Economy

A British Prince Michael of Kent will launch a new enterprise in Russia

Russia Talk, the British-Russian business forum

On October, 26, 2016 the Chamber of Commerce and industry (CCI) of the Russian Federation hosted the Russian-British investment forum Russia Talk. The main topic of the event was the future of the Russian-British trade and economic relations. In 2015, the investors from Western Europe have funded 106 projects in Russia, and the figure has been the highest since 2005 (+77%). At the Moscow forum, the head of the CCI of Russia, Sergey Katyrin, highlighted the areas of cooperation, the development of which, in his opinion, will improve the bilateral relations.

The priorities for the Russian-British cooperation are the following:

  • Exchange of economic information. In this direction, a business portal Business-ProjectsIn Russia.com ahs been launched with the participation of the London representative office of CCI RF.
  • Development of regional cooperation. The head of the Russian organization invited the British companies to develop their activities in the regions of Russia. Today, this process already involves the Tomsk region and Perm territory. Moscow, St.-Petersburg and Tatarstan have been successfully cooperating with the British business.
  • Investment. According to Ernst & Young, the West European countries stay the largest foreign investors in the Russian economy. The foreign direct investment in the industries of Russia increased by 80%, and in 2015, 171 such a project was funded.

In the sphere of attracting investments into the Russian Federation, the Chamber of Commerce is actively engaged in the search for and promotion of the regional investment projects. The organization has developed a procedure, through which the Western investors are offered the only projects that were explored and passed the expert examination.

According to the Royal Prince Michael of Kent, who participated in the forum, Brexit and the depreciation of the pound sterling will also contribute to the development of cooperation between the countries. The representative of the Royal Household has also arrived in Russia to open a new British enterprise. A production and administrative complex of “Lonmadi” JSC has been launched in the village of Yelino of the Solnechnogorsk district. The company will be engaged in the repair, maintenance, sales and assembly of road construction equipment produced by the British company JCB.

Today, Russia takes the 40th place in world Bank’s Doing Business ranking, whereas it was on the 51th place in the past year. According to experts, the rating can be improved – it needs to simplify the procedure for obtaining of the construction permits and reduce the term for the VAT refund for entrepreneurs operating in Russia, as well as to reduce the customs export and import barriers.

In addition to organizational problems, the problems of prejudice stand in the way of improving the Russian-British relations: a negative image of Russia that has been built in Europe, prevents the British companies from cooperating with the Russian companies. In particular, the British businessmen said that after coming to Russia, their perception of the country changed radically.

“E Vesti” asked the President of the Chamber of Commerce and Industry of the Russian Federation, Sergey Katyrin, a few questions on how the Russian-British relations go on.

EV: IN what areas today, the British are investing in Russia? Could You give a specific example projects?

Sergey Katyrin: It is not possible to talk about all the European investments in Russia as they are huge. The investments involve all areas. Of course, the large accumulated investments have concentrated on raw materials, the energy industry, that was the first area of investment. The following British companies actively work in our market: Unilever plc, GlaxoSmithKline plc, AstraZeneca PLC, Highland Gold Mining Ltd, RoyalDutchShell, British Petroleum. The main fields of their activities are the oil and gas sector (including participation in the projects “Sakhalin-2” “Sakhalin-4”, “Sakhalin-5”), geological exploration, mining, pharmaceutical industry and medicine. The companies are also engaged in FMCG (food products – mayonnaise, tea, products under the brand Knorr), as well as balms, gels, shampoos, etc. Currently, about 40 major projects are in the process of implementation. A significant part of them started 2-3 years ago. The latest project was finished by an English company Metaco LLP, which completed the construction and equipping of a surgical unit, perinatal center and three dialysis centers in the Lipetsk region. The volume of investments was about 200 million rubles. The project was successfully completed in 2016.

EV: In Your opinion, why do the British companies invest in these projects?

Sergey Katyrin: The business invests in the projects that generate revenue and it concerns those areas it specializes in. Russia is no exception. Of course, the country (the regions) can provide some incentives to attract business to those areas that the country (region) needs.

EV: The activity of the representative office of RF CCI in London, is it successful? What is the attitude to the initiatives of the Russian organization?

Sergey Katyrin: The activities of the representative office of CCI RF are successfull. It is so even today, when, as we know, there is some remarkable political and economic turbulence in our relations with Europe. Traditionally, the representation in the UK is called the representation of CCI of Russia in the Russo-British Chamber of Commerce.

Through its representative office in RBCC, CCI of Russia is involved in almost all regional business conferences and seminars conducted in the UK, which concern the economic cooperation with Russia, which allows to target the Russian business in England, and the English – on the opportunities and prospects in Russia.

Today, a special emphasis is made on regional cooperation, which is understandable: it is necessary to develop business not only in Moscow and the Northern capital, but also in other regions. On behalf of the Chamber, the representative office actively works with the businesses of Liverpool, Midlands, the cities of Scotland, and Northern Ireland. By the way, the new Russian territories are also involed in the process. In early October, with the assistance of the Ural Chamber of Commerce the meetings between the British and the Russian businessmen took plave in Yekaterinburg. In November, there will be a British business mission in Cherepovets. This is the way the rapport is established that would later lead to contracts. Through its representative office, the Chamber is also looking for investors for specific projects in Russia. The organization of the videoconferences between the Russian regions and British companies are being discussed, and they are likely to happen.