, access from street level, May 2014)
• 864 m² (1st fl, access from street level, late 2014)
• Max floor load 1500 kgs/m²,
• Free height 4,7 m. (max height 5,1 m, partly 9,6 m possible)
• Rental fee 5-7 eur/m²/month
• Electricity approx. 5 rbl / kWh
• Capacity up to 150 kWh (nominal input max x 2)
• Each added kW 60.000 rbl
• Water and sewage 80 rbl /m²

9. Service fees, examples
• Company registration in St Petersburg / Leningrad
Region EUR 850
– Minimum share capital
– Standard charter
• Budgeting and planning consultation EUR 115 / h
• Permitting and authority support EUR 65 / h

10. Twin hub model
Kouvola / Imatra Logistics Hubs Vyborg business park
Capital
Information
Material
Admin practices
BORDER CROSSING
DistributionSourcing

11. Service structure
• Business Park Vyborg provides production support
services
• Premises are provided by property developer, but a
sublease arrangement via Business park Vyborg is
possible depending on agreement model

12. Services
• Planning phase services
• Start up phase services
• Running phase local services
• Running phase trans-border services
• Exit phase services

13. Examples of available services
• Planning phase services
– Market studies trial sales
– Operations planning & budgeting
– Start up planning and budgeting
• Start up phase services
– Site reconstruction
– Recruitment
– Personnel background surveys
– Data systems development
– Permissions acquisition
– Equipment import and installation

14. Examples of available services
• Running phase trans-border services
– Warehousing (Finland)
– Customs clearance services
– Transport services
• Exit phase services revenues and cost
– Premises vacation and equipment relocation
– Employment termination and personnel relocation
– Permissions and responsibilities transfers
– Logistics and customs clearance transfer

15. Examples of available services
• Running phase local services
– Authority clearance
– Staffing
– Local maintenance
– Small purchases
– Personnel transport
– Canteen
– Back office
– Security services
– Forwarding and transport services
– Company health care
– Waste removal

16. Production premises standard sample

17. Business Park Vyborg plan

18. Timo Koivumäki
Managing Director
Tapiontori 1, 10th fl.
FI-02100 HELSINKI
timo.koivumaki@businessparkvyborg.com
Mobile +358 40 524 4411