non-financial development institution
major organizer of congress and exhibition events
Welcome!
Восстановление пароля
Введите адрес электронной почты или телефон, указанные при регистрации. Вам будет отправлена инструкция по восстановлению пароля.
Некорректный формат электронной почты или телефона
Russia: New Production Hub
25 January 2018
11:00
KEY CONCLUSIONS
Investors are interested in the development of production in Russia

“We are confident that Russia has a great potential in the manufacturing sector,” — Hemant Kanoria, Chairman, Srei Infrastructure Finance Limited .

“Russia is already able to conceive new products, when the Russian technology uses available production facilities in China and then exports products worldwide. There is a number of such projects already implemented,” — Andrey Kuzyaev, President, ER-Telecom Holding .

“We see a significant growth of labour productivity, and this makes our operations so much more effective. Compare these figures with those of 20 years ago: we need far less labour, and given the volume of investments, we already see a good return. Now we hire five times less people than twenty years ago, and productivity still goes up,” — Dmitry Konov, Chairman of the Board of PAO SIBUR Holding.

“We can do a lot and much better in such big markets as Russia if nothing stands in the way, if we look for opportunities, if we decide that we want transparency. We stand for a transparent world. This is the position of the Russian government and the European authorities,” — Heinz Haller, Executive Vice-President and President of Dow Europe, Middle East and Africa, The Dow Chemical Company.

Stable investment climate determines the prospects for the development of industry

“Adequate rouble stability is the result of the system we have set up several years ago: on the one hand we are addressing inflation, trying to stabilize it, on the other, we have suitable tax and financial leverage that would allow us to negate oil prices reliance. The recent and current reforms set the conditions for long-term stability. In turn, stability is essential for producers, especially if Russia is in the middle of the production chain. A stable exchange rate allows for predictable profitability and return on investment,” — Maxim Oreshkin, Minister of Economic Development of the Russian Federation.

“Now we are negotiating the vaccines know-how with the Russian government. It is a very complex biological production; there are only five vaccine manufacturers in the world. It is a complicated business that requires high investments. The Russian government needs to consider a system of long-term obligations in order to enter this business. If you want us to invest hundreds of millions of dollars, you need to guarantee us stability and confidence that we will get our returns on investments,” — Yossi BenAmram, President, Europe, Russia, Africa and Middle East (EURAM), MSD.

Sanctions have a significant impact on the development of production in Russia

“Sanctions restrict the import of technologies due to the political situation. Not all global companies want to bring their technologies here. This is a matter largely related to the information technology. We actively work with Chinese and Korean partners, who bring new technologies. Some areas are better than others, for example offshore oil production,” — Maxim Oreshkin, Minister of Economic Development of the Russian Federation.

“Import substitution is one of the ways to respond to sanctions,” — Maxim Oreshkin, Minister of Economic Development of the Russian Federation.

“The political image of Russia is a difficult issue; looking at economic opportunities we see various barriers, not the potential. It seems to me that it will remain so for the next few years,” — Heinz Haller, Executive Vice-President and President of Dow Europe, Middle East and Africa, The Dow Chemical Company.

“The last few years have been turbulent, primarily on the political arena, which in turn has affected the economy. But those companies that invested back then are now reaping the fruits of those decisions. And these results are good: looking at the statistics, we see a number of major deals and the improvement of the investment climate. We see the growth of foreign direct investment,” — Maxim Oreshkin, Minister of Economic Development of the Russian Federation.

ISSUES
Complexity and terms of administrative procedures

“We know the healthcare challenges. We need to bring products to the market faster. Registration of a new medication for the Russian market takes up to 18 months. In Singapore and Israel this takes half the time. All this depends solely on the Russian government. Before we introduce a new medicine to the market, we certify it and we cannot start the next step before completing the previous one. You can easily remedy the situation by allowing companies to go ahead with the next steps simultaneously with the process of certification. This would considerably shorten the period and facilitate bringing new innovative medicine to the Russian market,” — Yossi BenAmram, President, Europe, Russia, Africa and Middle East (EURAM), MSD.

The system of stimulating investment in manufacturing industries in Russia does not meet the market requirements

“Looking forward into the future, we need to ask ourselves the question ‘Are these [governmental measures] sufficient? Or the Russian market could receive more investment?’” — Heinz Haller, Executive Vice-President and President of Dow Europe, Middle East and Africa, The Dow Chemical Company.

“There will be a huge time-lag before Russia has the production capacity similar to those in other countries. The incentives we create to bring production to Russia have only been effective for the last 5–7 years. Looking at the situation today, the investments in the Russian economy are not justified, since the domestic market is relatively small. One cannot take a link of the production chain and set it up in one place, one needs to think strategically,” — Dmitry Konov, Chairman of the Board of PAO SIBUR Holding.

“Let’s not worry about the legislation gaps that may appear, through which some would pay less taxes. Let’s engineer a growth environment first, and then we can start clipping,” — Andrey Kuzyaev, President, ER-Telecom Holding .

“The pharmaceutical industry is a sensitive matter. There are some deep issues aside from certification. We negotiate with manufacturers. We hope to find solutions that one the one hand shall not harm consumers, and on the other, would welcome new production capacities,” — Maxim Oreshkin, Minister of Economic Development of the Russian Federation.

“Since Russia wants to achieve serious, ambitious goals in healthcare the state is now taking some extreme measures. The solution here is a direct open dialogue. This is what needs to be done in order to find solutions that, on the one hand, will protect intellectual property rights, and will ensure accessibility on the other,” — Yossi BenAmram, President, Europe, Russia, Africa and Middle East (EURAM), MSD.

SOLUTIONS
Russia’s participation in global value chains

“Russia is a diverse country. Practically every industry here has a place where it belongs. We can join the global production chain, and this is a way to go,” — Maxim Oreshkin, Minister of Economic Development of the Russian Federation.

“We are looking to establish strong production bases for Russian companies in India, which would capitalize on the Indian market. We want to do the same thing here in Russia for Indian companies. Russia has a lot of technology, strong human potential. This is the way we can set up a highly effective production partnership,” — Hemant Kanoria, Chairman, Srei Infrastructure Finance Limited .

Russia’s active participation in the Eurasian process

“[Russia] should be proactive, lead the Eurasian process. So far we do not see this,” — Yossi BenAmram, President, Europe, Russia, Africa and Middle East (EURAM), MSD.

Russia’s active participation in the international agenda

“Russia, like many other countries is underactive on the international arena and in exports. This is something to work on. We see Russia as a market with a huge potential. Figuratively speaking, this is a well that is full of new under utilized and under implemented technologies,” — Heinz Haller, Executive Vice-President and President of Dow Europe, Middle East and Africa, The Dow Chemical Company.

Development of new technologies in the country

“Russia has a chance to become one of the technological centres of the world. We have a new generation of citizens. They are young, ambitious entrepreneurs capable of creating something big, global. There are not that many of them, but they do emerge, with new products, pursuing growth and development on a global scale,” — Andrey Kuzyaev, President, ER-Telecom Holding .

“The development of technology in Russia has a great potential. Many innovative, progressively thinking people live here. They are capable of developing breakthrough technologies. Undoubtedly, the Russian government can and should help these people develop and fix them up with amazing R&D companies,” — Heinz Haller, Executive Vice-President and President of Dow Europe, Middle East and Africa, The Dow Chemical Company.

Development of human capital to fit the current production requirements

“The educational system should face the market demand as it shifts. Now we really need IT specialists, not only chemists. This is a totally different education; they have a completely new set of skills. In many cases today, the Russian educational system is not ready to meet these requirements,” — Dmitry Konov, Chairman of the Board of PAO SIBUR Holding.

“We are striving to improve the quality of life. This should appeal to foreign work force, as well to our own human resources potential to stay and work in the country,” — Maxim Oreshkin, Minister of Economic Development of the Russian Federation.

“We must secure a new generation of Russian scientists, entrepreneurs and IT specialists to stay and earn money here,” — Andrey Kuzyaev, President, ER-Telecom Holding .

“The investment principle will be completely different: one should not expect a boost in jobs through expanding capacities. Here is a new approach: often investments do not lead to hiring and providing employment for [more] people. We need different people. Now we need IT specialists, not chemists,” — Dmitry Konov, Chairman of the Board of PAO SIBUR Holding.

“Much has been said about the human and educational potential, but we would be better off asking how this translates into practice. Does Russia actually have a chance with its new technologies’ (digital economy and telecom) share of 3.5% in GDP to catch up with or at least be comparable with the share of natural resources supply and energy production,” — Andrey Kuzyaev, President, ER-Telecom Holding .

“Much is said about money, financing. Access to the capital is much less of a problem than actually setting up a production in Russia. It is much more complicated. The issue is lack of managerial skills, lack of specialists who would be able to manage assets. A whole series of problems. Sometimes the project simply stagnates in the middle, while the problem is not the money. Management is as significant as financing,” — Dmitry Konov, Chairman of the Board of PAO SIBUR Holding.

“Productivity is a far more pressing issue for the state. It seeks to educate people for new industries,” — Dmitry Konov, Chairman of the Board of PAO SIBUR Holding.