AEB Business Quarterly

Association of European Businesses

Quality Information • Eff ective Lobbying • Valuable Networking Summer 2012

TheThe ReturnReturn ofof Russia’sRussia’s AutoAuto IndustryIndustry

A look at Russia’s Automobile, Automotive components and Commercial Vehicles Sectors:

Q&A with Aleksey Rahmanov, Deputy Minister of Industry and Trade Promotion of energy effi cient products Russia’s commercial vehicles market in 2012 Russia’s commercial vehicles market in 2012 AEB Networking ... and more

CEO Letter 1

Dear Readers,

Welcome to the Summer edition of the AEB Business Quarterly. Th is year, in view of the Mos- cow International Automobile Salon 2012 (MIAS 2012) the AEB Business Quarterly once again focuses on Russia’s automobile, automotive components and commercial vehicles sectors. MIAS 2012 will be held from August 31st to September 9th, with the 30th of August being the business day. With a record output in production and a 40% increase in year-on-year sales, the automotive industry, in 2011, witnessed considerable growth, triggered by a strong market recovery, which in turn led to increased demand on the part of the consumers, as well as credit availability and govern- ment incentives. An amendment to the Russian Federation industrial assembly legislation led to a consolidation of the original equipment manufacturer (OEM) sector and subsequently, signifi cant major alliances of those operating in this sphere. May, 2012 saw the sales of new cars and light com- mercial vehicles in Russia increase by 11% in comparison to the same period in 2011. Th e fi rst half of 2012 saw the percentage sales of new cars and light commercial vehicles in Russia increase by 15%, in comparison to the same period in 2011 or by 151,946 more sold units. Russia accession to the World Trade Organisation (WTO) will most likely have a considerable impact. Already a member of the International Monetary Fund and the World Bank, once fi nal, Russia’s membership in the WTO will bring the country into the system of multilateral economic organisations. According to a World Bank study, in the medium term, WTO accession would increase Russia’s gross domestic product (GDP) by 3.3% and, in the longer term, would increase it by 11%. Th e study con- cluded that to a large extent, this will be as a result of measures Russia would take to liberalise foreign investment in services. An important consequence of Russia’s accession to the WTO will be a considerable reduction, from 2012 to 2018, in the customs duties on vehicles and this may lead to a certain shift in the demand structure in favour of foreign vehicles; thereby, increasing their share in the overall sales. Th e AEB looks forward to the opportunities that Russia’s accession to the WTO will bring to the European companies in Russia, foreign investment and the EU-Russia relations as a whole. Th is edition of the AEB Business Quarterly features interviews given by Aleksey Rahmanov, Deputy Minister of Industry and Trade of the Russian Federation and the new Chairman of the AEB Automobile Manufacturers committee Joerg M. Sch- reiber, President and Managing Director, Mazda Motor Rus LLC. Th is issue also features articles from leading experts in the automotive, auto components and commercial vehicles sectors in Russia – Alexander Breigin, Country coordinator DuPont Performance Polymers, CIS, DuPont Science and Technologies LLC, Ivan Bonchev, Investment Director, SI Capital Partners, Andrey Chursin, Chairman of the AEB CVC and Commercial Director, Scania-Rus LLC…and more. As always, you will fi nd updates on past AEB events and committees’ activities. I would also like to take this opportunity to invite you all to our annual cocktail, organised to mark the opening of the autumn business season. Th e AEB annual autumn cocktail will take place on the 3rd of September at the Radisson Royal Hotel, Moscow. Please visit our website: www.aebrus.ru in order to register for this event. As the hot summer draws to a close and autumn comes knocking on our doorstep, we hope that the new business season will bring many more opportunities to all our member companies. Th erefore, on a fi nal note, permit me to wish each and everyone of you the very best in the fourth quarter of 2012.

Yours sincerely,

Dr. Frank Schauff Chief Executive Offi cer Th e Association of European Businesses

AEB SPONSORS 2012

1C:BIT • Allianz IJSC • Alstom • Bank Credit Suisse (Moscow) • Bank WestLB Vostok ZAO • BP • BSH Group • Cargill Enterprises Inc. • Cliff ord Chance • CMS, Russia • Continental Tires RUS LLC • Deloitte • DHL • DuPont Science & Technologies • E.ON Ruhrgas AG • Enel OGK 5 • Eni S.p.a • Ernst & Young • GDF SUEZ • Gestamp Russia • HeidelbergCement • In2Matrix, LLC • ING Commercial Banking • INVESTMENT COMPANY IC RUSS-INVEST • John Deere Agricultural Holdings, Inc. • KPMG • Leroy Merlin Vostok • MAN Truck & Bus AG • MasterCard • Mazars • Mercedes-Benz Russia • Messe Frankfurt Rus, O.O.O • METRO Group • Michelin • MOL Plc • Novartis Group • OBI Russia • Oranta • Peugeot Citroen Rus • Pirelli Tyre Russia • PwC • Procter & Gamble • Raiff eisenbank ZAO • ROCA • SERVIER • Shell Exploration & Production Services (RF) B.V. • Statoil ASA • Telenor Russia AS • TMF Russia • Total E&P Russie • Volkswagen Group Rus OOO • Volvo Cars LLC • VSK •YIT Rakennus Representative Offi ce • YOKOHAMA RUSSIA LLC • Zurich Insurance Company

AEB BUSINESS QUARTERLY • Summer 2012 2 Contents

AEB BUSINESS QUARTERLY, Summer 2012 CEO Letter Introductory words from Dr. Frank Schauff , Chief Executive Offi cer of the Association of European Businesses in the RF 1 Russia's Automobile, Automotive components and Commercial Vehicles Sectors Introduction and General Overview AEB Flagship Conference “New Realities – New Challenges”, pg. 32 Q&A with Joerg M. Schreiber, Chairman of the Automobile Manufacturers Committee; President and Managing Director, Mazda Motor Rus LLC 4 AEB AMC GR working group: value, mission and daily work Maria Morozova, Ph.D., Director External Aff airs and Marketing/ Communications Mercedes-Benz Russia SAO and Chairwoman, AMC GR group 7 Russia’s commercial vehicles market in 2012 Andrey Chursin, Chairman, AEB Commercial Vehicles Committee and Commercial Director, Scania-Rus LLC 8A systematic approach to improving energy effi ciency of industrial plants, pg. 26

From the RF government Q&A with Aleksey Rahmanov, Deputy Minister of Industry and Trade Mr. Aleksey Rahmanov, Deputy Minister of Industry and Trade of the Russian Federation 10 Introduction and General Overview The Automobile Industry in the North-West Region of Russia. Labour Market Elena Novoselova, Director, Coleman Services St. Petersburg 14

The Customs aspects of Russia's automotive industry pg. 24 The Russian automotive sector’s industrial assembly regime Artyom Kursakov, Head of Government Relations, VOLKSWAGEN Group Rus OOO 16 The evolution of the Russian autocomponents suppliers Alexander Breigin, Country coordinator DuPont Performance Polymers, CIS, DuPont Science and Technologies LLC 18 Localisation of automotive components and automotive manufacturers Ivan Bonchev, Investment Director, SI Capital Partners 20 Russia’s accession to the WTO: implications for the automobile industry

Member News, pg. 45 Maria Donchevskaya, Associate, CMS 22

AEB BUSINESS QUARTERLY • Summer 2012 Contents 3

Association of European Businesses in the Russian Federation

Board Bantsekina Olga Becker Christian Hartmann Reiner (Chairman) Hellevig Jon Ketting Jeroen Munnings Roger (Deputy Chairman)

Networking, pg. 34 Pegorier Philippe Sakuler Gerald (Deputy Chairman) Industry speciÀ c aspects Vertanen Vesa The customs aspects of Russia's automotive industry Council of National Representation Alexander Kosov, Head of Practice Group for Customs and Foreign Trade Regulation, Austria – Dietmar Fellner Pepeliaev Group 24 Czech Republic – Yana Ilovicna A systematic approach to improving energy effi ciency France – Luc Charreyre of industrial plants Germany – Michael Harms Michael Akim, Director of Strategic Development, ABB Russia 26 Greece – Stefanos Vafeidis Hungary – Sandor Rethi AEB Updates Iceland – Ingolfur Skulason AEB Flagship Conference “New Realities – New Challenges” 32 Italy – Costante Marengo Networking 34 Lithuania – Julius Salenekas Montenegro – Luka Nikčević Committee Updates 38 Netherlands – Lodewijk Schlingemann Member News 45 Poland – Karolina Skrobotowicz Spain – Alina Simonyan Appointments 53 Sweden – Frederik Svensson New Members 56 Switzerland – Michael Roedter Turkey – Ali Tunc Can UK – Don Scott (Chairman)

AEB CEO Dr. Frank Schauff Publications Manager Nina Anigbogu

Advertising & Sales Olga Pavlyuk

Ul. Krasnoproletarskaya 16, bld. 3 127473 Moscow, Russian Federation Tel.: +7 (495) 234 27 64 Fax: +7 (495) 234 28 07 The Russian automotive sector’s industrial assembly regime, pg. 16 Website: www.aebrus.ru

Publication name/Наименование издания: AEB Business Quarterly Cost/Цена: Distributed free of charge/Бесплатно All copyrighted images are taken from Katerina Grekova, magazine/ Ежеквартальное деловое издание АССОЦИАЦИИ Publisher’s address/Адрес издателя, редакции: www.shutterstock.com and www.dreamstime.com/Фотографии: ЕВРОПЕЙСКОГО БИЗНЕСА 16, bld. 3, Krasnoproletarskaya str.,, 127473, Moscow, Russia/ Екатерина Грекова, www.shutterstock.com, www.dreamstime.com Published by/Учредитель: Non-profi t making partnership Россия, 127473, г. Москва, ул. Краснопролетарская, д. 16, стр. 3 The opinions and comments expressed here are those of the "Association of European Businesses"/Некоммерческое партнерство Printed by/Типография: MEDIACOM, Stolovy per. 6, 121069, Moscow, authors and do not necessarily refl ect those of the Non-profi t "АССОЦИАЦИЯ ЕВРОПЕЙСКОГО БИЗНЕСА" Russia/«МЕДИАКОМ», Россия, 121069, Москва, Столовый пер., д. 6 Chief Editor/Главный редактор: J. Bendel/Бендель Ю. Э. The AEB Business Quarterly is registered with Rosohrancultura, making partnership "Association of European Businesses"/ Publication volume and number/Номер выпуска: 2 (25), 2012 Certifi cate registration ПИ № ФС77-24457/СМИ " Ежеквартальное Мнения/комментарии авторов могут не совпадать с мнениями/ Released date/Дата выхода в свет: August 14, 2012/14 Августа, 2012 г. издание АЕБ" Зарегистрировано в Росохранкультуре, свидетельство комментариями учредителя публикации, Некоммерческого Circulation/Тираж: 16,000 copies /16 000 экз. о регистрации ПИ № ФС77-24457 партнерства "АССОЦИАЦИЯ ЕВРОПЕЙСКОГО БИЗНЕСА"

AEB BUSINESS QUARTERLY • Summer 2012 4 Introduction and General Overview Q&A WITH JOERG M. SCHREIBER, CHAIRMAN OF THE AUTOMOBILE MANUFACTURERS COMMITTEE; PRESIDENT AND MANAGING DIRECTOR, MAZDA MOTOR RUS LLC With the 2012 Moscow International Automobile Salon on its way, the AEB Business Quarterly magazine once again focuses on Russia’s Automobile, Autocomponents and Commercial vehi- cles sectors. AEB’s Automobile Manufacturers committee coordinator Olga Zueva talks to Joerg M. Schreiber, President and Managing Director of Mazda Motor Rus LLC and Chairman of the AEB Automobile Manufacturers committee.

man’s role may be more visible, but tration of new vehicles. For our mem- a lot of work is being done by many bers, it will be paramount to see that people before the AMC takes a public the new requirements are transparent position. With the experience acquired and straightforward to follow, without from working in the automobile indus- room for interpretation at the time of try, perhaps I can now make a diff erent introduction. Th is has not always been Joerg M. Schreiber, President and Managing sort of contribution to help advance the case in the past, and remains a con- Director, Mazda Motor Rus LLC and Chairman, AMC the collective interests of the AMC tinuous challenge in other areas such as members. new technical regulations and product The 2012 Moscow International Auto- homologation. mobile Salon (MIAS) will be the fourth Speaking of it, where do you see the Finally, with the many changes hap- motor show for you since you took the focus of AMC activities in the near future? pening in our industry, it is becoming helm at Mazda Russia in 2005. Looking As the Russian society and economy more and more evident that the AMC back, what are your thoughts about the develops, so does the automotive sec- needs to think about how to further development of the show, and what are tor. Today, the Russian consumer can professionalise its structure and way your expectations for this year? choose from more than 50 diff erent of working. Currently, the committee By all accounts, this year will see a brands of passenger and commercial depends a lot on the voluntary work of record level of new model introduc- vehicles, as well as the services provid- people being on full-time employment tions, international media attendance, ed with them, through a very modern with one of its members. No doubt, as well as senior management partici- and continuously growing network of the close connection to the business pation from all over the world. I am automotive retailers and repairers. Th e is a big asset in seeing the automo- sure that the Russian public and local majority of cars sold in Russia are made tive industry with real-world eyes. But media will take a very active interest in Russia, and this trend growing. In make no mistake, this double role can in what the global automotive com- terms of sophistication and competi- be very demanding, and no one can be munity has to present to consumers in tiveness, the market has come a very in two diff erent places at the same time. Russia, and beyond. long way in recent years. As this posi- Our committee clearly needs to grow tive development continues, there is a its own base of dedicated professionals You have recently been elected Chairman continuous need for the modernisation able to devote all their time and eff orts of the AEB Automobile Manufacturers of sector rules and regulations covering to the very specifi c matters of our trade. Committee, after serving as its Deputy the interactions between manufactur- Th erefore, I made it a priority of my for the lesser part of one year. Having ers and distributors, on one hand, as tenure as AMC Chairman to address already spent several years in Russia, why well as retailers and consumers, on the this issue. If you like, the measure of now the decision to take on a more active other. Th erefore, one of the key tasks success here is that I will be redundant role within the automobile industry? for the AMC will be to play an active in this position, better sooner than later. Well, the AMC traditionally has been and constructive role in the ongoing represented by very able and engaged dialogue with industry participants and The last – and inevitable question: How people. Secondly, serving in an elected state bodies in this regard. do you assess the current status and the role is not the only way of contributing Another hot topic for the sector is prospects of the Russian automotive to the AMC’s activities. In fact the suc- Russia’s upcoming World Trade Organ- industry in the near future? cess of our work depends very much isation (WTO) entry and the regula- Let’s state the known and obvious: the on the active participation of all of its tory changes to the country’s vehicle Russian automotive market has made members, through a variety of work taxation system in this context, such as a remarkable recovery over the past groups and sub-committees. Th e chair- the planned utilisation fee for the regis- 2 years following the 2008 Lehman

AEB BUSINESS QUARTERLY • Summer 2012 Реклама 6 Introduction and General Overview

of world commodity prices also remains a fact of life. So much of our continued well-being here depends on what the global economy does in the near future. I guess a key lesson for everybody out of the Lehman crisis was that the Russia is not an island. For that, the country’s economy is already too well- integrated in terms of participation in international trade and fi nance. But this also implies that Russia can give a lot back to the world economy. Th is is particularly noteworthy as the fun- After the AEB AMC 2012 Press Conference damentals of the Russian economy crisis. Sales of new passenger cars and and 15% cumulative improvement vs. appear very encouraging by compari- light commercial vehicles reached 2.67 prior year on record, we see the market son to many other countries, particu- million (mln.) units in 2011, growing on a good track to achieve this forecast. larly, on a European scale. I, for my 40% year-on year. Th is year, market Th e positive outlook further speaks part, hope very much that this positive participants expect to see a less pro- that all drivers of continued growth trend is robust enough to successfully nounced pace of growth; the median remain fi rmly in place. Among them – weather a potential new global down- forecast points to 10% supporting a a relatively small and aging car park, turn in the making. total PC and light commercial vehicles improving consumer income and an una- (LCV) industry of about 2.9 mil units. bated appetite to own a respectable and With this volume, the industry would reliable car as a symbol of social status, Olga Zueva, regain its pre-crisis level, proving those and means of independence and personal AEB Automobile optimists who had predicted that Rus- mobility in a vast country. Having said Manufacturers sia would do so within 3 years, right. this, the still-signifi cant reliance of the committee coordinator Seven months into 2012 and counting, Russian economy on the development Реклама

AEB BUSINESS QUARTERLY • Summer 2012 Introduction and General Overview 7 AEB AMC GR WORKING GROUP: VALUE, MISSION AND DAILY WORK Maria Morozova, Ph.D., Director External Aff airs and Marketing/Communications Mercedes-Benz Russia SAO and Chairwoman, AMC GR group with localised production in Russia and deprive dealers of dealership rights if disadvantageous to sole importers. In they had compliance violations. case we as a GR working group com- Th e GR working group cannot act pletely fail to reach common position, without the expertise of representatives of lobbying on the issue will be left to other companies, for example a thorough individual eff orts of companies, and the examination of the ERA-GLONASS GR working group will only report all issue could not have been achieved with- subsequent developments to the AMC. out the active participation of the homol- he role of the Government Relations Th ere are other issues, not related ogation and R&D departments of mem- (GR) working group in the work to Russia’s accession to the WTO and ber companies. Th e compulsory use and of the Automotive Manufacturers localisation that we as a GR working requirements of the Global Navigation Committee of the Association of group sometimes need hours and days Satellite System (GLONASS/GPS) and in TEuropean Businesses in Russia is hard to to work through to fi nd a common posi- particular, the ERA-GLONASS systems underestimate. Almost each and every tion. An example is the issue regarding (Emergency call) on all new cars – pas- issue on the agenda of the AMC needs the attempts of the Federal Antimo- senger cars, trucks and buses – are still interaction with government bodies. nopoly Service of Russia (FAS) to “lib- not clear. Th e infrastructure is not devel- Th erefore, to speak with one voice before eralise” the Russian car sales and service oped in the country and the implementa- the state authorities as the AEB Automo- market that is considered to be strongly tion of this system (or at least its procure- tive Manufacturers Committee, we need predefi ned by the OEMs, which, as FAS ment by the OEM’s global procurement a unifi ed and coordinated position. Th is believes, dictate to their dealers sales departments), which has not been certi- only in theory sounds simple: the major and service conditions. FAS is also con- fi ed under internationally adopted stan- complication for reaching a common cerned about the lack of transparency dards is doubtful. position is that the AMC is divided into with regard to agreements between sole importers and Organised Equipment distributors (OEMs) and dealers and The GR working group cannot act Manufacturers (OEMs), which both is investigating dealer agreements and without the expertise of representa- localise their products in Russia and still dealer authorisation processes. tives of other companies, for example continue to import some models. Th ere- Th e AMC GR working group, a thorough examination of the ERA- fore, those who have localised their pro- together with representatives of legal GLONASS issue could not have been duction in Russia support protectionist departments of member companies achieved without the active participa- initiatives of the Russian government in have worked through many of the tion of the homologation and R&D the face of the World Trade Organisation detailed areas raised by FAS to ensure departments of member companies. (WTO) accession, while those who only that consumers continue to enjoy import would like to minder against the high standards of service and repair Th e main value of the GR group impact of such protectionism measures. to secure safe use of their vehicles and remains its fl exibility: we can meet each Th us, an issue with the end-life- that any changes in guidance from FAS other more frequently thanks to the AMC vehicles utilisation fee, which had to be or the new legislation also take into meetings, through “conference calls” and imposed on all vehicles, has developed full account the existing legislation, many times, these take place on short into a protectionism mechanism, where particularly, in the areas of Consumer notice; we can invite experts from other the utilisation fee is being imposed only Protection and Parallel imports. Find- departments with whom we need to onto imported vehicles (new and used) ing a common ground on this issue build up a consolidated and well-ground- and its level is being increased dramati- was considerably diffi cult – a position ed position and we are able to check cally compared to initial plans, i.e. adapt- paper consisting of 20 points was draft- and approve a position or a document ed to compensate for import duties ed. Th is is because for some companies, within few days by circulating the paper reduction eff ective following the WTO strategic interest lay with the trade of via e-mail to the group members. Also, accession. Th us, this issue became a original spare parts, for others – cor- on a personal level, we have managed to corner stone for the AMC, as the devel- porate standards was the most impor- establish a group of trusted professionals opment is advantageous for companies tant issue, and for some – the right to who appreciate each other as friends.

AEB BUSINESS QUARTERLY • Summer 2012 8 Introduction and General Overview RUSSIA’S COMMERCIAL VEHICLES MARKET IN 2012 Andrey Chursin, Chairman, AEB Commercial Vehicles Committee and Commercial Director, Scania-Rus LLC Bus sales grew by 43% – from 1,538 Russia’s entry into WTO should play buses in fi rst half of 2011 to 2,196 buses a strategically signifi cant role in com- in fi rst half of 2012. mercial transport market development, Despite pre-crisis expectations aff ording consumers a wider choice of in Europe associated with a number competitive prices. Unfortunately, in the of economic problems in some EU short-term and probably even medium- states, transport companies in Russia term perspective, market development continued investing money into their may be impaired due to the ambiguity of fl eet modernisation. Th is was primar- a number of economic components of ily related to a stability of the Russian As the AEB Commercial Vehicles economy and a favourable oil market committee forecasted, 2012 started environment as oil prices reached their with moderate growth in all commer- peak. cial transport segments. In the fi rst In the beginning of the year, the half of the year a majority of producers market demonstrated two diff erent improved their positions, as compared trends: in Russia demand and need in to the fi rst half of 2011. fl eet modernisation remains; whereas, In the fi rst half 2012, light commer- the negative economic situation on the cial car sales grew by 9%, as compared global market has, likewise, adversely Vera Kuzmina, Automobilny transport and other participants at the to the fi rst half of 2011, with 83,193 cars aff ected sales’ growth. In addition, in the AEB CVC 2012 Press Conference being sold in comparison to the 76,674 beginning of 2012, the sales declined cars sold in the fi rst half of 2011. due to diffi culties related to the ecologi- the law on transport disposal, which will Th e medium-duty lorries segment cal certifi cation of lorries, as a result of not allow machine producers adapt their demonstrated sales of 5,220 in fi rst half the 12 month Euro-3 standard validity logistics and business processes to meet of 2011 and 5,448 lorries in fi rst half of extension for engines. Despite the fact market demands. We hope that the Rus- 2012, which translates to a growth of 4%. that the critical decision to extend the sian Government will prepare the main Th e heavy-duty lorries segment standard validity was taken as early points of the law more thoroughly, with grew by 2% – from 11,582 lorries in fi rst as at the end of the previous year, the a timely notifi cation to all interested par- half of 2011 to 11,839 lorries in fi rst half relevant order was enforced only on ties; thus, preventing growth in prices at of 2012. February 9th. the consumer level.

Oleg Vasilchenko, Volvo Vostok ZAO and other participants at the Sergey Dyakovov, Automobiles and Prices; Yaroslav Klimenko, Nissan Motor Rus OOO and other participants at the AEB CVC 2012 Press Conference AEB CVC 2012 Press Conference

AEB BUSINESS QUARTERLY • Summer 2012

10 From the RF government Q&A WITH ALEKSEY RAHMANOV, DEPUTY MINISTER OF INDUSTRY AND TRADE

The members of the AEB Board, CNR and senior management would like to take this opportu- nity to once again congratulate you on your appointment as Deputy Minister of Industry and Trade. The AEB Board, CNR and senior management wish you every success in your duties and are fi rmly convinced that your past experience will provide you with a unique perspective and valuable insight into your new posting. Mr. Aleksey Rahmanov, Deputy Minister of Industry and Trade of the Russian Federation meets with Olga Zueva, AEB AMC coordinator a slightly diff erent angle. Just to reiter- overarching problem of production Thank you for taking the time out of ate – we’re not planning any radical oversupply lingers, continuing to be your extremely busy schedule to meet changes. rather acute. Given that Europe is a with the AEB for this interview. As you We track developments in the auto mature market that’s reached a trade- well know, the Moscow International industry – both in Russia and around off point, where new sales are gener- Automobile Salon is scheduled for late the world – very closely. In declaring ated solely on the basis of vehicles August – early September. In the run-up a certain development strategy for a returned for reprocessing, we don’t see to its opening, the Association of Euro- particular element of passenger-vehicle any real potential for signifi cant growth pean Businesses is releasing a quarterly production, we fully understand that on its well-established market. By the publication devoted to the auto indus- the events unfolding in our partner same token, although Russia can’t be try. We would be very keen if you, as an countries have a direct impact on the compared to China, we expect to con- expert and long-time friend of the Asso- situation on the domestic market. It’s tinue posting solid growth rates. Th at ciation would share your thoughts on the like in the old joke – they sneeze in said; this year’s results will be rather development of the auto industry – its New York and catch cold in San Fran- modest: in all probability, 5% to 8%. future and the priorities and challenges cisco. It’s the exact same thing here. We’re also seeing quite a few inter- it faces. We believe that the European auto esting projects continue to develop. A On the subject of your new post – we’re market isn’t performing particularly number of companies are moving on curious as to whether your take on sec- well – the result, unfortunately, of the to new project phases such as building tor priorities and development thrusts, high costs associated with a mature on existing production capacity. For us, on state regulation of the auto industry, market and the latest wave of the cri- all of these developments are confi rma- has changed. How would you assess its sis phenomena that has engulfed us tion of the fact that our overall strate- overall status at present? all. But we also believe that the Rus- gic development path and the form of You know, I don’t change the color of sian Federation’s solid fundamentals state regulation that we’ve proposed to my hair every time I change jobs, so I for increased vehicle sales and ongoing automakers are on-target and eff ective. think the question is superfl uous. We’ve market growth will continue. We hope Today, practically all of the industry’s already devoted a considerable amount that Russia will emerge as Europe’s #1 international concerns are working in of time with Russian and foreign com- market among European Community partnership with Russian companies. panies to the development of a broad member countries by no later than You could safely say that not a single so- strategy for the auto industry. It con- 2016–2017. Th is year, we’re likely to see called “stand-alone” Russian enterprise tains elements that we view as neces- a sales volume of about 2.8–2.9 million continues to operate without a foreign sary. We didn’t discuss it at such length (mln) vehicles, which would only serve automaking partner in one form or and in such detail just to turn around to reinforce Russia’s second-place posi- another. We’re also seeing that in the and start changing its provisions. tion in Europe, after Germany. Moving battle for vehicle quality and consumer Furthermore, we’ve come quite a forward, we’ll be keeping a close eye attributes, Russian companies are shift- long way in terms of our formulation on developments with our EU neigh- ing towards components manufac- of anti-crisis measures – measures bors. Th is year, Europe’s spring – early tured by international suppliers. Taken that have prompted all of us to look summer season has been packed with together, all of these facts give us suf- at the problems of the global and Rus- political campaigning – namely, parlia- fi cient grounds to be confi dent that not sian economies, including the prob- mentary elections in France and Ger- only will the market retain its essential lems faced by the auto industry, from many. Moreover, Europe’s stubborn, properties and features, but that it will

AEB BUSINESS QUARTERLY • Summer 2012 From the RF government 11 also continue to demonstrate dynamic try. I would even venture to say that the and we were forced to extend the per- growth. Moreover, the manufacturing state of the auto industry is of concern mission to produce automobiles below projects that we’ve endeavoured to pro- to everyone. Like football and hockey, the Euro-4 standard. Automobiles that mote, justify the eff orts of those work- our most popular sports, the automo- had received the type approval prior to ing on the Russian investment market. bile has already become a household the adoption of the respective decision. product. We’ve truly made the automo- But, I can assure you that the produc- With respect to Automotive Strategy bile more aff ordable – we have vehicles tion of Euro-3 automobiles in Russia 2020, affi rmed by Order No. 319 of for those with modest incomes, vehicles will be terminated by the end of 2012. the Ministry of Industry and Trade on for the wealthy, vehicles for the elite. All 23.04.2010, could you name the main of them have their fans – people keep- Really? By the end of this year? aspects to its successful implementation? ing tabs on industry developments. Yes, that is to say, on 31 December, the Will changes be made to the Strategy? It goes without saying that if there’s last vehicles of the previously-approved Th e key to the successful implementa- another topic directly related to auto- type will roll of the production line, tion of any strategy is the “umbilical mobiles, it is traffi c jams. It is always on some of which will be dispatched for cord that connects it to the real busi- the minds of our fellow citizens, and is sale, some to body building specialists, ness world.” I would point out that the one of the reasons why there continues and some to those who convert them Strategy wasn’t drafted by a consultant to be such interest in the auto industry. into certain business applications. In trying to make money, but by us, as Another reason is the fact that, any event, as of 1 January 2014, Russia the industry’s regulator, in conjunction despite its relatively modest contribu- will be a 100% Euro-4 country. Th ere’s with real-world enterprises and pri- tion to the country’s GDP, the indus- no debating the issue. We’ve made the mary investors who shared their plans try is also one of its main employ- decision ourselves. Th e Government and upcoming projects with us. So, I ers. According to our estimates, up to of the Russian Federation has adopted believe that the key to the Strategy’s half-a-million people work directly in measures, under which, representatives successful implementation is the fact the automotive and auto-component of the oil industry report to at least four that we’ve crafted it on the basis of spe- industries – almost three million, if one federal agencies on the progress of their cifi c measures, specifi c enterprises and were to include related sectors, or 7–6 respective investment projects. Th is is specifi c investment projects. Of course, million in terms of industry-dependent critical from an environmental stand- every time a set of investment projects households. Th at is a sizeable fi gure; point, the auto industry and technical changes (and frankly, you’re unlikely to hence the reason why the issue can not innovation. Everything is crystal clear ever fi nd a strategy that’s implement- be treated frivolously. After all, each and on that score. Th at said, we’re actively ed by the initially-scheduled deadline every job on the assembly line creates monitoring the status of the econo- or adheres 100% to the original plan), another 8 jobs in the wider economy. my and that of individual automotive timeframes are adjusted and may be In other words, the government would enterprises. Th e single-industry towns pushed back accordingly. It’s also pos- have to be incredibly naïve to ignore in which automobile, auto-component sible that the strategic framework for such an important multiplier eff ect. and accessory production is centered certain sub-segments will come up for Th is explains the heightened attention continue to exist, making any discus- review. All of these processes force us to the auto-industry. So, in discussing sion of new support measures prema- to make certain adjustments to our support measures, we’ve always kept ture. On the other hand, if we’re talking charted course. In the end, though, the their three integral elements and rea- about the fact that, from an environ- course is one of development, and it’s sons in mind. Th e fi rst and most impor- mental point of view, the Russian mar- the one we’ll continue to pursue. tant reason is the development of the ket is still in need of fl eet renewal, I auto industry itself: it can not be merely wouldn’t exclude the possibility of our The government has been gradually assembly-oriented – it has to be fully- side engaging the automotive commu- introducing measures to stimulate the functional or cease to exist. Th e second nity in a lively discussion on any mea- auto industry (for example, the “cash- reason, of course, is the creation of sures and proposals aimed to this end. for-clunkers” program and the localisa- the modern jobs to which the nation’s Incidentally, the principle behind tion of Western production operations leaders so often refer. Th e third and the introduction of scrappage fees that within Russia). How eff ective have these increasingly-pressing reason is related has caused so much discussion and measures been? to environmental concerns. It’s been so debate at the Committee for Natural- Th e automobile has long since long since we’ve paid attention to envi- Resource Use and the Environment evolved from being a luxury into a ronmental factors that even in our pro- brings up the topic of scrappage of mode of transportation. To the aver- tected areas, vehicles are responsible older vehicles, an issue which sooner age person, the automobile represents for a much greater volume of pollution or later will become the manufacturer’s either a personal mode of transporta- than the industrial operations against responsibility. It’s also an element that’s tion, the vehicle in which their relatives which Krasnoyarsk and Irkutsk natives, closely linked to fl eet renewal, because get around, or what they use in their just to name a few, protest so pas- there’s a very simple logic at work here: daily commute to and from work. So, a sionately. Unfortunately, due to various by letting the fl eet age from year to year, great many people have a personal stake reasons oil companies did not manage we create at least three problems at in what’s taking place in the auto indus- to complete their investment projects once – fi rst is the issue of pollution; sec-

AEB BUSINESS QUARTERLY • Summer 2012 12 From the RF government ond is the higher accident rate, because trolled importation of used vehicles, will Given that we’re now living according to no matter how often we’re told that a be accepted and appreciated by all market Strategy 2020, the WTO won’t have any ten year-old Lexus is better than a new players. Given that the Automotive Strate- negative impact on its implementation Zhiguli, the older car is still more likely gy presupposes the Russian production of or the performance results of our domes- to fail than the new one, that’s statistics. at least 80% of total domestic vehicle sales, tic companies. Of course, everything Th ird is the issue of market growth. Th e we hope (considering that all manufac- depends on how swiftly the measures are only two factors that infl uence mar- turers will have the opportunity to extend we plan to take are implemented. Just to ket dynamics – the fi rst is the increas- direct guarantees) that it will emerge as a reiterate – the main threat to the devel- ing weighted share of automobiles per useful packaged decision, allowing for the opment and implementation of Strategy thousand residents, and the second is interests of all players to be considered 2020 are the used-vehicle rates that have fl eet renewal. While Europe only has and respected. Allow me to reiterate – yet to undergo the reconciliation process. fl eet renewal to work with because the we’re for packaged decisions: we recog- Th e second, of course, is that the car saturation ratio has reached its opti- nize how diffi cult it is to champion the WTO is likely to force us to reconsider a mum, both factors are certainly at work interests of narrow manufacturing groups number of investment projects, insofar in Russia, and will continue to be until a or the representatives of individual enter- as the free movement of goods is the saturation point of around 400 automo- prises. Th at is precisely why we want to direct antithesis of the free movement biles per thousand residents is reached adopt general, common and clear rules of capital. It would be naïve, at best, to in approximately 2020–2022. Th e fi g- of the game that can not be broken down challenge such economic dogmas and ure will stay at that level until the next into smaller sub-decisions. We also do axioms. Moving forward, everything technological and infrastructural wave, not want to subject them to the risk of will depend on the extent to which the at which time, we’ll be able to reach the the shortcomings of Russia’s current busi- WTO emerges as a true facilitator of Western European (600-vehicle) or US ness practices. I can tell you that when fair trade. I believe that we, as unquali- (800-vehicle) level. For now, structural projecting 2011 results for certifi cation fi ed adherents of the WTO’s general limitations prevent us from forecasting principles, namely the free movement any such shocks. According to our estimates, up to of goods and non-discrimination on Returning to state-support measures half-a-million people work directly in global markets, have gained a certain for a moment, they will in any event be the automotive and auto-component confi dence that as a producer, we’ll be actively discussed, just as they have been industries – almost three million, if able to assume the position on open- in the past. Th at said, I would just point one were to include related sectors, ing markets that we’ve been counting out that we can’t apply measures to a or 7–6 million in terms of industry- on, insofar as the auto industry’s export specifi c manufacturer or individual group dependent households. line, even within the parameters of our of interested parties. We will always pro- Strategy, currently plays an insignifi cant pose packaged decisions, because, unfor- role. In this connection, Russia’s ascen- tunately, in the case of Russian and for- agencies, we uncovered roughly 50,000 sion to the WTO will emerge as one eign businessmen alike, even Karl Marx vehicles that had crossed the Russian bor- of the key reasons for our review of the was probably correct in asserting that der under wrongfully-issued and even Strategy, placing particular emphasis on “there’s no crime to which a businessman forged certifi cates – a phenomenon we’ll the export markets. Today, we’ve arrived wouldn’t stoop for the sake of profi t.” defi nitely be fi ghting. We’ve come across at the model we’re currently working Th at’s why I believe that we should for- similar stories in which vehicles clear with, given that all vehicle manufactur- mulate comprehensive rules that are clear customs under dubious documentation. ers and importers on the market will to everyone, meaning that even in losing We’re very familiar with the problem. Th e be geared towards domestic demand. an element or sub-segment along the Ministry of Industry and Trade group, We’re assuming that our enterprises will way, the industry still gains overall. Within tasked with interdicting the importation gain an additional benefi t when their the scope of ascension to the WTO, for of products deviating from certifi cation specialisation in certain vehicle models example, the issue of used imports is specimens, is set to begin operating again. translates into a driver of development problematic to market players across the For us, this represents a high-priority task, and export potential. Th e issue is cur- board, insofar as it restricts both new because if we don’t address the problem, rently the subject of intense study and, domestic production and the direct many of the economic stimulus initiatives within the framework of measures relat- import of new vehicles. We understand we’re currently drafting will be rendered ed to Russia’s ascension to the WTO, that if the economic situation in some ineff ective. Strictly speaking, that’s our will soon come to the fore. Over the countries worsens, leading to an infl ux general plan with regard to future steps short-term, of course, we continue to of used vehicles that weren’t scrapped as to be taken. face the risk of a sharp reduction in required under applicable law, it would duties on commercial vehicles. Here, be, on the one hand, a big plus for foreign After many long years of negotiation, we’re assuming that state demand will manufacturers, and on the other, antago- Russia is fi nally ascending to the WTO. partially address the problem. Aside nise the overall dynamics of the Russian How will this development aff ect the from free trade principles, ascension to market. Th erefore, we hope that the idea automotive industry? What can we expect the WTO gives us yet another critical of scrappage fees, which is aimed, fi rst over the short, medium and long-terms? incentive – improving the competitive- and foremost, at prevention of uncon- ness of domestic auto companies, creat-

AEB BUSINESS QUARTERLY • Summer 2012 From the RF government 13 ing engineering potential, and mapping today. Th erefore, in the future, we of servicing both the Ural and Siberian out the role Russia and the Russian auto anticipate fairly routine daily work. Regions. In this connection, we’re hold- industry are to play in the international ing active talks with our Kazakh and division of labour. Th is is a matter of How do you assess the results of the Belarus colleagues and will search for fundamental concern to us. creation and development of auto clus- ways to implement this initiative. Moving forward, everything ters? How eff ective have measures to will depend on how the WTO itself stimulate the auto industry in this area On 7th of June, 2012, Prime Minister Dmi- evolves, as you well know, attempts been, and does the Russian Government try Medvedev spoke at a government ses- to overcome the impasse at the Doha plan to develop a new set of measures to sion about a bill that had been drafted Round were not successful. Th at said, stimulate development? at the initiative of the Russian Govern- several important issues are currently Given that diff erent researchers and ment, which envisions additional guar- being discussed with other countries, specialists often have a diff erent inter- antees for investors active in the Russian in view of the fact that we’re signatories pretation of the “cluster” concept, I only auto industry in connection with Russia’s to a great number of European agree- use the term in exceptional cases – for ascension to the WTO. Could you shed ments, the Geneva and Vienna Con- descriptive purposes, for example. But some more light on the subject? ventions among them. we agree that in economic terms, in When we joined the WTO, we assumed Returning to your question as to terms of the cost of logistics and the certain restrictions on producer sup- how our vehicles will be brought into convenience of operating in a lean- port. Th e operating mode of industrial closer compliance with European stan- production environment, enterprises assembly in place today will cease to dards, I’ll reveal a big secret to you – of engaged in automobile and compo- exist on 1st of July, 2018. Consequently, our 76 certifi cation requirements, 71 nent production should be territorially we and the Russian Government were have been taken from European rules. concentrated. From this perspective, faced with the challenge of identifying So, I’m not at all worried about when I think we have three sustainable clus- additional solutions that would allow us we’ll become a European vehicle – we ters – three regions, actually – where to maintain the current mode through became one a long time ago. On the such a development approach is war- year-end 2020 – solutions that were other hand, our consumers sometimes ranted and viable: the newly-formed subsequently refl ected in the strategic ask for “bare-bones” vehicles because cluster in the Northwest Region, projects and primary business plans of they’re cheaper. Th at said; within the the Volga Region (Togliatti, Nizhny the companies that have decided to join scope of the technical regulations Novgorod, Ulyanovsk) and the Cen- the expanded mode of industrial assem- that we’ve adopted, strict phases have tral Region – Moscow/Kaluga, which bly. Th at’s it. In reality, the new mode is been put in place in terms of mov- is making a strong bid for leadership. nothing more than the legislative setting ing towards mandatory vehicle equip- Of course, we also have distant points of the obligations of the Russian Fed- ping, with required passive and active such as Southern Russia where things eration to investors, which have been safety features (ABS, airbags, and fur- aren’t as bright. At play here, however, is affi rmed once again. We’ve stated for the ther down the list of ECO rules). So, purely the management factor, which is record that the WTO situation is com- overall, we look towards the future of preventing the respective projects from plex, but that we’ll continue to support the Russian auto industry with a sense developing. So, overall, I think three all current projects through year-end of optimism – for us, it has evolved growth centers will emerge. In my per- 2020 by WTO allowed measures. from something markedly national sonal opinion, developing production into a rather multifaceted, international in a megacity like Moscow would be A fi nal question: what would you like to industry. Th is fact has forced us to prohibitively expensive for the auto wish the auto industry? closely analyse all of the support mea- industry. But if cost-eff ective projects I think it’s always appropriate to wish sures we’re taking. If a negative process are implemented swiftly here, then I for appreciative, grateful customers suddenly starts developing – prompted don’t see why not. Certainly, the pro- and overall industrial stability, without not by the availability or lack of pro- duction of inexpensive models should either, none of our projects would end duction capacity, but by changes in be concentrated in those regions where in success. I should mention that in an general consumer attitudes – we’ll dis- the cost of vehicle and component pro- environment of positive market devel- cuss and add state support measures, duction will be kept under strict con- opment, we’ve managed to achieve a such as demand stimulation to those trol. Overall, with the exception of the pace that points to stable growth. If the we’re already in the process of actively projects currently being implemented current trend continues – if our custom- considering: compulsory civil-liability in the Far East, we’re unlikely to see the ers support us – we’ll be just fi ne. auto insurance (OSAGO), taxes and emergence of new auto-manufacturing economic incentives for fl eet renewal. clusters in the Urals or Siberia. Insofar Today, we have a fi rm grasp of these as local demand is relatively low in those measures and well-formulated mecha- regions, any initiatives by our colleagues Olga Zueva, nisms and principles that I think we’ve in the Urals or Siberia would likely be AEB Automobile generally implemented quite well; this shut down by partnership projects with Manufacturers has helped us achieve the parameters our Kazakh colleagues. It’s a fascinat- committee coordinator on the post-crisis market that we see ing topic, because it has the potential

AEB BUSINESS QUARTERLY • Summer 2012 14 Introduction and General Overview THE AUTOMOBILE INDUSTRY IN THE NORTH- WEST REGION OF RUSSIA. LABOUR MARKET Elena Novoselova, Director, Coleman Services St. Petersburg in 2012: growth is driven by the foreign often referred to as the Detroit of Rus- brands. sia. St Petersburg’s automotive plants employ over 15,000 people. If the glob- The share of cars assembled in Russia al automakers’ plans for Russia are to reached 70% come to fruition, the foreign car plants Russia's Autostat analytical agency said, will require over 20,000 employees or quoting a report of the ASM Hold- 30,000 if the automobile components ing, that the foreign cars assembled in suppliers are also taken into consider- Russia contributed 68.9% of Russia’s ation. total car production in the fi rst quarter Th e automotive sector accounts for of 2012. Total production volume of 20% of the total number of job oppor- he main objective of the Russian cars in Russia amounted to 449.6 vehi- tunities. At the same time, the lack Federation state programme for cles with 309.7 of them being foreign of human resources forces employers the development of the national brands. Foreign brand car production to constantly revise the remuneration automotive industry until 2020 is volume rose 42.7% compared to the packages. toT maximise the value added across all fi rst quarter of 2011. Th e automotive industry of the aspects of a vehicle’s production cycle North West region has been experi- in Russia, maximise consumer choice The problem of equipment being encing a shortage of skilled workers and the quality of vehicles produced. worn out by 51-53% on average is and engineers for quite some time. (Strategy 2020 for the Russian domes- not the only problem that concerns Th ere has always been a problem of tic automobile industry) experts. Another problem is the blue collar labour turnover. Working St. Petersburg plays a leading role in depletion of the workforce in St. conditions are unfavorable and work- the implementation of the objectives Petersburg. The companies are facing loads are huge. Workers move from set out by the national Automotive a looming labour shortage, in these one employer to another, in search of Industry Development Program. As circumstances, the need to retain better conditions and payment. the city locates production facilities employees becomes a top priority for Nevertheless, the companies spare of the world’s leading car manufactur- the human resources (HR) managers. no eff orts in attracting personnel. Last ers, it can rightfully be considered an year, salaries within the automotive important center of the automotive A Kaliningrad-based Auto company industry grew by 10 – 15%, as com- industry in Russia. was announced the biggest manufac- pared to other sectors of industry. At Total investment in the construc- turer of foreign cars in Russia, with an present, the average monthly salary of tion of automobile plants was 1.3 bil- output of 56,065 cars of various models. a blue-collar worker is 23-35 thousand lion US dollars (USD). By 2018, the A St. Petersburg’s auto plant ranked sec- rubles (RUB) and 30-50 thousand RUB annual output of the Saint-Petersburg ond with an output of 54510 cars. for engineers and technologists: among automotive cluster is expected to be 1 Foreign car makers have been able the factors aff ecting salary are speciali- million cars. Construction of the car to introduce new models of cars and sation, type of work, number of shifts assembly plants will draw new auto expand their production capacities; and others. components plants to the market, as whereas, Russian manufacturers have Th e automotive industry off ers offi - well as boost further automobile mar- slowed down production. Th is resulted cial employment, remuneration condi- ket development. Th e St Petersburg in an increase in the share of foreign tions that are in accordance with the automotive cluster demonstrated a made cars produced in Russia. Accord- requirements set by Russian law and strong performance in 2011. ing to the Autostat analytical agency, generous benefi ts packages; thus mak- According to Eduard Batanov, the share of Russian-made foreign ing it an extremely attractive sector to Head of the Committee for Finances brands accounted for 35.4% in 2007. work in. at St Petersburg Administration, last Th ree years before, it was only 11.6%. Foreign car manufacturers are will- year, the output of the St Petersburg Th e share of foreign cars manufactured ing to pay salaries that are above market automobile plants increased by 3.6. He in Russia reached a record 52% in 2010. average and global auto makers provide said that one out of seven cars made Due to the fact that many car man- their Russian staff with a comprehen- in Russia is produced in St. Petersburg. ufacturers have set up manufacturing sive benefi ts package. An employee is Batanov said authorities expect the operations here, or are looking to do so entitled to a health insurance that in plants to boost their output by 40-50% in the nearest future, St. Petersburg is some instances includes dental cover-

AEB BUSINESS QUARTERLY • Summer 2012 Introduction and General Overview 15 age, life insurance, workwear allowance, competition within the St Petersburg Another problem is the depletion of free or subsidised meals, transportation automotive market, which translates the workforce in St. Petersburg. Th e to/from work, company paid sports to better remuneration packages to companies are facing a looming labour club membership, and discounts on attract new employees and retain exist- shortage, in these circumstances, the company products. For example, one of ing ones. Th e educational sector plays need to retain employees becomes a the plants provides its mid-level man- a key role in solving the problem of top priority for the human resources agers with brand-new corporate cars. labour shortage. But even if the pro- (HR) managers. Th e importance of It also off ers health insurance coverage fessional institutions are to provide human resources management at all to all employees and their family mem- training engineer and technologist levels cannot be overestimated. Th e bers. On Friday evenings the staff are job, there’s still a suffi cient shortage of way HR processes are organised within invited to interact freely with the senior workers with secondary education. a company serves as its wellness indica- managers on various issues, in an infor- tor: if human resources are effi ciently mal setting, over drinks. On weekends Nevertheless, the companies spare managed, trained and motivated, they the company off ers its staff an oppor- no eff orts in attracting personnel. will strive to work better and demon- tunity to play tennis, giving, likewise, all Last year, salaries within the auto- strate better results. Personnel quali- interested persons a chance to play a set motive industry grew by 10–15%, fi cations are by all means important, with the plant general manager. as compared to other sectors of but only motivated employees that Many employers provide progres- industry. share the company’s values and see sive loyalty programs. Th is means that themselves as an essential part of the the longer an employee stays with the Residents of the North-West region, company's future, will contribute to company, the more lucrative the com- including Novgorod, Pskov and Volog- the company’s growth and success in pensation package. da oblasts can be a possible source of achieving its goals. New production facilities are to be labour for the industry. Th e only prereq- Th e Russian market still remains put into operation and existing plants uisite when employing from these areas lucrative for the global car makers. Th is are to be expanded in the next couple is the provision of accommodation. means that more companies are going of years. Th is will lead to a growing Th e problem of equipment being to build manufacturing facilities here, demand for skilled workers and engi- worn out by 51-53% on average is not and the demand for skilled labour is neers. Th e result will be an increased the only problem that concerns experts. going to remain high.

AEB BUSINESS QUARTERLY • Summer 2012 16 Introduction and General Overview THE RUSSIAN AUTOMOTIVE SECTOR’S INDUSTRIAL ASSEMBLY REGIME Artyom Kursakov, Head of Government Relations, VOLKSWAGEN Group Rus OOO conditions for the automotive industry of the Russian Automotive Industry in Russia led to a number of measures, development for the period up to 2020, which changed the whole framework which set new goals and fi xed new for the sector. Russian incentives for the parameters. In particular, the docu- car manufacturers started as early as ment outlined the expected increase the mid 1990s through the creation of in the localisation level of the currently a special economic zone in Kaliningrad manufactured vehicles, stating that the region, where contract manufacturing of locally produced car ratio is expected several foreign brands had been applied. to be up to 80% by 2020. A decision was However, in 2005, a new piece of legisla- made to realise these ambitious plans General information tion was adopted that introduced the by introducing new (modifi ed) indus- For the last decade the Russian automo- so called “industrial assembly regime” trial assembly regime rules. Moreover, tive market has been steadily growing at for automobiles. As this decision was several agreements between the for- an impressive pace, reaching the size of one of the most important ones for the eign car manufacturers’ with the Min- the second ((2.5 million (mln.)) largest Russian automotive industry, let us take istry of economic development are to automotive market in Europe, after Ger- a detailed look at this regime and how it expire starting from 2012; therefore, it many (3.2 mln.), in 2011. Th e increase has evolved over time. was important for the Russian Govern- of the sales of automobiles in Russia has ment to come up with some solutions been secured by the steady increase in Overview of the industrial assembly in order to secure fair competition on the welfare of the Russian customers regime the Russian automotive market and and their higher exposure to imported As mentioned previously, the industrial save the investments already made by goods. Although it is the 8th largest coun- assembly regime was adopted in 2005 the industrial assembly regime partici- try in the world population wise, the by a special Government resolution pants. In late 2010, Russian Govern- Russian Federation still has very low #166 and the Decree of the three Rus- ment approved the amendments to the (250) vehicle density per 1,000 people sian ministries: Ministry of Economic abovementioned Decree that allowed (in comparison – Poland: 453, Germany: Development and Trade, Ministry of all interested companies amend, and 515, US: 643). Th at is of course a big Industry and Energy and Ministry of thus, prolong their existing agreements opportunity for foreign car manufactur- Finance (hereinafter 166 Decree). Th is with the ministry up until 2020, only. ers, as well as for the Russian producers. regime made provision for an exemp- Th e key diff erence of the modi- Another factor in the development of tion from certain import customs fi ed version of the industrial assem- the automotive market is the Russian car duties for a number of auto-compo- bly regime is the increased require- park’s age: 48% of the vehicles older than nents provided that the car manufac- ments for the car manufacturers, which 10 years and 25 % are older than 5 years. turer agreed to localise car production among others include: Taking into account that the number of in the Russian Federation by building a ■ To build new or modernise produc- vehicles on the Russian automotive mar- factory with a capacity of at least 25 000 tion capacities of 300/350 thousand ket exceeds 35 mln. and the improved units per year. Th e terms of the regime units (including available full scale economic status of the Russian citizens, contained several obligations for the production capacity) within 36-48 a demand for the new cars in Russia car manufacturer to conduct the fol- months after the entry into force of will be sustained in the coming years. lowing operations in a Russian factory: the new agreement. Th e AEB Automotive Manufacturers body welding and painting, power unit ■ To establish full cycle engines or trans- committee’s forecast regarding the total assembly, assembly of the rear and front missions production in Russia (no number of cars and light commercial suspensions and other operations. Th e volume threshold) provided that 30% vehicles (LCV) on the Russian market Decree stated the 7-8 years following of the vehicles produced in Russia are in 2012 stands at 2.85 mln. In 2011, the date of the signing the agreement equipped with engines manufactured according to the committee’s statistics, with the Ministry of Economic Devel- locally in 36-48 months after the entry about 2.6 mln. passenger cars and light opment, the car manufacturer should into force of the new agreement. commercial vehicles were sold. reach a localisation level of 30%. ■ Duty free importation of semi- All abovementioned factors and In 2010, the Ministry of Indus- knocked-down (SKD) kit is allowed state intentions to create favourable try and trade adopted a new Strategy for the fi rst 36 months in the amount

AEB BUSINESS QUARTERLY • Summer 2012 Introduction and General Overview 17

not exceeding 5% of the available Even though car manufacturers Russia vs. CIS automotive industry full production cycle capacity in any fully support Russia’s accession to the Another very important issue for for- given year. Th e quota is defi ned and World Trade Organisation, the sub- eign car manufacturers producing in confi rmed annually. sequent regulatory changes affi liated Russia is the regulation of the move- ■ Car manufacturers should establish with its membership constitute prob- ments of goods within the Common- a research and development (R&D) lems for the car manufacturers. Th e wealth of Independent States (CIS), center in Russia, which will ensure ful- most important issue for all automo- which is gaining momentum with fi llment of the following operations: tive market players is the import duty regard to further integration, especially, design and engineering of the vehicle, decrease for used cars (from 35% to considering the recently adopted Free testing of the auto-components, testing 25% and signifi cant decrease of the spe- Trade Agreement. Taking into consid- of engine, chassis and other operations. cifi c component). Pursuant to the Rus- eration that some CIS countries have According to the terms of the sian Ministry of Industry and Trade’s massive SKD production on their ter- amendments all applications (or notifi - estimations, the volume of the used ritories, it may constitute a great risk for cation of interest) were to be submitted car imports amounts to some 800 000 the industrial assembly regime partici- before 28 February, 2011, which 6 Origi- units per year, which is around 1/3 of pants should import duties payments nal Equipment Manufacturers (OEMs) the forecasted total market for 2012. by the importers from those countries and over 180 Original equipment sup- Th is duty decrease may signifi cantly be low or absent. Foreign car manufac- pliers (OESs) did. Within subsequent 3 harm the market of new car sales, and turers fully support integration process- months, all OEMs that applied submit- thus, make local production under es within the CIS and Single Economic ted full investment agreements. Com- industrial assembly regime less attrac- Space in particular, but an even playing ponent suppliers are expected to sub- tive. Th e Russian Government is fully fi eld and fare competition should be mit their business plans on or before 31 aware of this fact and is elaborating a also properly secured on the market. December, 2013. On June 1st 2011 the new mechanism of “utilisation fees”, Ministry of Economic Development which is aimed at not only creating an Even playing fi eld for the industry announced that only 4 companies had End-of life-vehicles system in the Rus- participants signed the modifi ed agreements. All sian Federation, but also preventing Last but not least the existence of the previous agreements signed with other the infl ux of used vehicles (passenger Kaliningrad Special Economic Zone manufactures will remain in force till cars, commercial vehicles and buses) that provides unprecedented customs their expiration dates. into Russia. Car manufacturers fully and tax benefi ts for the production pur- Overall, currently, 31 industrial support a mechanism that will secure poses within its territory should be men- assembly agreements (both old and the further development of the new tioned. Th ere are very few requirements new versions) have been signed with cars market, and prevent in the infl ow for a company to become a resident the car manufacturers, 23 of which are of used cars. of the mentioned Zone. In exchange, already in force: the remaining are the this status provides a company with an so called “sleeping” agreements that The AEB Automotive Manufacturers opportunity to mass produce vehicles should be activated by the end of the committee’s forecast regarding the under the SKD regime, with no subse- 2012, otherwise, they will be annulled. total number of cars and light com- quent obligations concerning localisa- At this stage it is still a little bit pre- mercial vehicles (LCV) on the Russian tion of the auto-components (in 2011 mature to make any fi nal assessments market in 2012 stands at 2.85 mln. some 222 100 vehicles were produced of the new version of the industrial In 2011, according to the commit- there). All car manufacturers operating assembly regime, however the general tee’s statistics, about 2.6 mln. pas- in Russia under the industrial assembly approach of the Government in 2004 senger cars and light commercial regime strongly believe that such a situa- proved to be successful. Currently, not vehicles were sold. tion not only creates unfair competition only 70% of all cars sold in Russia are and demotivates further investments locally produced, but also, all top 10 Moreover, according to the WTO into the Russian automotive industry, models are Russian made. accession terms, all customs duty but also contradicts long-term plans of exemptions that are granted to the car the Russian industrial policy. Current concerns of the industrial manufacturers should be revoked as of In conclusion, it should be noted assembly regime participants July 1, 2018, whereas industrial assem- that a successfully implemented policy bly regime agreements are valid until of the Russian Government aimed at Russia’s accession to the WTO December 31 2020. Th us, the Russian attracting foreign car and components Even though the above mentioned Government should consider taking manufacturers should not only be regime is well functioning and proved certain actions in order to secure the continued, but also properly executed. to be appreciated by the foreign manu- fulfi llment of its obligations under the Only open and constructive communi- facturers, benefi ciaries of this regime are legal agreements with the car manufac- cation between the Russian regulatory currently facing several problems that turers. As we know, Russian Ministry of authorities and industry representa- may signifi cantly alter or even deterio- Industry and Trade is now elaborating tives may secure a stable and consistent rate the environmental conditions for a compensation procedure for partici- growth of the automotive market in the the industrial assembly of automobiles. pants of the industrial assembly regime. Russian Federation.

AEB BUSINESS QUARTERLY • Summer 2012 18 Introduction and General Overview THE EVOLUTION OF THE RUSSIAN AUTOCOMPONENTS SUPPLIERS Alexander Breigin, Country coordinator DuPont Performance Polymers, CIS, DuPont Science and Technologies LLC dimensional and functional require- avoid duplication of functions. Certain ments from the OEM and go unas- components were being designed both sisted through all the stages of the by the engineers at the OEM’s design design process (from material selection bureau and those at Tier1. Th e same to making prototypes) providing OEM was also the case with material selec- with ready solutions. tion, tests labs and many other func- Nowadays, companies who supply tions. autocomponents are leaders in inno- With political changes in the coun- vation. Most modern technologies try at the end of the 20th century, Rus- designed to increase safety and com- sia began integrating into the global Key points fort in modern cars were introduced by economy, and at this point, the coun- 1. Importance of Autocomponents to the Bosches, Valeos etc. try’s automotive industry was seriously the Automotive industry. Historically the autocomponents challenged by global competition. Th e 2. Role of the autocomponents suppli- business developed in two diff erent autocomponents industry appeared to ers in innovation. directions: be a weak point, with an important 3. History of the Russian Autocompo- ■ Th ere were some big companies inte- part of this industry missing – small nents industry: low effi ciency, dupli- grated into the OEMs structure (for innovative companies specialising in cation design functions. example Visteon as part of Ford, Del- certain applications. A typical Rus- 4. Status at the end of the 20th cen- phi as part of GM, Denso as part of sian autocomponent plant was mak- tury – not able to supply to incoming Toyota, and so on). Th ere were fully ing a wide range of components, for international Organised Equipment or partly separated later on. example, Dimitrovgradski Avto Agre- Manufacturers (OEMs). ■ In the same time independent, pri- gatny Zavod (DAAZ) produced almost 5. International Tiers 1 moving to Rus- vately owned smaller companies everything from door locks to radiators sia slowly (volume does not justify arose on the market in response to and carburetors to lightings. investments). a growing demand for new compo- Th e need for change was obvious. 6. Last chance for local manufacturers nents and fl exibility, and fast adap- But new managers of former state to update technology and improve tation to a changing technological owned plants were struggling with quality to meet the OEMs require- landscape. decreasing demand, price pressure ments. In Russia the autocomponents fac- from the OEMs and cash fl ow prob- 7. OEMs support the development of tories were being built alongside the lems caused by huge account receiv- local manufacturers. automotive plants. On one hand, this ables. Re-equipment and technological 8. Material suppliers’ support so called “planned economy” had a upgrade was not a high priority. As number of advantages: locations of the result, Avtovz and other Russian Conclusion autocomponents suppliers were select- OEMs started importing many com- Th ere is good chance for new Rus- ed in such a way as to optimise all logis- ponents. When global OEMs came sian components’ makers to fi nd their tics. Capacity was planned to meet the to Russia with local production they place in the market by investing in new OEMs exact needs, which guaranteed also brought a new opportunity for equipment and allowing help from market for produced units, etc. On the Russian autocomponents makers. both the OEMs and material suppliers. other hand, there were signifi cant dis- Being under Government pressure to It’s diffi cult to overestimate the advantages to such an arrangement of localise production, they were willing importance of autocomponents pro- the size of the autocomponents plants to help local components and parts ducers to whole automotive industry. (in some cases up to several thousand makers upgrade their technologies and In many cases 60% of a car’s value is employees) made them infl exible, slow. quality control systems to meet inter- supplied by Tier 1 suppliers (depend- A guaranteed market did not encour- national requirements. At the same ing on whether the power train is out- age innovation. Lack of competition time, international OEMs intensively sourced or not). Very often producers and once again, the shear size of the worked with their traditional suppli- of autocomponents bear all responsi- plants, very often made them ineff ec- ers, trying to convince them to start bility for the design and functionality tive in terms of cost. Close links to local production in Russia and there of the component. Th ey receive the the automotive plants did not help to are many examples where supplier

AEB BUSINESS QUARTERLY • Summer 2012 Introduction and General Overview 19 companies went ahead and localized maker can also rely on the expertise production. International companies and valuable help of a material supplier. such as Automotive Lighting, Jonson Having worked for many years in the Controls, Magna, Lear, Valeo, Delphi area of performance polymers and I and many others now boast of their know of several success stories with own manufacturing sites in Russia. But regard to such cooperation. Th e help of the scale of local production and rate a material supplier in designing a part, of localisation is not necessarily high Computer Added Engineering (CAE) enough. Th e reason is that the interna- or tool design, allows the components tional Tiers 1 supply mainly OEMs. An supplier off er a competitive, cost eff ec- order from a single foreign OEM is not tive and quality component to OEM. big enough to justify full scale compo- Good design of plastic parts have a nents production with in-depth locali- positive eff ect not only on the weight sation; therefore, many components and cost of the component itself, but and subcomponents, especially, small also on assembly and secondary opera- ones continue being imported. How- tions cost. ever, this also means that the window However, Russian components of opportunities for Russian companies companies who wish to fi nd their is still open. Th ere are two strategies niche within the Russian automotive for Russian components makers that logical upgrade and quality improve- industry should act quickly. As soon might appear successful, one is to form ments. Th e second strategy focuses on as the growing car production reaches a successful partnership with one of the self-development: using the experience critical fi gures, localisation will become international components companies and help of OEMs, small companies a focus for the foreign components considering brown fi eld production in can invest in new equipment and off er makers. Another factor is the World Russia and in need of a partner with new technologies that do not exist on Trade Organisation (WTO). A deduc- local connections to the market. Th is local market. In my experience with tion of customs duties on raw materials option is mainly for bigger, well estab- automotive plastic components and will promote a healthy competition for lished local players who need a techno- parts, in many cases, a components locally made components. Реклама

AEB BUSINESS QUARTERLY • Summer 2012 20 Introduction and General Overview LOCALISATION OF AUTOMOTIVE COMPONENTS AND AUTOMOTIVE MANUFACTURERS Ivan Bonchev, Investment Director, SI Capital Partners

Manufacturers (OEMs) have been ■ Operational cost (as compared to a considering Russia as a production number of locations in Central and hub for other markets. In addition, the Eastern Europe, whereby, a number expected World Trade Organisation of global supplies had already moved (WTO) accession will aggravate this capacities). ratio even further. Th is is why in early 2011, an amend- 2. Lack of domestic automotive com- ment to reg. 166 and 566 was passed, to ponent manufacturers capable of facilitate the localisation process. Th ose meeting OEMs requirements. car manufacturers willing to extend Th ere are very few domestic sup- their reduced customs duties until pliers with the potential to meet the 2020, have to commit to much larg- he Russian automotive market has growing OEMs needs, primarily, due to er capacities (see Table 1), increased been on the track of quick recov- technological backwardness and lack localisation and Research and Develop- ery, following a dramatic drop of of fi nancial and investment strength. ment (R&D) activities. Original Equip- about 50% during the economic Global suppliers, on the other hand, downturnT in 2009. Th is year, the market despite having Russia on their strate- Table 1: Procedure of Industrial Assembly is expected to go back to its pre-crisis gic agenda, have shown only limited Th e procedure of Industrial Assembly level, and potentially, even surpass it. investment activity, and primarily, in was introduced to Russia in 2005. It Overall, a total of 2.8 million (mln.) light areas where logistics are a prerequisite is aimed at raising foreign investments vehicles (passenger cars and LCVs up to for localisation and/or low value-added and suggests step-by-step localisation of 3.5 t) make Russia a signifi cant arena for and volumes are a driver. automotive and component production. further competitive development of all In 2005, the government passed a 166 contract (lower import duties global players. With a substantial growth legislation ((commonly known as regu- for components) potential triggered by a still compara- lations (reg.) 166 and 566)), allowing tively low car ownership, very aged car foreign OEMs and suppliers establish- Covenant Old New fl eet and growing consumer fi nancing ing production capacities according Annual >25 ths. >300-350 ths. options, Russia is on the way to become to certain requirements (see Table 1) production no later than the largest European market in the mid- to enjoy zero or signifi cantly reduced (units) 2020 term. Most industry analysts agree that custom duties on a number of compo- Localization >30% within >60% within the market will be close to maturity nents and materials for up to 8 years. ratio 3 years 6 years once the 3.5 mln. new car registration Together with the rapid market growth Engines & No obligations >30% of hurdle is reached. Th is is expected to of 2006 and 2007, this regulation trig- transmissions the output happen by 2015 provided there are no gered investment by the majority of R&D center No obligations Obligatory major global economic shocks. global OEMs: suppliers started follow- Although Russia is often compared ing, albeit at a much slower rate. Locali- SKD Not allowed Up to 5% to its BRICS peers, it has a number sation, however, faced several hurdles: of capacity of distinguishing characteristics that ■ Small capacities scattered in distant 566 contract (lower import duties make it a unique and particular market. areas of production and dedicated for subcomponents) Th e major diff erentiating factors are to manufacturing a wide variety of Covenant Old New the following two: platforms and vehicles, making it dif- Annual Set for engines, No obligations 1. Still a signifi cant net of imported fi cult for component manufacturers production gear boxes and vehicles (especially, where volume is critical (units) drive axles Russia has a well over 30% share of to economic effi ciency) to consider Localization >30%; no > 45% within imported vehicles of its new car regis- an investment; ratio commissioning 5 years trations, while export is insignifi cant, ■ Scarcity of quality materials (e.g. steel period and primarily, to other CIS countries. grade, plastics, etc.) and reliable tier- None of the global Original Equipment 2, tier-3 suppliers; Investment No obligations No obligations

AEB BUSINESS QUARTERLY • Summer 2012 Introduction and General Overview 21 ment Suppliers (OES) are to benefi t fl eet is at about 35 mln.) makes the ■ Automotive glass and mirrors; from much more fl exible rules. country an attractive market for most ■ Painting and coating materials; Th e extension of Reg. 166 led to large OES. ■ Wiring harnesses. the creation of new alliances and also In the meantime, the domestic OES A major challenge remains in the shaped the landscape of the OEMs have evolved to an even more critical following groups: committed to serious investment. stage and very few large independent ■ Power train (engine, transmission, About 400 memoranda of under- players were left. Most have signifi cant drive shafts, diff erentials, etc.); standings were signed with companies fi nancial instability, and therefore, few ■ Chassis, driving axles, suspensions, etc. ; intending to take advantage of reg. 566. options for further development. In ■ Electronics; Some of these have already been con- addition, poor management and qual- ■ Th ermal systems (Heating Ventilation verted to binding investment agree- ity practices, outdated equipment and Air Conditioning (HVAC), hoses). ments, while the rest have the option to lack of R&D capabilities make them a make up their mind by the end of 2013. not so attractive target for investment. Currently, only 13 out of the top 25 Currently, only 13 out of the Domestic OEMs still remain highly global OES have established local top 25 global OES have established vertically integrated. Th erefore, the capacities in Russia. Nevertheless, local capacities in Russia. Neverthe- majority of Joint Ventures (JVs) or many have Russia high on their less, many have Russia high on their other types of partnership opportuni- investment agenda list. investment agenda list. We expect to ties for global suppliers remain with the see further investment in the sector Russian car manufacturers. Finally, in order to make the Russian triggered not only by the legislative Th e following areas have already OES sector sustainable and competi- requirements for localization, but also been localised or have good potential tive, there should be more focus and by the further market development. for local sourcing: eff orts from all stakeholders, including 2011 was a record year in terms of ■ Metal casting, forging and stamping; the government to foster R&D activi- locally produced vehicles. Moreover, ■ Seats and seat systems; ties. Russia has been famous interna- investment commitments by OEMs ■ Interior and exterior plastics (panels, tionally for its high engineering and would increase local capacities to over bumpers, etc.); IT talent. Moreover, there is already 3 mln. units in the midterm. Finally, ■ Batteries; positive experience in similar sectors the sizeable aftermarket (passenger car ■ Tires and wheels; (e.g. aerospace).

International engineering expertise for your automotive facilities in Russia

Royal Haskoning is an independent, multi-disciplinary engineering consultancy firm For further information, please contact with over 130-years’ heritage and experience. The services we provide cover a wide Antonina Firsova, Business Development Manager range and include everything needed to transform strategy into an operating plant LLC Haskoning Consultants, Architects and Engineers or a well-functioning building. Royal Haskoning has an excellent track record in Tel: +7 (495) 739 85 83 Fax: +7 (495) 739 85 84 industrial projects in general and over 50 years continuous experience of working on E-mail: a.fi [email protected] automotive projects globally. We have in-depth knowledge of the particular needs of the automotive industry and have worked closely with many manufacturers to develop cost-effective and robust engineering solutions.

Royal Haskoning has been operating in the Russian Federation since the 1990s and Russian offices have all the required certificates for design and engineering services including the functions of the General Designer. Taking advantage of extensive global expertise we provide high quality services well adapted to the Russian market.

www.royalhaskoning.com Реклама

AEB BUSINESS QUARTERLY • Summer 2012 22 Introduction and General Overview RUSSIA’S ACCESSION TO THE WTO: IMPLICATIONS FOR THE AUTOMOBILE INDUSTRY Maria Donchevskaya, Associate, CMS During discussions regarding Rus- concluded before 31st December, 2011, sia’s membership in the WTO, a set companies that have signed a memo- of rules regulating the procedure for randum with the Ministry of Economic foreign investment in the manufactur- Development of Russia on intentions ing of passenger cars in Russia, based to enter into an investment agreement on Decree No. 166 of the Government will have the right to enter into invest- of the Russian Federation, dated 29 ment agreements on the basis of the March 2005, was especially criticised. indicated preferential customs duties In particular, laws that have been in rates until 31st December, 2013. Th us, eff ect since 1st July, 2011 establish the the possibility of granting privileges idea of an “industrial assembly”, as well for the import of goods to Russia in ith the signing of the protocol as outline the procedure and the condi- exchange for investment obligations is on Russia’s joining the Mar- tions for applying this concept in terms established by law; however, this con- rakesh Accords on the estab- of importing car parts and components tradicts the provisions of the General lishment of the World Trade to Russia. Investment agreements Agreement on Tariff s and Trade. In this WOrganization (the “Agreement on the entered into under these rules are the respect, during negotiations on Russia’s WTO”) on 16th December, 2011, the basis for importing car components accession to the WTO, the European long process of Russia’s acceding to the under the preferential customs duties Union brought forward requirements WTO, which started back in 1993, is rates (0% – 5%). on decreasing the timeframes of active coming to a close. Russia has 220 days Preferences are granted on the con- investment agreements, lowering the from the date the protocol was signed ditions for creating in Russia the capac- level of localisation, and establishing a to ratify it. Exactly 30 days after the ity to manufacture 300,000 new cars uniform rate for customs duties on the ratifi cation, Russia will become a full- per year, or 350,000 cars per year by import of parts and components by fl edged member of the WTO; thereby, modernising existing production. Th e the car manufacturers to Russia. As a assuming all obligations that follow the key requirements for granting these result of the long negotiations, Russia signing of the said Agreement, includ- privileges are attaining a 60% level of has agreed to decrease the timeframe ing all its annexes and amendments local manufacturing within eight years for the preferences to 1st July, 2018 ( as Th is includes all obligations regarding of the investment agreement com- opposed to 2020 as stipulated by the the access to the goods and services ing into force and creating centres of investment agreements), as well as to market and the lowering of tariff rates technological development in Russia. assume the obligation of compensat- on customs duties. In addition to the agreements already ing for any diff erences of the customs One of the main goals of Russia’s strategic development includes the development of the country’s automo- bile industry. Experience over the past few years has shown that the creation of a competitive automobile industry is nearly impossible without the use of foreign technology and capital. A competitive automobile industry also includes the protection of existing investment preferences and avoidance of concessions. Th ese factors both played a signifi cant role during Rus- sia’s negotiations on the conditions of accession to the WTO.

AEB BUSINESS QUARTERLY • Summer 2012 Introduction and General Overview 23 tariff s that arise as a result of this from its budget. With the goal of harmonising Rus- sian legislation on the industrial car assembly with the provisions of the WTO, a transitional period has been established for Russia until 1 July 2018. Th is is supposed to ensure the adher- ence to the conditions of investment agreements already concluded with foreign investors. Th ey will remain in force during this period in order to attain the calculated return for the investment projects already initiated. In terms of importing foreign cars, Russia has assumed the obligations of decrease in imports resulting from and components for car manufacturing lowering the customs duties rates for maintaining the high level of localisation may decrease to 0% – 5%. the import of new cars from 25% to when applying the “industrial assembly” Consequently, signifi cant short- 15%. Russia must attain this level of regime. Compensation is intended to term changes in the regulation of the customs duties tariff s by the end of the be performed through the application car manufacturing industry are not seven-year transitional period that is of a tariff quota mechanism: if the vol- expected. However, once the transi- established for the group of goods. Th e ume of imported components from tional period has expired, the level of most signifi cant changes in the rates Europe decreases by 3% a year as com- protective tariff s for Russian manufac- will be during the fi nal three years of pared to the level in 2010, the European turers will be at a rather low level. Until the transitional period. manufacturers will have the tariff quota that time, Russia is expected to develop Additionally, Russia has agreed to opened in line with the amount of the a stable car manufacturing sector that compensate European manufactur- decrease in the volume of imports, will be able to compete with similar ers of car components for the possible under which the import duties for parts foreign models. Реклама

AEB BUSINESS QUARTERLY • Summer 2012 24 Industry specific aspects THE CUSTOMS ASPECTS OF RUSSIA'S AUTOMOTIVE INDUSTRY Alexander Kosov, Head of Practice Group for Customs and Foreign Trade Regulation, PhD in Law, Pepeliaev Group less than EURO 5000 per unit” should duty for 8707109000 code is 15%, but be excluded. Th is is also confi rmed in not less 2907 Euro per unit. Th ere- the Protocol on the accession of the fore, the specifi c part of the rate is not Russian Federation (RF) to the WTO, excluded, but only decreased that is not to be ratifi ed by the respective Federal in complaince with Russia's obligations Law that envisages the following rates under WTO. for the above mentioned codes: ■ 8707 10 100 0 – 15%; Classifi cation of car bodies ■ 8707 10 900 0 – 15%. Th e Federal Customs Service of Russia A 15% rate with respect to code issued letter № 01-11/56830 of Novem- his article sheds light on issues 8707 10 100 0 “for industrial assembly” ber 22nd, 2011; subsequently, the EEC regarding the customs-tariff and means that Russia (as well as Belarus issued Decision № 8 dated March 15th, international trade regulation on and Kazakhstan, as the members of the 2012, according to which, both car bod- the import of completely-built- Customs Union) cannot establish a rate ies that are fully equipped (i.e. with all upT (CBU) vehicles and components above 15%, but it does not restrict them constructive elements and accessories, required for its assembly. from applying a rate that is lower than such as panels shields, trunk, seats and 15%, up to zero. Th e position of theRF cushions, mats, luggage shelves and Decreasing the import customs duty Ministry of Economic Development is electrical equipment) and those not rate for car body that those eff ective rates that are lower equipped (e.g. without wings, bonnet, Currently, there are two classifi cation than those agreed upon with the WTO doors, elements of the interior, internal codes related to bodies for the motor will not be raised automatically; how- parts and fastening elements, or where vehicles of headings 8703 with the follow- ever, for certain goods, a decision will body upholstery or painting has not ing eff ective import customs duty rates: be made following talks with Belarus been completed) should be classifi ed ■ 8707 10 100 0 – for industrial assem- and Kazakhstan. At the same time, in under the tariff position 8707 10 900 0, bly purposes – 0% our opinion, the risk of increasing the with a 15% import customs duty rate. ■ 8707 10 900 0 – other (i.e. the stan- rates on codes “for industrial assembly” Th e above clarifi cation is based on dard code) – 15% of customs value, is zero. Th erefore, the following rates the Clarifi cations to the Unifi ed Com- but not less than EURO 5000 per unit. will most probably be applied to car modity Nomenclature of International In accordance with the obligations bodies on the date of accession: Trade Activity of the Customs Union, undertaken by Russia as part of the ■ 8707 10 100 0 – 0%; established by Decision № 851 of the EEC conditions for accession to the WTO, ■ 8707 10 900 0 – 15%. dated November 18th, 2011. Before Deci- the rates will have to be reduced to However, according to the Decision sion № 8, some importers tried to classify the level that was in force before 2008. of the Eurasian Economic Commission the above mentioned unequipped car Th e rate “15% of customs value, but not # 54 of 16 July 2012 the rate of customs bodies under the 8708 29 900 9 code, less than EURO 5000 per unit” for the with a 5% import customs duty rate. code 8707 10 900 0 was established by Russian Government Resolution № Scrappage fee 745 of October 10th, 2008 to create a Th e RF Government plans to establish tariff , which makes it extremely dif- a so-called “scrappage / recycling fee” fi cult for companies and individuals to for each car imported into Russia and import disassembled passenger cars, produced on Russian territory. Th e fol- for assembly upon importation; there- lowing offi cial grounds are declared for by, avoiding the 25% import customs the establishment of said fee – the collec- duty rate established for CBU vehicles. tion of funds from car manufacturers and Before this Resolution, the rate was 15% importers to reimburse costs on the recy- of the customs value. Th erefore, at the cling of cars that have lost their consumer date of accession, the rate for code 8707 quality and have been taken out of ser- 10 900 0 should not exceed 15% of the vice, and also compensation for the dam- customs value, i.e. the phrase “but not age to the environment, people’s lives

AEB BUSINESS QUARTERLY • Summer 2012 Industry specific aspects 25 and health infl icted by said vehicles. Th e b. Carry out industrial production and and Trade will be authorised to handle Russian Government proposes establish- assembly, including special arrange- the Register of vehicle manufacturers ing the size of the recycling fee in such a ments on chassis, produced in Russia. that undertook the obligation of further way as to off set the reduction in the rates Based on the above and due to the vehicle utilisation (i.e. the companies, of import customs duties, which should fact that during the initial stage (18 which will not pay the scrappage fee) be performed in connection with Russia’s months for brown fi eld projects and and to state the respective rules for obligations before the WTO. For some 30 months for green fi eld projects) the operating the Register. All manufactur- low-cost models of vehicles, the recy- “industrial assembly” regime makes pos- ers who are not included into the Reg- cling fee may be more than the amount sibility for DKD / SKD assembling, some ister will have to pay the scrappage fee. deducted from the import customs duty. of the manufactures (e.g. Avtotor, ZIL) In view of the above, many experts At the same time, unlike car import- are in the process of negotiations with assess the Russian Government’s plans ers, who will have to pay said fee, man- companies that have signed the Agree- to introduce this fee as a measure that ufacturers that meet specifi c require- ment on “industrial assembly”, with the neutralises Russia's obligations to the ments may, instead of paying the fee, RF Ministry of Economic Development, WTO, with regard to a reduction in cus- offi cially take on the responsibility of but have not implement the rights given toms duties rates for imported vehicles. safe recycling for the vehicles that are under said agreement (currently there Th is is believed to protect the interests of produced by them. Th ese obligations are 9 such agreements). Due to the fact Russian car manufacturers from compe- stipulate that the manufacturer should: that the Russian Government under- tition, which is contradictory to Article 1. At own cost, arrange collection took an obligation not to draw up new III of GATT WTO. Moreover, Belarus points for vehicles that have lost their agreements, this is the only way for such and Kazakhstan refused to introduce consumer quality and have been taken manufacturers to get the right to apply the recycling fee on their territory, but out of service in each city or popula- the “industrial assembly” regime. We according to the Decision of EEC # 55 tion centre within the Russian Federa- believe that the above mentioned con- of 16 July 2012 they will not reduce the tion, where the number of inhabitants ditions and obligations are developed import customs duty rates on motor exceeds a specifi c fi gure, in particular, to exclude the possibility of current vehicles as Russia. Th erefore from the through dealers network (Option 1); or importers evading the scrappage fee fi nancial point of view there should not 2. Sign an agreement with those com- by arranging DKD / SKD assembly in be a diff erence under importation of panies that have the license to carry Russia. Please note that the draft envis- vehicles to Russia directly or through out activities on handling of waste clas- ages that the RF Ministry of Industry Belarus or Kazakhstan. sifi ed from category I-IV in terms of being hazardous (Option 2). Understandably, there may be no company which is licensed to handle waste in each places where collection points should be arranged. Th erefore, if a manufacturer does not have a devel- oped dealers network, arranging col- lection points may require signifi cant costs and eff orts. Th ere are certain requirements that must be met by the manufacturers simultaneously to avoid paying the recycling fee: 1. A manufacturer should be registered on Russian Federation territory; 2. A manufacturer should have the right to issue vehicle passports for the vehicles produced by him; 3. A manufacturer should perform the following operations: a. Assign vehicle identifi cation numbers (VIN) either on car bodies, chassis or on specially produced shields for vehi- cles that are manufactured as follows: I. under the “industrial assembly” regime (Scenario 1); or II. according to the technology that includes welding and painting of car parts and vehicle assembly (Sce-

nario 2); and Реклама

AEB BUSINESS QUARTERLY • Summer 2012 26 Industry specific aspects A SYSTEMATIC APPROACH TO IMPROVING ENERGY EFFICIENCY OF INDUSTRIAL PLANTS Michael Akim, Director of Strategic Development, ABB Russia industry and power utilities is through the identifi cation of the potential for sav- sponsorship of surveys and publications. ings in energy use in both the balance From plant management's prospec- of plant (utilities systems) as well as tive, the primary concern is to look at the the core production process. Th erefore impact on the bottom line; they are obvi- it demand deep understanding and ously aware of energy’s impact on mar- knowledge of industrial processes and gins and the environment. However, if technologies to challenge consumption energy savings get lost in the gargantuan patterns at point of use, reduce wastage budget fi gures, management will not be by eliminating losses, improve the effi - able to see the net benefi t. Instead, look at ciency of generation. Along with tech- energy as a raw material used to produce nical projects it would involve organi- Summary a unit of product, or deliver a particular zational, eff ective energy management Industrial companies and power service. For the most energy-intensive actions to motivate the potential in the utilities are among the largest users industry, the saving could be very evi- organization to identify, deliver and of energy and are, therefore, among dent, for example: up to 30 percent of keep energy savings, eff ective commu- the most sensitive to the need to be cement factory’s raw materials go for nication and sharing of energy infor- more effi cient. In no other area are so energy supplies – and if you can reduce mation, skilled and motivated staff . few players capable of making such a that amount by 20 percent (which is Th ere is a set of common solutions big diff erence. Practice shows, how- doable by complex approach) – that and tools for savings that are relevant ever, that it can be diffi cult even for could provide the direct EE benefi t of 6 and useful to most industrial plants: energy intensive businesses to capture percent in the bottom line. Globally, the ■ Electrical energy savings by variable the opportunities, to justify spending, energy-intensive industry actively pur- speed drives; with a lack of information, expertise sue for new technologies to reduce its ■ Implementation of more energy effi - and funds being common barriers to energy footprint. For chemical industry, cient electric motors; faster deployment of energy-effi cient for example, these include process inten- ■ Electrical energy savings by reducing technologies. Previous experience in sifi cation, combined heat and power harmonics and improving the power applications of those technologies is systems, modern catalysis, and carbon factor; critical, as well as a benchmarking study capture and storage. Also a point for ■ Burning optimization by reducing to compare the conditions of the plant consumption within the power plant, the fuel demand; with similar ones globally. Th e imple- so far an area where effi ciency has often ■ Fuel mix optimization when dealing mentation of energy optimization stud- been overlooked. with alternative fuels; ies in Russia would typically also require Customer wishes to minimize ■ Electrical energy cost optimization the completion of Russian mandatory energy consumption at the plant site by load scheduling; “energy passport” audit in accordance and so increase the profi tability of the ■ Recovery of waste heat; with the federal law. It’s important to operation. Typically, as a fi rst step in ■ Air, steam, heat distribution control, fi nd some synergy, to defi ne the optimal this process, customer wishes to assess loss prevention monitoring; combination between Russian manda- energy consumption and energy man- ■ Technology analyses and process tory “energy passport” audit and energy agement practices at the plant in order optimization – could be the most study, in accordance with international to identify and prioritize energy saving important one. practices, to prepare a business case to opportunities. Th is will in then allow Signifi cant energy saving could be justify spending, in accordance with the plant to develop and execute a port- achieved through the implementation of international standards and procedures. folio of realistic energy saving projects. medium voltage (MV) and low voltage (LV) drives: the industry uses 50% of all Introduction Tools for energy effi ciency electricity, of which 65% is for electric One way of creating awareness about the improvement motors, and up to 70% of Conventional importance of using energy more effi - Systematic approach to energy effi - motor energy can be saved by varying the ciently and the opportunities that exist for ciency for industrial plants requires motor speed to the actual need for ener-

AEB BUSINESS QUARTERLY • Summer 2012 Industry specific aspects 27

Ручная Автоматическая, с использованием АРС Оптимизированное ■ заданное значение corporate “Technical Policy” to Выгоды Оптимизация вследствие оптимизации defi ne all technologies and develop-

Значение, заданное вручную High Стабилизация ment trends for the company. efficiency Время Process Th e expert approach to energy effi - motors optimization ciency studies of Industrial plants, and one adopted by leading companies in Burning this fi eld, including ours, consists of a optimization three phase methodology and accom- panying tools and techniques that have variable speed been developed over several years, drives working with clients on sites that have a range of energy consuming processes. Recovery of waste heat Each step of the Industrial Energy Effi ciency methodology aims to deliver Energy management, precisely the information needed to load scheduling enable the company to move forward gy. Today only 5% of the world’s motors with confi dence and eventually com- are fi tted with energy-saving drives. A comprehensive modern approach plete a programme of improvements Th e implementation of these ener- for energy and environmental that will deliver real and sustainable gy saving solutions could further sup- services should provide access to energy savings. port production and quality improve- best global experience cases for Opportunity Identifi cation study is ment. Completing an implementation benchmarking. To be competitive the fi rst phase of in this methodol- program for all of those items would in global environment customers ogy for improving Industrial Energy require prioritization and fi nancial jus- need to improve sustainability Effi ciency that aims to identify specifi c tifi cation for all of those projects. by improving resource effi ciency, opportunities to deliver improvements, limiting environmental impact and by understanding how and where ener- Energy effi ciency study complying with environmental gy is used, by identifying areas of waste Th ere are number of levels and legislation. and by comparing current perfor- approaches of energy effi ciency studies: mance with established best practice. ■ implementation of particular equip- Energy Management Master Plan is ment, such as motors and drives in such as “Energy Passport” in accor- the second stage, when the opportuni- technology processes; dance with Russian federal law #261; ties indentifi ed in the previous phase ■ energy audit that based on particular ■ complex energy effi ciency plant are developed into a detailed imple- defi ned measurement procedures, studies (as defi ned briefl y below); mentation plan to deliver the savings.

Industrial Energy Efficiency Approach

Screening Identify Energy Management Implementation Opportunities Master Plan

Business Fit Benchmark Detailed studies Programme Confidentiality Savings potential System / Equipment implementation team Agreement Priority areas for Quick wins Mobilise resources energy savings Measure and agree baseline Energy programme List of projects with savings manager Energy Management per project Implement improvement Utility Optimisation Implementation plan projects Process Optimisation Activities Measure and validate Energy Purchasing Cost savings Who Net savings gained and Verification shared Supply chain (preferred vendors) Investment programme Net savings model

AEB BUSINESS QUARTERLY • Summer 2012 28 Industry specific aspects

Th e plan takes the form of a suite of By assessing each of these com- Th e Initial Assessment stage of the improvement projects, each with well ponents, consultants should be able analysis seeks to identify any signifi cant understood benefi ts and benefi t veri- to describe the nature and scale of patterns or long-term trends in the fi cation methods, costs, implementa- the energy saving opportunities at the data, and through this to gain an insight tion method, technology options and industrial plant site and make clear into the major improvement oppor- potential vendors. recommendations about what further tunities so that the activities during Implementation is the third stage steps to take to realize the potential the site visit can be focused accurately that target to the projects implementa- benefi ts. Th e assessment based on a and eff ectively. Any supplementary tion and completion, directly by the review of the data provided by the site, questions identifi ed during this Initial customer or with the further support including historical data and drawings, Assessment are compiled by consul- of our team. calculations, visual observations and tants and issued to the customer Site interviews with site personnel. Site data Team before the visit. Upon comple- Industrial Plant Study Scope should be benchmarked against best tion of the Initial Assessment the fi nal Th e proposal outlines off er to carry out similar plants worldwide, it’s particu- scope for the site visit and any immedi- an energy Opportunity Identifi cation larly important for competitiveness of ate actions are confi rmed. study at the industrial plant, to iden- the plant when Russia enters the WTO. Th e consulting teams visit the site tify and prioritize the available energy to review the physical condition of the saving opportunities. Th e Opportunity Each step of the Industrial Energy assets, confi rm the data provided, vali- Identifi cation study follows a standard Effi ciency methodology aims to date and develop the fi ndings of the pre- process but is often tailored to meet deliver precisely the information liminary assessment and resolve incon- site specifi c requirements. needed to enable the company to sistencies or fi ll gaps in the information. Typical industrial plant study move forward with confi dence and A kick-off meeting is held at the should include the following elements; eventually complete a programme site, with the participation of the plant’s however the detailed scope may be of improvements that will deliver personnel and a consulting team, with adjusted during the course of the study real and sustainable energy savings. global relevant experience. After the depending on what is discovered: introductions, the plant personnel pro- ■ Assessment of Energy Management vide a general description of the site Practices; Study Activities and Stages systems and operations and highlight ■ Identifi cation of typical Site Energy Th e study follows the globally proven any known issues. Th e team conducts Demands (Electricity, Primary Fuel procedure that enables one map the interviews with the key site personnel & Steam); production, distribution and use of to review the individual site systems ■ Identification of Energy Saving energy and utilities across the site and in detail, including demand, capaci- Opportunities within: analyze this information to confi rm the ties, operation, condition, issues, per- – Utility Systems (refrigeration, air opportunities for improvement and the formance metrics, etc.; and to under- compressors and boilers); likely value range of each opportunity. stand the scope and eff ectiveness of – Process Energy Consumption; At the start of the study, the pre-work any energy management systems and – Review of Energy Purchasing & questionnaire should be completed by practices which may already be in place Export Agreements. plant personnel as fully as possible. at the site. Plan performance improvement

Identification Assessment Solutions Solutions ROI & KPI’s Improvement Check & continuous of Subject definition design identification action improvement

- Check-up Identifying Technical and ROI identification Project ROI check / - Flash Audit solutions for technological scheduling analysis - Feasibility improvement proposal Economic Project financing Training Study Project plan proposal Project execution Continuous Determine Budget improvement I Identifying the improvement identification Establish potential of actions and Identifying common energy efficiency strategic funding definition for ”GAP analysis vs decisions opportunities measurements benchmark” and conditions Implement measurement system

AREAS OF INTERVENTION

ORGANIZATION RELIABILITY PROCESS ENERGY PRODUCTS SYSTEMS (EnMS) (RAMS) TECHNOLOGY CONTRACTS

AEB BUSINESS QUARTERLY • Summer 2012 Industry specific aspects 29

Th e consulting team tour a site Th e report will summarize the and techniques developed by global with a plant representative, including a opportunities for improving energy team of Energy Consultants, Process visual survey of the site operations and effi ciency which are identifi ed by the Engineers and Technical Specialists systems; it may request and analyze study and prioritize them by compar- with the broad variety of technical and further data during the assessment, if ing the potential benefi ts with the business expertise. It includes broad necessary, to help confi rm or identify likely cost and complexity of imple- portfolio and variety of energy effi cien- opportunities for energy savings. mentation. Th e Energy & Utilities Map cy solutions for various industries, for Th is in joint eff ort between plant will show how energy consumption example production rate and recovery personnel and our consulting team: is distributed across the plant or pro- factor improvement for pipeline solu- commonly, the team holds a daily cess areas and equipment covered by tions of oil and fas (O&G) systems; for debriefi ng with the plant’s site per- the study, as a means to identifying open-pit and underground coal min- sonnel to review the day’s fi ndings. It improvement opportunities. ing, cost and effi ciency; for transport includes a wrap-up session at the end applications, both increase effi ciency, of the site assessment. Th e wrap-up The implementation of energy and many other industrial applications. session will summarize the Site Assess- optimization studies in Russia would A comprehensive modern approach ment activities and, if possible, identify typically also require the completion for energy and environmental services any Quick Win Opportunities. of Russian mandatory “energy should provide access to best global After completion of the site visit passport” audit in accordance with experience cases for benchmarking. To phase, the consulting team will com- the federal law. be competitive in global environment pile all the assessment data and infor- customers need to improve sustainabili- mation and identify the key areas ty by improving resource effi ciency, lim- where improvements can be made. Th e level of defi nition of the Energy iting environmental impact and com- Th e Opportunity Identifi cation Study & Utilities Map will be very dependent plying with environmental legislation. Report will detail the results of the on the availability of plant performance We should work together, utilizing study, including an assessment of the and utility consumption data. best global experience to adapt best site utilities systems, site consumption Th is approach require broad knowl- global practices. Money paid for wast- patterns and benchmark of existing edge base and comprehensive analysis ed energy just goes up the smokestack, energy costs. of the acquired process data using tools never to be recovered. Реклама

AEB BUSINESS QUARTERLY • Summer 2012

Реклама 32 Networking AEB FLAGSHIP CONFERENCE “NEW REALITIES – NEW CHALLENGES”

Reiner Hartmann, AEB Board Chairman opened the annual AEB Flagship Conference, held on the 23rd of May, 2012, by welcoming all those present. Moderated by David Gray (PwC), the opening session was dedicated to the Russian Post-Electoral Landscape. Speaking about risks and opportunities for the Russian econ- omy in 2012, Natalia Orlova (Alfa Bank) pointed out that Russia’s economic recovery is still driven by consumption Reiner Hartmann, AEB Board; David Gray, PwC; Natalia Orlova, Alfa Bank; Thomas Gomart, IFRI and Hans- growth, while investment growth lags and accelerated only Joachim Spanger, Peace Research Institute Frankfurt in the last two quarters. Demand for local production has Hans-Joachim Spanger (Peace Research Institute Frank- weakened, and the 4.7% increase in industrial production in furt) pointed out that the central dilemma of democratic 2011 translated into strong growth in inventories, accounting governance in emergent market economies is how to retain for 68% of the gross domestic product (GDP) growth, which the advantages of a strong executive authority required when was close to 66% in 2010 and substantially above pre-crisis implementing market reforms and responding to economic levels. In 2011, the Russian Cabinet decided to increase social crises, while at the same time, providing the institutional tax, collecting an additional $30 billion (bln) for the budget checks and balances that guarantee accountability and over- and putting $27 bln in the reserve fund. Th e ratio of pension- sight. One of the important factors of the Russian post-elec- to-average salary stabilised at 36%, in the last two years. Th e toral landscape is the emergence of the middle class or the need to control the breakeven oil price will lead the Cabinet “prosperous protestors”. Th is begs the question “Is the middle desisting from further increasing pensions: in 2011, the Cabi- class really the decisive force of change?”. So far, all indicators net reduced the Pension Fund defi cit to 2% of the GDP from show that this is probably not the case, as today, this group is 4-5% of the GDP in previous years. Despite capital outfl ow, considered much more risk-averse and its members usually corporate foreign debt grew $51 bln in 2011. show greater interest in social stability.

Victor Khristenko, Eurasian Economic Commission Konstantin Kosachev, Rossotrudnichestvo Reiner Hartmann; Chairman AEB Board Philippe Pegorier, Alstom Russia While talking about Russia’s position on the international “New Geo-Economic Realities. What does it mean for the market, Th omas Gomart (French Institute of International Business?” was the session to follow, which was moderated by Relations) identifi ed the infl uence of two powerful ferments: Dr. Frank Schuff , AEB CEO. Victor Khristenko, Head of Eur- internal contestation, which traduces the fundamental evolu- asian Economic Commission talked about Russia’s accession tion of relations between individuals and institutions (this phe- to the World Trade Organisation (WTO) and Eurasian inte- nomenon is observed not only in Russia) and secondly – the gration as a whole. Mr. Khristenko said that WTO accession economic crisis in Europe, which modifi es the world geo-econ- and Eurasian integration were parallel processes, with the omy. Among important factors, both in short and mid terms, crisis being a major catalyst of the witnessed regionalisation. he identifi ed the euro zone crisis; fast moving international He said the trade structure between the three member coun- conditions – with Libya, Syria and Iran as important factors; tries of the Customs union (Russia, Belarus and Kazakhstan) importance of bilateral relations with regard to the EU; China’s is more balanced than the relations each has individually with role and growing importance of BRICS and the Shanghai other countries; it is less subject to the infl uence of market Cooperation organisation. Russia, he said, will try to assume prices. He then talked about the Eurasian economic commis- the leading role in the energy sector worldwide, while increas- sion, which makes all the decisions on internal and foreign ing her military expenses, which is in contrast to the steps that markets’ access, saying that the work on forming the com- will be made by the European countries – to decrease military mon economic space should be fi nished to 2015. Th e goals to expenses. In the long term, Russia’s demographic indicators be achieved, Mr. Khristenko said are real and pragmatic – to must also be taken into account. In conclusion, Mr. Gomart said create the common market governed from the common cen- that global digital governance would have a growing infl uence. tre, with clear, transparent rules for the investors. Each coun-

AEB BUSINESS QUARTERLY • Summer 2012 Networking 33 try should correct its own legislation. Th e single economic Th e fi nal session was devoted to the experiences of AEB space between the Russian Federation (RF), Belarus and member companies doing business in Russia and was mod- Kazakhstan should guarantee four types of freedom – free erated by Jon Hellevig, member AEB Board and Managing movement of goods, services, capital and labour force, and Partner, Awara Group. Reasons given by Philippe Pegorier, harmonise and unify the norms and standards within key member of the AEB Board and President, Alstom, Russia sectors. He then stressed on the importance of coordinated for choosing to invest in the country were economic and macroeconomic policing. In conclusion, Mr. Khristenko fi nancial stability. Th e Russian Federation’s GDP growth rate informed AEB members that an advisory business council is at about 4%; it has the 3rd largest gold and hard currency would be created, unifying the experts and business repre- reserves in the world and the balanced budget infl ation at sentatives. “We count on your active cooperation”, he said. 6%. Mr. Pegorier, however, admitted that oil prices played a In his speech Konstantin Kosachev, Head of Rossotrud- major role with regard to these indicators. Jaron Wiedmaier, nichestvo, talked about the activities of Rossotrudnichestvo, General Director, Сontinental Tires Rus then went on to talk with regard to research and innovative cooperation, inform- about Russia’s automobile industry, saying that the country ing those present that an international programme, promot- has the only fast growing large car and tires market in Europe; ing innovative cooperation between the CIS countries until although, he said, industry modernisation via foreign invest- 2020 has been signed and is currently being implemented. ment, localisation of production, adoption of innovative Th e programme is being coordinated by the Skolkovo foun- technology etc, is crucial for facing successfully the upcoming dation, which oversees all matters pertaining to its fi nancing, competition from other countries. Representing the banking intellectual property rights (IPR) protection and commer- sector, Raj Tanna, Chief Operating Offi cer, Deutsche Bank cialisation of the results. Russia & CIS said that if Moscow succeeds in becoming Concluding the this session, Chris Weafer (Troika Dialog) an international fi nancial center, it will have a very positive said that WTO membership would certainly have no imme- impact on the investment climate, which still needs more diate impact on economic growth, the day-to-day operations transparency, good corporate governance and healthy com- of Russia’s corporations, or on the risks faced by premium petition on the part of the Russian companies. Mr. Tanna also investors. Likewise, he said, WTO membership will not off er said that appropriate measures should be taken to ensure that an opportunity for a quick fi x to the generally poor business investment risks are hedged. Mr. Tanna concluded his pre- environment or the high level of investor skepticism toward sentation by talking about the HR sector, saying that the suc- investment. However, he said, WTO membership will act as cessful presence of foreign companies in Russia depends to a a major catalyst of economic reform and industry develop- large extent on the availability of qualifi ed personnel. Foreign ment: Russia’s decision to actively pursue this membership companies need people with the right skills, knowledge and

Jaron Wiedmaier, Continental Tires Rus David Gray, PwC Natalia Orlova, Alfa Bank Jon Hellevig, Awara Group is a clear indication of the governments commitment to market expertise. One of the diffi culties currently faced by improving the overall situation in the country, with regard to foreign companies is in the area of personnel retention. Th e foreign investment and the overall economic status. WTO survey on strategies and prospects of the AEB member com- entry, he said, creates a framework that is in line with the gov- panies in Russia was presented by Alexander Demidov, Gfk ernment’s agenda for greater economic effi ciency and diver- Rus International Institute of Marketing & Social Research. sifi cation. Th ere are no major surprises in the agreed-upon In all, the AEB Flagship conference was a huge success terms: Russia has secured a lengthy compliance period with and the Association would like to thank the event’s sponsors: respect to tariff changes aff ecting the most sensitive areas, Mercedez-Benz (Platinum sponsor); Telenor group (Gold such as auto manufacturing and some agricultural issues. Th e sponsor); Imperial Tobacco (Gold sponsor); Alstom (Silver average import tariff will be cut from 10% to 7.8%. sponsor) and Awara group (Silver sponsor).

From L-R: Reiner Hartmann, Chairman AEB Board; Victor Khristenko, From L-R: Jon Hellevig, Awara Group; Philippe Pegorier, Alstom Russia; Eurasian Economic Commission;Dr. Frank Schauff ; Konstantin Kosachev, Thomas Gomart, IFRI and Hans-Joachim Spanger, Raj Tanna, Deutsche Bank Russia & CIS; Jaron Wiedmaier, Continental Rossotrudnichestvo and Chris Weafer, Troika Dialog Peace Research Institute Frankfurt Tires Rus and Alexander Demidov, Gfk Rus

AEB BUSINESS QUARTERLY • Summer 2012 34 Networking NETWORKING

From L-R: Antonio Linares, ROCA; Erik Helin, Specta Group; David Thomas, Volvo Cars Russia; Gerald Sakuler, BENE Offi ce Furniture; Roger Munnings, Individual Member; Marco Koschier, Deloitte; Frank Schauff , AEB; Don Scott, OPIN; Ruslan Kokarev, AEB and Reiner Hartman, Chairman of the AEB Board

AEB ANNUAL GENERAL MEETING ■ Ketting, Jeroen – On the 19th of April, 2012, the Annual General Meeting Lighthouse Russia B.V (AGM) of the Association of European Businesses took place ■ Munnings, Roger – at the Swissôtel Conference Centre. 331 Companies took part Individual Member in the voting process for the election of the AEB Board, AEB ■ Pegorier, Philippe – General Auditing Commission and AEB Committee Chairpersons. We Director Alstom would like to congratulate them all on their successful election. ■ Sakuler, Gerald – Bene At this occasion the following new Board Members were Offi ce Furniture AG, elected: Austria Reiner Hartmann, Chairman of the AEB Board ■ Bantsekina, Olga – Coleman Services UK Ltd ■ Vertanen, Vesa – Itella Logistics ■ Becker, Christian – HeidelbergCement RUS Th e meeting was followed by a reception. We would like ■ Hartmann, Reiner – Ruhrgas AG to thank the sponsor of the reception: Awara Group and all ■ Hellevig, Jon – Awara Group the companies that took part in the General Assembly.

From L-R: Vesa Vertanen, Itella Logistics; Roger Munnings, Individual Member; Philippe Pegorier, Alstom; Olga Bantsekina, Coleman Services; Gerald Sakuler, BENE Offi ce Furniture and Christian Becker, From L-R: Don Scott, OPIN; Ruslan Kokarev, AEB; Frank Schauff , AEB HeidelbergCement RUS

Meeting on Bashkortostan ited an innovative company PECM Industrial, which special- On the 12th of July, 2012, an AEB Delegation consisting of AEB ises in the production of environment friendly electrochemi- CEO, Dr. Frank Schauff and AEB Director of External Aff airs, cal machines for manufacturing of parts from a wide range of Svetlana Lomidze met with the President of Bashkortostan, metals, alloys, metal-ceramics and nanostructure materials. Rustem Khamitov. At the meeting a decision was reached to establish business relations between Bashkortostan and the AEB. Th e fi rst step will be a presentation on the Republic of Bashkortostan that will be organised for the AEB members in autumn of 2012. A business mission will most likely follow at the end of the year or in January, 2013. Mr. Khamitov pointed out that there are several advantages to investing in Bashkor- tostan: transparent and open legislation, serious infrastructure facilities and qualifi ed personnel. Th e Minister of Economic Development E. Mavrin and the Head of Presidential Admin- istration V. Balabanov were, likewise, present at this meeting. Th e AEB delegation was also received by the Vice-President From L-R: Svetlana Lomidze, AEB; Dr. Frank Schauff , AEB CEO and Rustem Khamitov, President of of the Chamber of Commerce and Trade A. Fazlyev and vis- Bashkortostan

AEB BUSINESS QUARTERLY • Summer 2012

36 Networking

AEB – Danish Euro-Reception It was on the 31st of May, 2012 that the Danish Ambassador to Russia, H.E. Tom Risdahl Jensen, hosted the AEB – Dan- ish Euro-Reception at his residence. Th e event was held on the occasion of the Danish Presidency at the Council of Th e European Union in the fi rst half of 2012. Th e theme of the reception was Green Growth – one of the Paul Bruck, Most Service; Susanne Frewein- Tom Risdahl Jensen, Ambassador of Denmark and Kazakbaeva, New Century Cleaning and Dietmar four priorities of the Danish EU Presidency. Th e Danish ambas- Dr. Frank Schauff , AEB CEO Fellner, Embassy of Austria sador in his speech highlighted the important role the EU and European business can provide as partners for Russia in pro- moting sustainable development. He mentioned a number of initiatives taken by Denmark internationally to promote a more responsible growth pattern, such as the Global Green Growth Forum Summit, scheduled to take place in Copenhagen on 9th and 10th October, 2012. He also touched upon Danish activi- ties in Russia to increase energy effi ciency, including the “Green Capacity” initiative. Likewise, at the reception, Dr. Frank Artyom Kursakov, Volkswagen Group Rus; Elena Aage & Julia Nielsen, Vitus Bering Management; Schauff , AEB CEO talked about the role a business-to-business Rothman, AEB and Olga Zueva, AEB Jens Perregaard, Haldor Topsoe A/S cooperation can play in “greening” the Russian economy.

Andrey Leimann, Businessland Services; Jaime Faus, Novotel Moscow Center and Jesper Henriksen, Samantha Olz, Lighthouse Group, Alexander Bychkov, INVESTMENT COMPANY IC RUSS-INVEST and Radisson Royal Hotel Svetlana Lomidze, AEB

Bo Wallenberg, Thost Russia Projektmanagement; Jon Hellevig, Philippe Pegorier, Alstom Russia and Igor Reichlin, Awara Group; Lena Sjoblom, Embassy of Finland and Denos Panov, Guests at the reception Reichlin & Partners Human Search

Lunch with EC DG for Research and In this context, Mr. Smits was very interested to discuss Innovation, Mr. Smits with and learn from European industrialists based in Russia On 5 July, 2012, the AEB had a lunch meeting with Mr. about their experience with regard to bilateral cooperation Robert-Jan Smits, European Commission Director-General and joint undertakings with particular emphasis on research, for Research and Innovation. Mr. Smits’ fi rst visit to Moscow technological development and innovation. Mr. Smits also was the occasion to concretize the establishment of a strate- gic partnership for research and innovation. Th e concept of a strategic partnership for research and innovation stems from a meeting between the EU Commis- sioner for Research, Innovation and Science, Maire Geoghe- gan-Quinn and the Russian Minister for Education and Science, Andrei Fursenko on 24 February 2011 in Brussels, held as part of the visit of the Russian Government to the Commission. It was agreed during this meeting to develop such a strategic partnership, to build on the strong history From left to right: Markhulia, Mamuka, Chairman of the AEB IT-Telecom Committee, Tele2; Ketting, Jeroen, Member of the AEB Board, Director, Lighthouse Russia BV; Schauff , Frank, CEO, AEB; Bobro, Rita, of successful cooperation and expand the scale and scope of Director, Merck Russia; Bykov, Alexander, Chairman of the AEB Health & Pharmaceuticals Committee, bilateral collaboration. NovoNordisk

AEB BUSINESS QUARTERLY • Summer 2012 Networking 37

has a strong interest in risk-fi nancing / venture capital investment in research and innovation, and public-private partnerships (PPP). Th is meeting was also meant to help him understand from European managers based in Russia how best to prepare for a benefi cial EU-Russia strategic partnership in research and innovation and what are the current hurdles currently met by the European industrial- From left to right: Hallen, Manuel, Head of the STTEE Section, EU Delegation Moscow; Bochereau, Laurent, Head ists in this context. of Unit ÓInternational Cooperation Policy, DG Research & Innovation; Smits, Robert-Jan, Director-General, DG Research & Innovation; Penny, Martin, Assistant to Director-General, DG Research & Innovation; Vittet-Philippe, For more information, please contact Marie Rondelez, Patrick, Policy Offi cer on Russia and Japan, DG Research & Innovation Adviser on EU Aff airs.

AEB SUMMER COCKTAIL On 2 July, 2012 the AEB invited its Members to take part in its traditional Summer Cocktail. Th is time, the event was hosted by our partner, Hotel Baltschug Kempinski Moscow in its newly renovated premises. Our guests enjoyed the special programme prepared by our Events Team that included among others live music from the Jazz Manush Trio leaded by Sergey Uryupin at the guitar, the performance of our Spanish Flamenco Dancer Javier Malaguilla and an exhibition by the Spanish artist Ima Montoya. We would like to thank the two sponsors of the event, Agro-Chemie and Awara Group for their support, the companies that took part in the lot- tery, more particularly Hediard, Ferrero and Nova- ya Opera, our alcohol sponsor, Khortitsa as well as Alexander Merzlyakov, Dupont; Ruslan Kokarev, AEB and Desloges Julia, the Cultural Attache of the Spanish Embassy, Mr. HR Partners Alberto Castro Martínez. Dancer Javier Malaguilla

From L-R: Cuneyt Taskin, MAGNET LLC; Lavlish Taneja, YIT Elmek; Julia Desloges, RH Partners and Jamshed Yusupov, DEGA AG Guests Guests at the event

From L-R: Stuart Lawson, Ernst & Young; Tony Brenton, former UK From L-R: Juerg Zehnder, Detecon International and Jacobine From L-R: Artist Ima Montoya and Alberto Castro Martinez, Embassy Ambassador and Odd Per Brekk, IMF Janucek, EDF of Spain

From L-R: Guilluame Durand, EU Delegation; Jon Hellevig, Awara Group; Dr. Frank Schauff , AEB; From L-R: Makar Kuznetsov and Anna Illarionova, Enel OGK 5; Svetlana Lomidze, AEB and Andrey Mukhin, Guest and Roland Honekamp, EU Delegation Statoil ASA

AEB BUSINESS QUARTERLY • Summer 2012 38 AEB Committee Updates AEB COMMITTEE UPDATES Energy Committee The 10th Russian Petroleum & Gas Congress On 26th and 27th June, 2012 the AEB Energy committee the Gas day, Mr. Hartmann moderated the session on “Key members participated in the 10th Russian Petroleum & Gas aspects of gas transportation, processing and exporting”. Dur- Congress. Mr. Reiner Hartmann, the AEB Board and Energy ing this session Olga Rumyantseva, an active Energy commit- committee Chairman, as well as Andrey Mukhin, his Deputy, tee member, Executive Director of Gasunie representation in were once again part of the Congress Programme commit- the Russian Federation, gave a presentation on the innova- tee, a role they have played for several years running. During tions in gas that are focused towards a low carbon economy. Mr. Ivan Grachev, the Chairman of the Russian Federation State Duma committee on Energy meets with members of the AEB Energy and Energy Effi ciency committees Mr. Ivan Grachev, the Chairman of the Issues discussed included the Rus- amongst others. Mr. Grachev respond- Russian Federation State Duma com- sia EU relations in the Energy sector. All ed to questions posed by those pres- mittee on Energy met with members of parties present reaffi rmed their mutual ent. All parties agreed that coopera- the AEB Energy and Energy Effi ciency commitment to a common energy tion should be intensifi ed and experts committees on the 10th of April, 2012. space and productive relations between should be invited to participate in the From small and medium businesses to legislators and business representatives State Duma working groups on energy. multinational corporations, the AEB in Russia. Th e business discussion that Th e Chairman of the AEB Board and unites over 600 companies from the took place raised burning issues such as Energy committee, Mr. Reiner Hart- EU and EFTA member states, operat- the liberalisation of the gas market, the mann thanked Mr. Grachev on behalf ing in Russia. Seasoned in nature, the third energy packet, renewable sources of all those present for coming to the AEB committees have long maintained of energy, laws on energy effi ciency and event, expressing his enthusiasm with an impressive working relationship electricity, relations between producer- regard to similar events being held in with the State Duma. countries and consumers of energy, the future.

Event’s participants Event’s participants Event’s participants Energy Efficiency committee Speed dating event Th ose looking for the latest innovative solution to: ■ Save Energy? ■ Increase your Quality of Energy? ■ Finance your Energy Effi cient Investment? ■ Decrease your Operating Expenses? ■ Improve working conditions and increase life expectancy of your investments? ■ Meet your “Green” objectives assigned by your share- holders, managers and / or customers? Found what they were looking for at the AEB Energy Effi ciency Committee Speed Dating event, held on July 5th, 2012. Event’s participants Within an innovative “straight to the point” 10 minutes Present were leading western companies successfully oper- format, members companies got a chance to enlighten each ating in Russia in the fi eld of energy effi ciency – from ESCO other about their solutions to various Energy Effi ciency (fi nancing) and project management to material and building burdens. suppliers.

AEB BUSINESS QUARTERLY • Summer 2012 AEB Committee Updates 39

Th e event was sponsored by Fenice Rus, Legrand and Lighthouse Group.

Event sponsors and Energy Effi ciency Committee management – Vincent de Rul, Fenice Rus; Serge Event’s participants Vignerie, Legrand and Jeroen Ketting, Lighthouse Group Event’s participants Finance and Investments Committee Open meeting with Rusnano, RDIF and Skolkovo Foundation, May 22, 2012 On May 22nd, 2012, the AEB Finance & Investments com- Russian government sponsored initiatives available to Euro- mittee held an open meeting chaired by the newly elected pean businesses to encourage increase of investments and Head of the committee Stuart Lawson. During the meeting innovations. With over 20 billion dollars at their disposal, Dmitriy Lisenkov, Managing Director of Rusnano, Richard these three funds intend to partner with private companies, Ogdon, Director of the Russian Direct Investment Fund, to direct these fi nancial resources towards investment into and Ian Humphery-Smith, Director – International, Key various economic sectors and infrastructure within the Rus- Partners, Skolkovo Foundation, briefed the audience on sian Federation. Health and Pharmaceuticals Committee Meeting with Mr. Nizhegorodtsev Th e AEB Health and Pharmaceuticals committee had a meeting with Timofey Nizhegorodtsev, Head of the Department for control over social sphere and trade, Russian Federation Federal Antimonopoly Service, at the offi ce of the Federal Antimo- nopoly Service on July 4th, 2012. Present at this meeting were representatives of Novo Nordisk, Ferring Pharmaceuticals, Alcon, Merck, Stada, Teva, Esparma GmbH, Servier, Boiron, Orion Pharma and the AEB Health and Pharmaceuticals committee coordinator. At the meeting, the following issues were discussed: the harmonisation of the Russian and European regulatory systems in the healthcare and pharmaceutical fi elds, including drug healthcare policy-related issues – essential drug list formation, treat- ment standards, and developing Good Manufacturing Practice standards for the pharmaceutical industry in Russia. Th e committee and Mr. Nizhegorodtsev agreed to continue discussions on these important issues related to the pharma- ceutical industry and healthcare in Russia. HR Committee Ninth Annual HR Conference Th e Ninth Annual HR conference acquisitions, expansion in the regions session by giving a general overview of organised by the AEB HR commit- and other aspects of personnel man- the HR situation as it stands today in tee was dedicated to HR Flexibility in agement in Russia. Russia. Sergio Ezama, Senior Vice Presi- the сhanging environment. Th e event, Olga Bantsekina, Deputy Chair- dent HR, PepsiCo then talked about which took place on the 17th of May, man, AEB Board; Chairman, AEB HR managing and retaining talent in chang- 2012 focused on HR effi ciency and committee and Chief representative, ing environments. Seventy fi ve million fl exibility, HR issues in mergers and Coleman Services UK opened the fi rst baby boomers are nearing retirement;

Sergio Ezama, Senior Vice President, HR, PepsiCo Dr. Frank Schauff , AEB CEO

AEB BUSINESS QUARTERLY • Summer 2012 40 AEB Committee Updates

Olga Bantsekina, Deputy Chairman AEB Board; Chairman, AEB HR committee and Chief Representative, Coleman Services UK Q&A session however, there are only 30 million gen- Th e Business Leaders’ panel discus- cial programmes. Other speakers includ- eration X-ers to fi ll the soon to be sion that followed featured CEOs of ed Philip Rybakov, HR VP JTI Marketing vacant positions, he said. Talking per- major companies, who were invited to and Sales, Russia; Karina Strashnenko, centages, he went on to mention that share their views on the role of the HR Senior HR BP, Unilever; Ruxandra Stoian, 58% of multinational companies lack departments in their respective compa- Partner, PwC; Tamara Petoyan, HRD, talent for critical leadership positions. nies, the HR challenges in Russia and Alliance Healthcare Russia and Tatiana Closing, he talked about the interde- the way companies adapt their global Tikhonova, HR Director, Partner Troika pendence between talent acquisition strategies to the local market. Edward Dialogue (Sberbank Group). and management, he also stressed sev- Stanoch, Eastern European Director, Very well attended, once again, the eral points: talent management must Aon Hewitt and Gyuzel Garaeva, HR annual HR conference was big success be handled much more as science not Director, OBI Russia spoke about ways and brought together top experts within just art; it must be owned by all, while to translate employee engagement into the HR sector, amongst others. Th e AEB driven by the CEO and it requires cour- outstanding business performance. Nav- on behalf of its HR committee would like age. When managing and developing igating through the people aspects of to thank the sponsors of the conference: talent,he said, particular eff ort must be integration was the issue addressed by Intermark Relocation (Gold sponsor); made to leverage and integrate diver- Tatyana Semenova, Head of HR, Russia Dialogue In Th e Dark Business Work- sity (race, gender, generation, thinking, and CIS, Th omson Reuters and Natalia shops in Moscow, courtesy of Russia Con- background, experience, capability, cul- Danina, Human Capital Solutions Direc- sulting (Silver sponsor); ElaN Languages ture, etc.). “Great talent management”, tor, Adecco, while Natalia Turkulets, HR (Silver sponsor); FutureToday (Silver Mr. Ezama said “requires taking a long- Director, Lafarge spoke about the lack of sponsor); Hays plc (Silver sponsor); IWM term perspective – 5/10 year develop- regional talents and ways to address this (Silver sponsor); MAYFAIR Properties ment plans for people”. issue through the implementation of spe- (Silver sponsor) and OBI (Silver sponsor). IT-Telecom Committee A seminar on 1C & SAP: Success stories panies Lightning Technologies, one of the key manufacturers of lighting equipment, which has been operating in Russia, CIS states and Western Europe since 1997; Hasbro – a global leader in the world in the games and associated industries and maker of games such as “Monopoly” and “Transformers”, the leading game and cinema corporation; Belgium company InBev – the world key brewing company; Multinational cor- poration ARTSANA S.p.A., owner of the CHICCO trade Jana Podzorova, BRENNTAG; Sergey Lozhkin, 1C:BIT; Alexander Schachner, ALPE Consulting; Tomasz mark and leading manufacturer of goods for children under Micek, Hasbro Russia and Lars Flottrong, RUSSIA CONSULTING the age of 3. Very well attended and extremely successful this On June 29th, 2012, the AEB IT-Telecom committee organised is now the third seminar organised by the AEB IT-Telecom its Seminar – “1C & SAP: Corporate Clients’ Success Stories. committee on this topic. Sponsored by 1C:BIT, ALPE Con- ERP System Implementation Expertise & their Effi ciency in sulting and RUSSIA Consulting, this event featured a practical Russia”. Expert speakers at the event were representatives of aspect and was based on real life examples and current busi- the following companies: BRENNTAG – the world’s leading ness problems, which were solved by the companies men- chemical distribution company; International group of com- tioned above through the use of 1C and SAP ERP systems. Intellectual Property Committee (IPR) Change status Th e AEB Executive Board made a decision to change the status of the IPR sub-committee to that of a committee due to the successful, active and independent work of its members.

AEB BUSINESS QUARTERLY • Summer 2012 AEB Committee Updates 41

Conference on Intellectual Property Rights: recent trends, court practices, problems and solutions On June 14th, 2012, the AEB IPR com- the Russian organization for Intellec- Trade Organisation (WTO) accession mittee held an annual conference dedi- tual Property (VOIS) and various legal on IPR in Russia. cated to the intellectual property issues fi rms discussed up-to-date issues and Th e overall conclusion was that at the Delegation of the European trends in the sphere. Th e audience had positive changes are taking place in Union. an opportunity to learn what changes Russia – for example, the new intel- High-ranking speakers from Rus- occurred in the Civil Code, how the lectual property rights court will be nano, the Russian Federation Minis- Arbitrazh Court and Rospatent review established in the near future that will try of Culture, the Arbitrazh Court, patent cases, the impact of the World review IPR cases.

From L-R: Anatoly Semenov, Advisor to Head of FAS; Andrey Kashevarov, Deputy Head of FAS; Nurlan Aldabergenov, Minister, From L-R: Dr. Frank Schauff , AEB CEO; Eugene Arievich, Chairman, Competition and Antimonopoly regulation, Eurasian Economic Nurlan Aldabergenov, Minister, Competition and Antimonopoly AEB IP committee and Igor Artemiev, Head of the Russian Federal Commission and Igor Artemiev, Head of the Russian Federal regulation, Eurasian Economic Commission Antimonopoly Service Antimonopoly Service Insurance and Pensions Committee Open Event on Insurance and Information Technologies Th e role of modern IT technologies in the insurance sec- and developments in the insurance sector in the sphere of tor and the future of electronic insurance in Russia were the introduction of advanced IT solutions that are needed to serve focus of the insurance market players and providers round customers and optimise business processes. Th e experts high- table organised by the AEB Insurance and Pensions commit- lighted conceptual problems, which hamper the development tee on April 26th, 2012. Th e event featured expert speakers of electronic insurance, such as legal loopholes, weak infra- from major insurance companies such as Allianz, Chartis and structure and overregulation and agreed to work on proposals Intouch, as well as leading IT companies like CryptoPro, Leads that would improve the legal framework for using modern IT and Virtu Systems. Th e participants discussed recent trends technologies in the insurance industry in Russia. Legal Committee Amendments to the Civil Code of the Russian Federation Experts from the AEB Legal committee have actively addressed the project of amending the existing Civil Code by the State Duma. As a result, a working group (WG) on amendments to the Civil Code has been created. Experts constituting the WG represent various law fi rms and have developed a common document that brings together amendments in many spheres of the law – for example, Corporate law, Civil law, intellectual property etc. Th e AEB is currently working on incorporating the its Legal Committee members into the State Duma working group on amendments to the Civil Code in order to provide timely and eff ective solutions to the project on the amendments to the Civil Code. Machine Building & Engineering Committee The Second International Forum – “Engineering Technologies” Within the framework of the Trade Organisation (WTO) tee Chairman and President, Yatsenko, Senior Manager, Second International Forum – and modernisation perspec- Alstom Russia. Among the Ernst & Young; Michael Akim, “Engineering Technologies” tives for the Russian machine speakers were Victor Klimov, Director Strategic Develop- in the town of Zhukovsky, building sector”. Th e round Vice-Chairman of the Rus- ment, ABB Russia; Alexander on June 28th, 2012, the AEB table was moderated by sian Federation State Duma Idrisov, Managing Partner, Machine Building & Engi- Philippe Pegorier, AEB Board Committee on Economic pol- Strategy Partners Group; Dmi- neering committee held a member, AEB Machine Build- icy, Innovations and Enterpre- try Koniushko, General Direc- Round Table “Th e World ing & Engineering Commit- neurship Development; Boris tor, AGCO Machinery LLC. PR and Communications Committee “Crisis Communications: A Business Game” Th e AEB PR & Communications committee conducted an 18th, 2012. Th e event was moderated by Igor Reichlin, Chair- event – “Crisis Communications: A Business Game” on June man of PR & Communications committee and Managing

AEB BUSINESS QUARTERLY • Summer 2012 42 AEB Committee Updates

Partner of Reichlin & Partners. and ways to organise a corporate response that will help mini- Th is event was in the form of an interactive workshop that mise reputation damage from such a crisis. was structured as a role-playing business game. Its partici- Th is exercise gave corporate PR practitioners an oppor- pants were divided into diff erent groups, each with a distinct tunity to freshen up their crisis communications toolkits and role that was relevant in a crisis situation. Th e purpose of this share their experience and insights with their peers within workshop was to provide a vivid overview of the communica- the professional community. Th e event was attended by 25 tions challenges arising within a company in a crisis situation people. A round table on “Social Media” On May 25th, 2012, the AEB PR & effi ciently. Th e speakers of this event ting Offi cer, Infowatch; Anastasia Communications Committee organ- presented case studies and best prac- Evdokimova, Public Relations Director, ised a round table on “Social Media.” tices: Alexey Volov, Director of Sales EF Russia & CIS; Marina Tatarskaya, Th e round table was moderated by and Marketing, InterContinental Mos- PR Director, Ferrero. Igor Reichlin, Chairman of PR & Com- cow Tverskaya Hotel; Roman Sklots- Th is event provided participants munications committee and Managing kiy, Executive Director, Big Brother with numerous opportunities to dis- Partner of Reichlin & Partners. Big Sisters of Russia; Elena Adamenko, cuss the importance of Social Media Th e purpose of this event was to PR/Communications Manager, United use in business life. provide an insight into what Social Technologies International Operations Overall 65 people visited this event. Media is about and how to use them of Russia; Vadim Zdor, Chief Consul- Th e event was sponsored by Ferrero. Small and Medium-Sized Enterprises Committee Business Breakfast: Raising Finance for SMEs On April 27th, 2012, the AEB Small and Medium-Sized potential opportunities for further investment infl ow into Enterprises (SMEs) committee held a business breakfast on the SME sector. raising fi nance for SMEs. Th e event was hosted by Hovotel Several conclusions were reached: Moscow Centre. ■ Th e overall investment climate needs to be improved in Th e event provided the audience with an opportunity to order to create more favorable environment for SMEs. receive fi rst-hand information on the specifi cs of the various ■ Th e same relates to the business culture, as currently, there sources of fi nance available to SMEs, from traditional bank is no trust between business partners. loans to budgetary funds and capital investment. High- ■ Banks are overregulated by the Central Bank of Russia and profi le speakers from the Economic Bank for Reconstruction are not able to fi nance start-ups. and Development (EBRD), MTS-Bank (former MBRD) and ■ High interest rates do not meet clients’ expectations. Prisyazhnyuk's Group Investment management company ■ Venture fi nancing is not really supported and stimulated gave the attendees a professional insight into the practical by the state, especially in comparison to the developed aspects of raising fi nance and shared their views on the countries. South Regional committee Round table – "Board of directors of foreign companies operating in Russia"

Event’s participants From L-R: Pavel Purtov NIPIgaspererabotka; Oleg Zharko Chairman of the AEB South Regional Committee; Dmitriy Bugaetz Kuban state On the 4th of April, 2012 the AEB South university of technology Regional committee together with the Th e round table was devoted to ciation. Th e event gathered representa- Professional corporate directors asso- analysing the opportunities a board of tives of the largest companies in South ciation held a round table titled "Board directors must solve, at the regional Russia. Participants at the event gained of directors in foreign companies oper- level. Th e audience received the most a lot of valuable information from the ating in Russia". Th e round table took up-to-date information and practical experts’ presentations. Th e round table place at the offi ce of “KNAUF MAR- advice on the issues from experts of the was followed by an informal discussion KETING KRASNODAR”. Professional corporate directors asso- amongst those present.

AEB BUSINESS QUARTERLY • Summer 2012 AEB Committee Updates 43

Conference "Forming of the company’s image as a socially responsible employer. Who is a socially responsible employer?

From L-R I gor Brener Cargill Oleg Zharko Chairman of the AEB South Regional Committee Tatyana Fedchnko AVALON Conference’s participants 2012” organized by the administration others shared their views and experi- of the Krasnodar city. Th e conference ence of forming company’s image. Th ey took place at the territory of exhibition brought to the attention of those present center “Krasnodar EXPO”. steps that need to be taken on order to Th e AEB South regional Committee, became socially responsible employer. Krasnodar City administration and non- Well attended by the representa- profi t partnership “Center of the strate- tives of the Russian small and medi- gic analysis and regional development um companies the conference gave a co-organized this event. JSC “NIPIgas- chance to discuss the infl uence of the pererabotka” (NIPIgas is the engineering employer’s image to the business of the center of SIBUR) supports this event company and to highlight characters of Elena Streletz, NIPIgaspererabotka through the partnership of the program the socially responsible employer. On the 25th of May, 2012 the “Territory of the social partnership”. Th e conference "Forming of the AEB South regional Committee held Th e conference was moderated by company’s image as a socially responsi- a Conference "Forming of the com- Oleg Zharko, Сhairman of the AEB ble employer. Who is a socially respon- pany’s image as a socially responsible South regional committee. Experts from sible employer?” was an intellectually employer. Who is a socially responsible Cargill Yug LLC, KrasnodarEXPO (Part rich and stimulating event that left employer?” Th e event took place with- of Th e ITE Group), Advocates Bureau everyone refl ecting on the information in the frame of the Exhibition-forum Yug, OAO Philip MorrisKuban, Vissha- presented and provided all with a per- “Small and medium businesses days- ya liga, JSC “NIPIgaspererabotka” and fect atmosphere for networking. Taxation Committee Business meeting “Development of tax legislation and enforcement practices – Development of VAT Legislation fi rst half of 2012” and Practice New normative documents on VAT, practical questions including correct- ing and adjusting VAT invoices, rein- statement of VAT on export opera- tions, VAT implications for foreign companies operating on Russian mar- ket, court practice on VAT and many Sergey Shatalov, RF Deputy Minister of Finance Speakers of the session on International Taxation, from L-R: Vladimir Voinov, Pepeliaev and Dr. Alina Lavrentieva, AEB Taxation Group; Evgeny Smirnov, Herbert Smith; Maxim Vladimirov, Noerr; Arseny Seidov, Baker other hot topics were discussed at Committee Chairwoman & McKenzie and Alexander Anichkin, Cliff ord Chance the AEB Taxation Committee event On June 28th, 2012 a business meeting “Development of tax legislation and enforce- ment practices – fi rst half of 2012” was held by AEB in Baltschug Kempinski Hotel. Th e event was aimed at highlighting recent changes in tax legislation, a number of professionals were invited to share their views and expertise on important tax mat- ters. Sergey D. Shatalov, Deputy Minister of Finance delivered a key-note speech on Key Tax Policy trends over 2013-2015. Other important tax matters – transfer pricing developments, hot VAT issues, international taxation matters, recent court practice were addressed at the event. Th e event was chaired by Dr. Alina Lavrentieva, Partner, PwC; Chairperson, AEB Taxation Committee. Experts from Ernst&Young, PwC, KPMG, Baker & McK- enzie, Pepeliaev Group, Goltsblat BLP, Cliff ord Chance, Herbert Smith, Taxcom, Noerr and other speakers presented their views on the issues discussed at the event. Dr. Alina Lavrentieva, AEB Taxation Committee Chairwoman

AEB BUSINESS QUARTERLY • Summer 2012 44 AEB Committee Updates

“Development of VAT Legislation and Practice” that was held on April 3rd at Swissotel Krasnye Kholmy. Representatives of the RF Ministry of Finance and Federal Tax Services took part in the Event. Th e event was chaired by Dr. Alina Lavrentieva, Partner, PwC; Chairperson, AEB Taxation Committee. Experts from PwC, KPMG, Taxcom, Procter & Gamble, Pep- eliaev Group, Goltsblat BLP, Ernst & Young, Gide Loyrette Nouel and other speakers presented their views for the current develop- ment in legislation and practice on VAT. Over 70 representatives of AEB member companies and EU Embassy representatives attended this successful event, which, no doubt, will have a sig- nifi cant impact on the implementation of Russian tax legislation in the area of VAT. Event’s participants Technical Regulation and Standardisation committee Change of status and name Th e AEB Executive Board made a deci- sion to change the status and name of the Technical Regulation and Standardisa- tion task force into the Product Confor- mity Assessment committee. Apart from From L-R: Elena Vikhliaeva, Consultant, Indirect Tax Section, Department of Tax, Customs and Tariff s Politics, the RF Ministry of Finance; Tatiana Kirgetova, Gide Loyrette Nouel; Yulia Kolesnikova, Ernst & Young; Evgeny Timofeev, Goltsblat BLP; Sergey Savseris, Pepeliaev Group technical regulations the committee will and Dr. Alina Lavrentieva, AEB Taxation Committee Chairwoman, Partner PwC work on issues of product conformity, certifi cation, declaration, testing, inspec- JOINT COMMITTEE EVENTS tion, and accreditation. Legal and Safety, Health, Environment and Security committees Conference on combating corruption On June 7th, 2012 the SHES and Legal Committees united eff orts in organ- ising a conference titled, “Combating corruption – challenges and way for- ward” at the AEB premises. Th e conference brought together prominent representatives from various sectors of the society – the government, industrial and legal communities and international non government organisa- tions (NGOs) operating in Russia. Th e conference focused on the exist- ing policies and legislation of the Russian Government that strive to eliminate such phenomena as corruption. Key objectives of the conference were to get familiar with the compliance programs used by various companies; reveal the challenges faced due to corruption and fi nd out what measures are taken by the govern- ment to fi ght corruption in the country. Risk Advisory Group and Heidel- berg Cement were the exclusive spon-

sors of the conference. Реклама

AEB BUSINESS QUARTERLY • Summer 2012 AEB Member News 45

of the trademark “Carniton” due to its confusing similarity to the international nonproprietary name (INN) of the active MEMBER NEWS ingredient carnitine. Th is means that a judicial precedent has been set in Russia which will help pharmaceutical pro- Alinga Consulting ducers protect themselves from players registering trade- A seminar concerning changes in the legislation in 2012 marks in circumvention of generally accepted international Alinga Consulting organized a workshop to discuss major requirements. changes in Russian legislation which your business must On 28 February 2012, the Presidium of the Supreme take into account in 2012. Possible upcoming changes Arbitrazh Court (SAC) overturned the decisions by arbi- were also discussed. Seminar addressed such issues as new trazh courts in all three instances and cancelled Rospatent’s Regulation #1137, in what instances adjusted VAT-invoices decision on the “Carniton” trademark, while fully satisfying must be fi led, what has changed for insurance payments the demands of the PIK-Farma Group and putting an end to made for foreign employees, and how to apply new PIT two years of litigation with the trademark’s owner and with deductions. Alinga specialists informed about signifi cant Rospatent. planned changes to the Civil Code. Special attention was given to issues of tax accounting for interest paid on credits BDO and loans. Th e seminar information and presentations can BDO confi rms quality of its services again be found on our site. Th e outsourcing division of BDO successfully passed the annual certifi cation audit and again confi rmed compliance Baker & McKenzie with ISO 9001:2008 in the sphere of outsourcing of business Baker & McKenzie receives managing IP 2012 Law Firm of the processes: accounting, payroll, HR administration and legal year award in Russia services. Baker & McKenzie has been pronounced Law Firm of the After recertifi cation, BDO was registered in the list Year in Russia at the annual Managing IP Global Awards “Innovation management in the sphere of outsourcing” ceremony. It is the sixth time since 2006 that the Firm's Rus- which is regarded as proof of continuous activity aimed at sian IP practice group has won this highly-respected award business processes improvement. Th e outsourcing division established by Managing Intellectual Property magazine. of BDO passed the certifi cation for ISO 9001:2008 compli- On 15 March, Moscow partners Eugene Arievich, Denis ance in March of 2011 and the certifi cate is valid through Khabarov and Margarita Divina accepted the award on 2014. Receiving confi rmation of ISO certifi cation testifi es behalf of the entire team at the Managing IP Global Awards the high quality of the company’s services; it’s capabilities to Gala in London. More than 200 people attended the din- maintain and improve this quality and proves the reliability ner at the Dorchester on Park Lane. Commenting on the of the service provider. awards, Eugene Arievich, head of Baker & McKenzie's Russian IP practice group said, “We did it again. Winning CLAAS the award for the sixth time illustrates our continued ability Driving combines on family day in CLAAS to add value to our clients' business and demonstrates the Th e 23th of June 2012 was marked in company CLAAS in depth of our experience in handling complex IP issues.” Krasnodar by a family day. All colleagues and their rela- With 20 plus experienced IP specialists, the Russian IP tives and friends were welcome on that day. Th ose present practice group of Baker & McKenzie has been ranked in the included Konkova Elena from KrasnodarExpo, Igor Brener top tier for intellectual property law by Chambers, Legal 500 from Karill Yug, Juliana Perederiy from the AEB. Th e event is and PLC Which lawyer? several years in a row. Th e Manag- organised by CLAAS every year. Th e program incorporated ing IP Award is further evidence of the fi rm’s absolute lead- words of welcome by the general director Ralf Bendisch, a ership in IP on the Russian legal services market. Our Firm presentation about the company, and an excursion through has also been named Law Firm of the Year in Indonesia, the plant. In his words of welcome Ralf Bendisch told the Th ailand, and Europe (for copyright). guests about new challenges, achievements, and about the With an audited circulation of 10,000 readers, Managing IP is the leading source of information and analysis in the fi eld of intellectual property. Published online and in-print since 1990 and aimed primarily at in-house IP counsel, Managing IP magazine includes features such as the well- known global IP survey and the annual list of the 50 most infl uential people in IP, as well as news, analysis and inter- views.

Baker & McKenzie successfully represents PIK-Farma in notable IP case Moscow, 4 May 2012 – Baker & McKenzie has successfully defended the interests of the PIK-Farma Group in a court case dealing with the cancellation of Rospatent’s registration

AEB BUSINESS QUARTERLY • Summer 2012 46 AEB Member News

and beef in Russia: it is predicted to produce 109.5 tonnes of meat and meat products, i.e. 1.5% of the total production of meat and meat products in the Russian Federation. Th e revenue from the development of related industries in the region is estimated at 9.8 billion Roubles. Gide Loyrette Nouel advised the client on structuring the deal, participat- ed in negotiations, and drafted the project documentation. Goltsblat BLP Goltsblat BLP advises Hals-Development on VTB loan fi nance as part of Moscow city Business Centre development project Goltsblat BLP has successfully advised major Russian developer, Hals-Development, and its CiTer Invest B.V. subsidiary joint prospects with the forthcoming extension of the plant in venture, on obtaining loan funds from VTB Bank for develop- Krasnodar. A good number of children visited CLAAS this ment of its Moscow City Business Centre, plot 11 project. year to take part in the specially organised competitions. Th e project will see a 230,000 sq.m. site developed to Driving combines became the culmination of the event. accommodate one of the biggest transportation hubs in Both children and adults took advantage of this opportunity. Moscow, including bus stations, taxi stands, car hire offi ces, CLAAS is a family company and the number of guests at and a railway station with rapid transit trains running to this event continues to grow each year. Vnukovo and Sheremetyevo airports. Th e complex will also include two offi ce buildings and a four-star hotel. Th e EGO Translating Company project follows the 2011 acquisition of a controlling stake A new educational project – EGO Translating University in CiTer Invest B.V., which holds the development rights to EGO Translating Company is building on its twenty years of plot 11, by Hals-Development. experience on the translation market with a new educational Th e project provides for four types of collateral granted project – EGO Translating University. Th e University assists under three diff erent legal jurisdictions. Goltsblat BLP sup- international companies working in Russia with staff training port coordinated lawyers in six jurisdictions – Netherlands, and development. Foreign language and intercultural com- Russia, UK, Cyprus, Luxembourg and Curaçao (former munication programmes are also off ered to Russian com- Netherlands Antilles), working closely with Dmitry Grinin, panies with offi ces abroad. Th e University provides business Vice President and Director of the Hals Development Legal language programmes in 77 languages. Course materials Department, and his team of professionals, in dealing with include professional glossaries and specialised texts. very complicated legal issues, and developing intricate and EGO Translating University programs comply with comprehensive outcomes, vital to the success of the project. the European standards of teaching foreign languages and cultures and are designed to accommodate all its custom- Incor Alliance ers` needs. Its work exemplifi es the rich variety of training Incor Alliance law offi ce holds a joint seminar with the Federal courses that contribute to successful staff development. Service for Financial markets in Russia in Ural Federal district International law fi rm Incor Alliance Law Offi ce held a joint Gide Loyrette Nouel seminar with the Regional Offi ce of the Federal Financial Gide Loyrette Nouel acted as legal advisor on setting up a Markets Service of Russia in the Urals Federal District on joint venture between DAMATE Agribusiness and the Penza the "Legal aspects of corporate activities: disclosure and Region (Russia) issuance of securities." Th e Moscow offi ce of Gide Loyrette Nouel acted as the Th is workshop attracted the attention of a wider audience advisor to OOO "Agropromyshlenny Complex DAMATE" due to the relevance of the topic. Anton Martkochakov, Part- ("DAMATE Agribusiness") on setting up a joint venture ner, Head Offi ce Incor Alliance Law Offi ce in Yekaterinburg with the Penza Region, Russia, on the production of turkey opened the seminar with the welcome speech. Th en Julia meat and beef. Gurevna Romashkina, Deputy Head of Department for Con- DAMATE Agribusiness is itself a joint venture between trol over disclosure by market participants of the securities in Russian company Rusmolco and the Singaporean Company the Russian Federal Financial Markets Service PO UFD spoke Olam International, which is an agricultural investment on "Disclosure of joint stock companies and their sharehold- project unprecedented in scale, so the setting up a new joint ers in accordance with the laws of the Russian Federation." venture is in line with the ambitious plans on agriculture Th en the word was handed over to her colleague Denis development in the Penza Region. Th e joint venture plans Klochikhin, Head of Legal Department PO Federal Financial to construct and further develop the turkey and cattle Markets Service of Russia in the Urals Federal District. He production complex which will include incubation, feed- spoke about the issue of securities by subscription and on ing and growing facilities, a processing and packing plant, the main issue procedure changes in accordance with the a combined feed plant and other necessary infrastructure. new Standards Project issuing securities and registration of Following setting up of this joint venture, the Penza securities prospectuses. After the presentations everyone got Region should become the biggest producer of turkey meat satisfactory answers from the speakers at the practical issues.

AEB BUSINESS QUARTERLY • Summer 2012 AEB Member News 47

Incor Alliance Law Offi ce acts as a legal advisor to JSC Benefi ts. Neil also chaired the conference’s client Panel. “Fankom” in connection with its acquisition by the “Sveza” He said: ‘Th e clients in the Panel gave us insight into the Group. issues impacting their business through this global recession International Law Firm Incor Alliance Law Offi ce acted as and showed us that fl exible unique solutions are required. a legal advisor to shareholders of JSC “Fankom”, at its acqui- Th rough Assurex Global we are able to deliver some unsur- sition by “Sveza" Group. JSC “Fankom” is the third largest passed insight and solutions to our clients at a local and producer of manufactured plywood in Russia and “Sveza” global level. Th is is a truly unique relationship that puts us at Group is the world’s leader in the manufacture of plywood. the top of the Global Benefi ts arena.’ JSC "Fankom" is one of the largest suppliers of the prod- Davor Lalic, Head of the In2Matrix Global Consulting ucts to several countries, including Turkey. In this regard, division, delivered a session which focused on an impres- one of the phases of the project was obtaining permission sive multinational pooling case study. Davor said: ‘We had for the transaction from Turkish competition authority. captivating sessions and thought-provoking discussions Anton Martkochakov, Partner, Head of Incor Alliance throughout the conference. Th e sessions which I attended Law Offi ce in Yekaterinburg, commented on this project: consisted of high quality presentations. Th e participants “Our client is an important player in the Russian and inter- had really analysed and deliberated the papers and there national market, so our team of lawyers has developed an was an all-round lively and active participation from the excellent deal structure that allows to consider the interests fl oor. I am very much looking forward to building on this not only of the seller and the buyer, but also of the third par- very strong conference in the future with further ideas and ties, who are associated with our client’s activity.” solutions that we can use to create and deliver value to our clients’. In2Matrix In2Matrix co-chaired assurex global EMEA regional partners’ Jones Lang LaSalle conference Legendary deal signed between Capital Group and Philip In2Matrix co-chaired this year’s Assurex Global EMEA Morris Sales and Marketing to lease Legend Business Center Regional Partners’ Conference. Th e conference took place Capital Group and Philip Morris Sales and Marketing on 22-23 May at the Hilton Liverpool. Th e purpose of this announce the long-term offi ce lease contract signed to event was to bring Assurex Global Partners from the EMEA lease offi ce premises in Legend, class A+ business center region together to discuss insurance issues and provide net- in downtown Moscow. Th e deal was sealed in a less than a working opportunities. As the Assurex Global representa- month – a record timeframe for a deal of this importance, tive for Employee Benefi ts in the UK and Russia, In2Matrix with the help of Jones Lang LaSalle. had responsibility for the Employee Benefi ts content of the Th e offi ce of Philip Morris Sales and Marketing in Mos- conference. It provided speakers for the client panel and it cow will occupy 9,000 square meters in the business center. launched the Assurex Global Centre of Excellence, which is Th is is the second time a leading international tobacco run by In2Matrix. company has become the anchor tenant of a Capital Group Gerard Baltazar, In2Matrix Chairman & CEO said: ‘Th is facility: back in 1998 the companies signed their fi rst rental year’s Assurex Global Regional EMEA Regional Partners’ agreement in a business center on Tverskaya Street. Th e Conference focused on current issues that specifi cally relate new deal promises to become historic for the CRE market to our Partner fi rms globally. We discussed how together we and one of the most signifi cant events of 2012. can create better value adding propositions for our clients as well as how Partners can run a profi table business during Christophe Vicic is the new Chairman of the AEB Real Estate the current economic crisis. Th e Partners recognised that by Committee combining our expertise, capabilities and global infrastruc- Jones Lang LaSalle is glad to announce that Christophe ture we can outperform our main competitors. For In2Ma- Vicic, Chief Operating Offi cer, Russia & CIS, Jones Lang trix this conference was a huge success. We demonstrated LaSalle, was appointed as the new Chairman of the AEB that it is possible to get a combined proposition that delivers Real Estate Committee for the next 2 years. Formerly Chris- results for our clients. For instance, by using combined buy- tophe was a deputy Chairman of this Committee. Chris- ing power, we introduced multinational pooling for SME’s tophe’s candidature was submitted to AEB Executive Board and we are off ering, together with one of our insurance and ratifi ed by Real Estate Committee members through Partners, a medical insurance program with MHD (‘Medi- voting. Th e appointment has been approved by AEB Execu- cal History Disregarded’) for a group size of two or over, tive Board at the April 2012 AGM. Real Estate Committee which is usually reserved for a medium, or large group. Th is was formed in 2003 as a part of the AEB working groups unique proposition is now available for clients of all Assurex network representing the interests of European businesses Global Partners’. in Russia. Committee aims at facilitating the exchange of Th e Employee Benefi ts session of the conference looked information regarding real estate and development chal- at important issues in the UK market, the US healthcare lenges in Russia, advising on existing procedures, bringing reform, international pooling cluster solutions and dealing best practices in order to increase the attractiveness of for- with expats. It included a Partner-to-Partner session which eign investment and establish a “bridge” between the AEB discussed topical issues in Employee Benefi ts. Th e session members, the Federal and Moscow Government, State was run by Neil Fallon, In2Matrix Director of Employee Duma and other relevant governmental bodies.

AEB BUSINESS QUARTERLY • Summer 2012 48 AEB Member News

Marriott Moscow Royal Aurora in 2007, has been revived," explains Alexis Delaroff , Chief Marriott Moscow Royal Aurora hotel kicks off the summer Operating Offi cer for Accor Russia. Today, Accor is working season by opening its popular summer terrace Vicolo on more Mercure hotel projects in Russia and CIS than any A cozy summer terrace “Vicolo” of the Marriott Moscow other Accor brand. Royal Aurora became one of the signs of summer in the his- Mercure Arbat Moscow hotel with its 109 stylish rooms toric part of Moscow, at the corner of fashionable Petrovka including 18 Privilège Rooms and 4 Suits proudly invites to lane. An excellent place to wile away a short Moscow sum- enjoy high standards and a wide range of services answering mer, the 80-seat Vicolo has opened its fourth season. to each to each guest’s needs: Framed with multiple fl owerbeds and canopy-covered ■ Th e hotel's restaurant "La Promenade" run by Chef Ale- to protect from a sudden shower, Vicolo, which means xan der Sorokin, serves traditional French cuisine with a ”Lane” in Italian, provides a fresh retreat on a hot summer Russian touch. day or a warm evening. ■ Guests seeking wellness and relaxation facilities will enjoy Th e menu of this season was again considerably using the hotel's gym, infra-red sauna and library. reworked by Executive Chef Th omas Koessler and his team. ■ Modern and comfortable boardroom style conference Th e new menu guarantees that Vicolo is the right place for room is fully equipped with the latest technologies such any type of the meal, – from a leisurely breakfast, a light as: videoconference system / plasma TV full HD / univer- lunch, a mid-day snack to a casual dinner. sal media player HD A newcomer to the Starters is “Marinated Red Tuna” Accor is planning to open about another 20 hotels in with bell pepper, soy sprouts and ginger is a light and deli- Russia and CIS within the next four years / by 2016 (TBC) cious option. “VIETNAMESE COLD SPRING ROLLS” and reach a total of about 50 by 2020, making Accor one of with duck confi t, ma hor paste, cucumber, carrot and the top 3 operator in the region. Th e latest openings include coriander wrapped in rice paper, with kafi r lime sauce is a two ibis hotels, one in Yaroslavl, a medium-size city in the nod towards the Asian cuisine. Highly recommended are Golden Ring of Moscow, an Ibis in Samara, a major indus- «Fresh Chicken Yogurt Salad”, with cucumber, iceberg salad, trial city on the Volga, and the other in the centre of Kiev. walnuts and celery and “Seafood Cous Cous Salad”, with cucumber and prawns. Th ai food fans will still enjoy “Th ai Novo Nordisk Beef Salad“, with all the right ingredients to make an authen- Novo Nordisk breaks ground on new plant in Russia tic dish. Other sections of the menu include Sandwiches, On April 17th, Novo Nordisk held the groundbreaking cer- Risotto and Ravioli and Sashimi & Sushi. emony for a new USD 100 million insulin plant in Kaluga. Upon completion of the construction, the new plant will meet the overall demand for the most advanced products for diabetes treatment, namely modern insulins, for Russian patients. Located in Grabtsevo Technopark in the Kaluga Region, the plant is expected to start manufacturing in 2014. It is designed in line with European and Russian GMP standards and environment, safety and energy effi ciency requirements, and will create more than 160 jobs. Th e company’s intention to establish insulin production in Russia was fi rst announced in April 2010 during the visit to Denmark of Dmitry Medvedev. At that time, agreement of cooperation between the Government of the Kaluga Region and Novo Nordisk was signed. Th e groundbreaking ceremony was attended by Anatoliy Artamonov, governor of the Kaluga Region, Tom Risdahl Jen- sen, Denmark’s ambassador to Russia, Lars Rebien Sørensen, Mercure Arbat Hotel Accor Group opens its fi rst Mercure hotel in Russia Accor Group, which was the fi rst operator to open midscale hotels in Russia, has just announced its Russian debut with Mercure brand by opening Mercure Arbat Hotel in Mos- cow, signalling a new and symbolic stage in its expansion. Mercure Arbat Moscow hotel is a newcomer in Russia to bring its unique combination of French elegancy & chic with best traditions of Russian heritage. Th e capital, which lacks 300,000 hotel rooms, is indeed a high potential region for Accor: "Our search for investors is paying off : the pace of openings is set to accelerate even though our strategy has always been one of moderation. We would also like to announce that the Sofi tel scheme in Moscow, signed

AEB BUSINESS QUARTERLY • Summer 2012 AEB Member News 49 president and CEO of Novo Nordisk, Sergei Smirnov, vice president of Novo Nordisk’s Business Area CIS. Th e ceremony participants waived conventional ground- breaking schemes. Instead of following commonly adopted traditions, the governor and Lars used bicycles that created an electrical impulse, which triggered a light wave spotlight- ing the insulin molecule. Th is event symbolised the commit- ment to both environmentally friendly technologies and an active lifestyle, an important element of diabetes prevention.

Th e plant located in Kaluga region started operations in 2010 with SKD assembly of Peugeot, Citroën and Mit- subishi vehicles. In July 2012, during an offi cial inaugura- tion ceremony, the plant launched its fi rst full production line to assemble Peugeot 408. In the next few months two new models of Citroën and Mitsubishi will be added to the line-up of vehicles, bodies of which are welded, painted and assembled in series. Th e plant will provide component localization rate of 30% to be extended in the future. PCMA Rus employing 1 700 peop le (to rise to 2 500 In recent years, the Kaluga Region has become one of when reaching the full capacity of 125 000 vehicles a year) is the fastest developing regions of Russia. Several priority one of the biggest local employers and a major participant of areas for action are being promoted by the regional admin- the growing Kaluga “automotive cluster”. istration, including attraction of direct investments. "Th e government of the region and personally the Governor created very favourable conditions for investment activi- ties by foreign companies, doing everything to remove the bureaucratic obstacles and delays in this process," explained Tom Risdahl Jensen. Anatoliy Artamonov said that one of the primary focus areas for the Kaluga Region is the establishment and devel- opment of pharmaceutical industry. He praised the work done by Novo Nordisk within this direction, and named the company a ‘trendsetter’ in the pharmaceutical industry. Sergei Smirnov expressed confi dence that the good relationship between the company and the region will be further strengthened. As an example of Novo Nordisk’s RH PARTNERS commitment to the area, he mentioned that Novo Nordisk Launch of career management services has joined the Kaluga Pharmaceutical Cluster Partnership RH PARTNERS, the 1st national group of French HR agen- that consolidates the eff orts towards building a high-tech cies, certifi ed ISO 9004.1 Qualiforma and AFNOR, is proud complex of manufacturing and infrastructure facilities. As to announce the launch of its career management depart- part of this initiative, Novo Nordisk participates actively in ment in Moscow. developing key regional programmes such as a centre for Career management being one of its core business professional training for the pharmaceutical industry. activities, in which it has justifi ed more than 10 years of international experience, RH PARTNERS provides from Peugeot, Citroën and Mitsubishi now on all the related services in Russia. Peugeot, Citroën and Mitsubishi will be assembled in full RH PARTNERS’ career management tools are meant production in Russia to assess and develop your employees and leaders. Th ey On July 4, 2012, a full-scale production facility was launched focus on emotional intelligence, leadership performance, at PCMA Rus plant belonging to PSA Peugeot Citroën team capability, talent development and learning eff ective- (70%) and Mitsubishi Motors Corporation (30%). Th e full ness. Th ey include a collection of assessment and develop- production of C-segment cars and SUVs will be carried out ment programs (performance review, competencies check, in the 130 000 m2 production zone, while the total square of potential and motivation assessment, made-to-measure soft the enterprise is 145 ha. skills trainings, career and business coaching, coaching of

AEB BUSINESS QUARTERLY • Summer 2012 50 AEB Member News executives, expat families’ support in adaptation, integration and job search) which are delivered in b-to-b and b-to-c formats. Ours are not public programs – your employees participate at the time and location you specify – so you invest in high quality, tailor-made approach to your needs, cost eff ective delivery. Incorporating them into your work ensures the greatest impact for your organization and your employees and brings the real added value to your business. Roca Roca Group once again presented innovative bathroom solutions at MosBuild’12 Roca, the leading global bathroom brand, presented and many of Roca’s very dear partners from all the regions new and innovative solutions at the annual construction of Russia. Th e company had the pleasure of inviting Ksenya and interior exhibition MosBuild fair which took place in Sobchak as a host of the evening, who made a great job in Moscow at Exhibition complex "Expocentre" from April 2nd conducting the diff erent activities and in keeping all the till April 5th. Roca Group was presented at the fair with its guests with the best possible mood. most successful brands: Laufen, Roca, Jika, Santek, Santeri Th e party took place at the Kalina bar restaurant on the and Aquaton. 21st fl oor of the Lotte Plaza Center, and intended to remind Th e diff erent booths refl ected the recent developments everyone about one of the most precious resources in our and innovative concepts of each of the brands, distributed planet – Water. Th ere was an Auction of items and products over near 600 m2. Among the new products presented by of diff erent nature, all of them related to Echology in diff er- the company there were both price per value solutions ide- ent ways and in this Auction, Ksenya Sobchak did not only ally suited for young and trendy small bathrooms, together help but contributed greatly to its success. Th e profi ts were with innovative high end design collections and models, donated to the We Are Water Foundation with projects such as Roca's In-Tank Meridian. aimed at the protection of the environment and fi ghting the Laufen brand also presented new inspiring products and negative eff ects of the lack of water resources. extended classic collections such as Palace and IlBagnoA- lessi One. Th is year Laufen booth made special emphasis on ARMANI/Roca concept presentation took place in the elite the new bright collection created by Andreas Dimitriadis bathroom equipment salon Konzept. especially for children bathrooms – Florakids. On 22nd March, 2012, the salon of elite bathroom equip- As every year, Roca Group organized an event that has ment Konzept hosted a presentation of the fi rst ARMANI/ become a tradition. Th is party intends to make a tribute to Roca bathroom concept show-room in Russia. Created by all friends and partners from all over Russian Federation and the Giorgio Armani group in partnership with the Spanish CIS. Th is year Roca had more than 350 guests at the "We bathroom expert Roca, both world leaders in their respec- are water” party – clients, designers, architects, celebrities tive sectors, this stunning concept transforms a bathroom and journalists. Among the guests, the company had the into a comfortable and harmonious environment with an pleasure to welcome His Excelency the Ambassador of the elegant and personal ambience. Technologically advanced Kingdom of Spain in the Russian Federation Mr. Luis Felipe solutions distinguish this bathroom collection – well sepa- Fernández de la Peña with wife, Mr. Fernando Valenzuela – rated functional areas, tiling, fl ooring, wall covering, lighting the Head of the European Union Delegation in the Russian and ceiling fi nishes all combine to project Giorgio Armani’s Federation with his wife, diff erent representatives of the style and ethos for the home into the bathroom area. Recog- administrations of the regions where the company operates nized professionals in the sphere of architecture and design, friends and partners of Roca, representatives of mass media came to get introduced to the new concept. Th e ambassador of Spain in Russia Luis Felipe Fernández de la Peña and Javier Burgos – Head of the Trade and Economic Department of the Spanish Embassy in Moscow were among the guests. Along with the presentation of the new collection and a wel- coming address by Roca, the guests enjoyed a “konzeptual” dinner and communication in informal atmosphere. Scania Scania is an offi cial supplier of Sochi 2014 Within the framework of Х International Investment Forum, Sochi 2011 that was held in Sochi on September 17, 2011, Scania-Rus LLC became one of the suppliers in the “Buses” category for the Sochi 2014 project. A cooperation agreement was signed by Dmitry Chernyshenko, President

AEB BUSINESS QUARTERLY • Summer 2012 AEB Member News 51 of Sochi 2014 Organizational Committee, Hans Tardell, Sheremetyevo International Airport General Director of Scania-Rus LLC, and Nikolay Odintsov, Dmitry Medvedev has checked Vladivostok Airport Readiness Director of “GAZ Group”, “Buses” Division. Within the for the APEC Summit framework of the agreement, the companies will provide On July 3, 2012 Russian Prime Minister Dmitry Medvedev buses to satisfy the Organizational Committee’s transpor- accompanied by First Deputy Prime Minister Igor Shu- tation needs during the preparation and holding of 2014 valov during his visit to the capital of Primorsky Krai has Olympic and Paralympic Games in Sochi. inspected the Vladivostok International Airport terminal. On the results of airport modernization Dmitry Medvedev Scania is an offi cial transportation partner of the SCORPIONS was informed by Director General of JSC Sheremetyevo tour International Airport Mikhail Vasilenko. It’s the second year in succession that Scania becomes an D.A. Medvedev inspected a new passenger Terminal Offi cial Transportation Partner of the SCORPIONS tour. Th e A, which is in the fi nal stage of construction and will start second part of the world tour, known as Th e Final Sting, was servicing the fi rst passengers later this month. Mikhail held in April 2012 in Russia. Vasilenko gave a tour of a new modern airport terminal for From April 17 to April 30, while the SCORPIONS band the Chairman of the RF Government and accompanying was fl ying to concert venues, nine 20-ton Scania trucks with persons and spoke about the technological features and semi-trailers were transporting lighting and sound equip- innovative solutions applied in the terminal construction, as ment. Th e route includes the cities all over Russia: Moscow, well as of the possibility of its further development. Mikhail Ekaterinburg, Chelyabinsk, Samara, Omsk, Novosibirsk, Vasilenko said that investment in the project amounted Barnaul, Novokuznetsk. to about 6.3 billion rubles, and the main investor was JSC Besides, few Scania trucks with semi-trailers were trans- Sheremetyevo International Airport. porting the band’s special equipment from airports to In turn, D. Medvedev gave his assessment of the results concert halls. Scania Omni Express and Scania Higer buses of Vladivostok Airport modernization for the APEC 2012 were used for transportation of the technical group in Che- Summit and noted the great opportunities off ered by a lyabinsk, Ekaterinburg and Moscow. modern high-tech airport for the residents of Primorye, air- Cartransservice logistical company, Scania’s customer lines and the development of the region as a whole. responsible for freight transportation, noted diffi culties It is to be recalled that by RF President Decree in 2008 caused by a tight schedule: we could not admit any down- 52.2% of JSC Vladivostok International Airport shares were time of vehicles as the concert had to be performed on time. transferred to the control of JSC Sheremetyevo Interna- But as the last year’s experience shows, reliable Scania tional Airport (JSC SIA). vehicles and experienced drivers overcame all the diffi cul- Th e strategic goal of Vladivostok International Airport ties, so that the fans of the legendary band could listen to (VIA) is to become the main transport hub for Russian favorite songs once again. passengers heading to South-East Asia, and fl ights between North-East Asia and North America. Vladivostok is located For the fi rst time in Russia, Scania is holding a Young Truck near the countries of Pacifi c Asia, which in recent years Driver Competition experienced high rates of economic growth. Due to its Young European Truck Driver Competition was held in convenient geographical location this area is of strategic 2012 for the fi rst time in Russia. YETD is a Young European importance to the air transport sector in the region and the Truck Driver Competition. Th is competition was held for country. the fi rst time in 2003; 6,000 drivers from 20 European countries took part in his event. It is the biggest competi- Ingosstrakh company will insure Sheremetyevo Airport’s tion that has ever been held among truck drivers supported motor vehicles by IRU, aimed at drawing more attention to the issues of Sheremetyevo International Airport, with the participation fuel effi ciency and transportation eff ectiveness, road traffi c of the Russian subdivision of Aon broker company (Aon safety, professional prestige, and improvement of truck driv- Rus – Insurance brokers LLC), has announced the results of ers’ skills all over the world. Young European Truck Driver an open tender for the right to insure the airport’s corporate (YETD) is a world scale event, and more than 50,000 drivers vehicles. Ingosstrakh insurance company has won the ten- from 39 countries of the world participated in it in 2012. der. Th e insurance agreement for 1 year will enter into force In 2012, Russia took part in this project for the fi rst time: on July 09, 2012. over 2,000 drivers fi led applications to participate in the Sheremetyevo Airport is paying great attention to contest. Regional semifi nals were held in six Russian cities: the organization of insurance protection in a quality Novosibirsk, Tyumen, Nizhny Novgorod, Krasnodar, Mos- and effi cient manner. When selecting insurance partners, cow, and Saint Petersburg, in the course of which six fi nalists Sheremetyevo Airport places strict demands on them, were chosen, among those took part in the National Finals focusing on the contractor’s reliability, professional com- of the competition on July 7, 2012. At the European Finals in petence, reputation and conformity to high international Sweden, which will take place on September 7-8, 2012, Rus- standards. sia will be represented by 27-year old Dmitry Semenov from Under the agreement with Ingosstrakh company, Volgograd, the winner of the National Finals in Russia, who Sheremetyevo airport will be provided with compulsory will compete for the main prize: Scania R-series tow truck. third-party liability insurance coverage (OSAGO) for 491

AEB BUSINESS QUARTERLY • Summer 2012 52 AEB Member News vehicles, voluntary motor third-party liability insurance cov- Th ereby airport Sheremetyevo has strengthened its erage for 682 vehicles and comprehensive insurance cover- position in the international fl ights market and has been a age (KASKO) for 111 vehicles. Moreover, aerodrome equip- leader in this segment among the airports of Moscow Air ment (loaders, sweepers, fi re fi ghting vehicles, cars, trucks, Cluster since November 2011. haulage trucks, buses and ramps) will also be insured. Th e In April 2012 the quantity of air passengers increased by comprehensive insurance (hijack & damage) coverage will 22,5% reaching 1,941,000. Th e passenger fl ow on the inter- amount to more than 406,000,000 rubles, voluntary motor national fl ights increased by 23,5% up to 1,220,000 and by third-party liability insurance limit will be about 597,000,000 21% up to 721,000 on the domestic fl ights. Th e most popular rubles, and compulsory third-party liability insurance limit foreign destinations in April 2012 included Paris, Hurh- will be specifi ed in accordance with the Russian Federation gada, Sharm el-Sheikh, Prague, Kiev, Beijing, Rome, federal Federal Law No. 40. ones — Saint Petersburg, Yekaterinburg, Vladivostok, Sochi. Th e voluntary insurance agreement provides for the Th e passenger traffi c growth in January-February 2012 was Sheremetyevo Airport’s right to choose between various mainly due to the performance of the following air compa- forms of insurance repayment (repair services at Autho- nies: Aerofl ot, Transaero, Donavia, Nordavia, Air France, rized Service Centers; repair services at service centers Nordwind Airlines, Aerosvit and CSA Czech Airlines. Air- to be selected by the insured; repayment in cash) and get port Sheremetyevo in January-April of 2012 hosted 67,126 reimbursed without regard to depreciation of the vehicles’ aircraft movements, which is 9.2% more than in the same components, in accordance with the principle “new for old”. period of 2011. Moreover, in accordance with the agreement, Sherem- etyevo International Airport will be off ered a package of Tebodin additional services: visits by the insurance company’s repre- Opening of new Tebodin offi ce in Moscow sentative for the purpose of conducting visual examinations; On 20 March the Ambassador of the Kingdom of the Neth- services of a personal advisor responsible for management erlands in the Russian Federation His Excellency Ron Keller of the agreement and settlement of losses. will offi cially open the Tebodin offi ce in Moscow at the new address: Moscow, Letnikovskaya Street, 10, building 4, Sheremetyevo Airport is named the best policy holder of 2011 8 fl oor (Svyatogor business center). Th e event will be part Sheremetyevo International Airport has won the annual of the traditional Dutch Business Drinks organized by the All-Russia contest “Th e Best Policy Holder of Obligatory Netherlands Embassy. Insurance of 2011” in the category “Policy Holder with Th e offi cial opening ceremony will start at 19.00. Th e Number of Employees over 500 People”. Organizer of the representatives of the Dutch Embassy, Dutch business com- contest is the Pension Fund of the Russian Federation. munity in Russia and the clients of Tebodin are expected Sheremetyevo Airport makes a signifi cant contribution among other guests. Because of its sustainable growth and to the budget of the Pension Fund of the Russian Federation, new requirements regarding the working environment the transferring in time and in full volume insurance contribu- company moved to the new location. Th e new premises are tions for formation of the future pension rights of the airport better equipped; facilitate internal logistics and communica- employees. tion between the departments, thus helping us to continue So, for the period of 2007–2011 JSC SIA transferred to providing a high level of service to our clients. Tebodin B.V. the Pension Fund of the Russian Federation payments for is an independent, multidisciplinary consulting and engi- obligatory pension insurance in the amount of more than neering fi rm with a turnover of 210 million euro (2010). 1 bln 749 mln rubles. In 2011, 622.3 mln rubles were trans- ferred, that is 50.3% more than in 2010. Troika Relocations Sheremetyevo International Airport is the largest enter- Troika Relocations open new offi ce in Kaluga prise of the north-west of Moscow region. Active develop- Troika Relocations are pleased to announce the opening of ment of the airport makes positive impact on strengthening our Kaluga offi ce! of economic stability in the region and promotes growth of Th e new offi ce, operational from July 2012, will serve the social wellbeing of inhabitants of the north-west of Moscow relocation needs of the growing number of multinational region. companies which are active in Kaluga as well as their expa- triate and Russian assignees who are relocating to the town. Sheremetyevo has strengthened its leadership in the Following the opening earlier in 2012 of our Sochi offi ce, international fl ights among the airports of Moscow Air Cluster Troika now off er in-house Destination Services in all the Sheremetyevo International Airport has summarized its primary destinations for FDI in Russia – Moscow, St Peters- operating results for April and four last months of 2012. burg, Sochi and Kaluga. Troika Relocations is the leader in Since the beginning of the year the airport has handled providing specialist, professional and highly personal Relo- 7,153,000 passengers, which is 21.5% more than in the same cation Services throughout Russia. period of 2011. In January-April of 2012 the passenger fl ow on interna- tional fl ights (IFs) grew by 20,8 %, reaching 4,549,000 pas- sengers, while the segment of domestic fl ights (DFs) grew by 22,7% (reaching 2,604,000 passengers).

AEB BUSINESS QUARTERLY • Summer 2012 AEB Member News 53

Finance Management, Control and Analysis as well as Inter- nal Audit, Control and Compliance and Treasury. APPOINTMENTS Having been in the Russian recruitment market for almost 20 years one of the key reasons for Antal Russia Allen & Overy success is using internal resources. In addition to the abil- Igor Gorchakov has joined Allen & Overy in Russia ity of promoting from within there has been a strong drive Allen & Overy is pleased to announce today that Igor Gorcha- to discipline specialization over the last couple of years. kov has joined the fi rm as a partner in the Banking department, Recruitment companies’ clients prefer working with indus- based in Moscow. Igor is an experienced and versatile Russian try experts who have done the job themselves before. lawyer with wide-ranging banking and fi nance expertise, including general lending, project fi nance, real estate fi nance, Christian Lepolard was appointed Partner, B2C/Retail Sales securitisation, derivatives and bank regulation. He also prac- and Marketing Practices at Antal Russia tises in the areas of international capital markets, M&A and Christian was born in Sedan, France in 1977. He gained dispute resolution. Igor is recognised by the Chambers and his fi rst university degree in Law, Economics & Political Partners, Legal 500 and IFLR1000 legal directories as a leading Sciences from the Institute for Political Studies in Stras- practitioner. Prior to joining Allen & Overy, he was a partner bourg, France (1995-1999). Second University Degree in at Baker & McKenzie in St. Petersburg for almost fi ve ye Business Administration from the University of Erlangen – Nuremberg, Germany (1999-2002). Christian joined Antal Russia Antal in 2004 in Moscow as a Consultant, then grew to Natalia Kulkova appointed HR Director at Antal Russia Senior Manager within 2 years. He was promoted to Asso- Natalia Kulkova has joined leading interna- ciate Partner within the Commerce team in 2007, then to tional recruitment company Antal Russia as Partner supervising the Finance, Accountancy and Legal HR Director. Prior to joining Antal Russia, practices in August 2009. Natalia worked in several major Russian and international companies in the positions of Baker & McKenzie recruitment manager, HR and organization- Baker & McKenzie announces New CIS Managing Partner al development manager and Head of HR. Baker & McKenzie announced that Sergei Voitishkin had In 2001 she graduated from the University of Russian Acad- been elected managing partner of the Firm’s CIS offi ces, emy of Education (Faculty of Psychology) where she which are located in Almaty, Baku, Kyiv, Moscow and received a degree in the State University of Management in St. Petersburg, eff ective 1 July 2012. He takes over from the fi eld of Innovation Management. Carol Patterson, CIS managing partner since 2006. Natalia’s main tasks her new role will be the further Mr. Voitishkin will be responsible for overall leadership development of the internal compensation scheme, improv- and the Firm’s strategic growth in the region, as well as rela- ing the assessment and employee development system and tionships with local regulators. Th e appointment refl ects strengthening the company’s HR-brand. Baker & McKenzie’s strong and continuing commitment “Recruitment is a people business and it is therefore only to the region. Sergei Voitishkin has been a partner with logical for us to heavily invest in our main resource – our Baker & McKenzie since 2002 and will continue to head the staff . We are delighted to announce that an HR expert like CIS Corporate/M&A practice group when he takes up the Natalia Kulkova with more than 13 years’ experience in position of CIS managing partner. human resources is joining our organization and helping us Additionally, the Firm announced a signifi cant partner to build a world class recruiting fi rm”, says Michael Germer- relocation, as well as partner promotion in its Moscow offi ce, shausen, Managing Director at Antal Russia. both eff ective 1 July 2012. Roy Pearce, an English-law quali- fi ed partner in Baker & McKenzie’s capital markets group, Antal Russia is strengthening its fi nance recruitment has joined the Moscow offi ce; while Alexander Gomonov, a Department with two key appointments Moscow-based lawyer, has been promoted to partner in the Antal Russia Recruitment Company announces Vladimir Energy, Mining and Infrastructure practice group. Tarasov appointment as Associate Partner Finance and Accountancy Recruitment. Irina Kalkina has been appoint- Deloitte ed as Senior Manager of Finance Recruitment Department. Market leading forensic team join Deloitte CIS Vladimir Tarasov joined Antal Russia in 2008 as Finance Partner Ian Colebourne, CIS Head of Corporate Finance: Director. Vladimir graduated from Finance Academy under Ian has over 16 years of experience in Financial Advisory the Government of Russian Federation (Accounting, Audit Services. He joins us from a Big Four fi rm where he chaired and Analysis Faculty) and has more than 12 years’ experi- the Forensic practice across the EMEA region and led the ence in Finance. Risk Consulting and Forensic businesses in the CIS for the Irina Kalkina has been working for Antal Russia for last 10 years. more than 4 years. During this time she has moved from Ian is highly experienced in a variety of sectors, having Consultant to Senior Manager, Finance Recruitment. Irina led a number of investigations, corporate intelligence, fraud gained a master’s degree in International Commerce in risk management assignments, and regulatory reviews of Seoul National University. Her team is closing positions in the Russian and international fi nancial institutions and

AEB BUSINESS QUARTERLY • Summer 2012 54 AEB Member News

International corporates subject to the US Foreign Corrupt EGO Translating Company Practices Act (FCPA) and UK’s Bribery Act. Ian has degrees EGO Translating Company hires talented managers in Biological Science and in Law, and qualifi ed as a solicitor Dmitry Raspopin has been appointed in England. Director of the Moscow Representative Partner Alexander Sokolov, CIS Head of Forensic: Offi ce of EGO Translating Company. Alexander has 11 years of forensic experience. Prior to that Mr. Raspopin was born in 1987 in Lenin- he spent fi ve years as an auditor in the fi nancial sector in grad. In 2004 he graduated from high school London. Alexander holds a degree in Banking from Lough- in Hutchinson, Kansas (USA). In 2008 he borough University and qualifi ed as a chartered accountant received a Certifi cate from the Folk High in England. School in Rønde, Denmark, where he studied Journalism, Partner Ludmila Grechanik: Ludmila has nearly 10 Political Science, Danish Language and Psychology. In 2009 years of Forensic experience with another Big Four fi rm Mr. Raspopin qualifi ed in Danish Philology. At present he is where she was engaged in fraud investigations, forensic studying in the Russian Academy of Civil Service under the reviews, FCPA / ABC due diligence, and fraud risk man- auspices of the President of the Russian Federation where he agement in Russia and the CIS. Ludmila has a degree in is pursuing his second university degree. Accounting, Financial Analysis and Audit, a CPA, an ACFE Dmitry Raspopin speaks English, Danish and Norwe- (Association of Certifi ed Fraud Examiners) and a Russian gian fl uently. His cross-cultural communication skills and auditor’s license. profi ciency in foreign languages allow Dmitry to work eff ec- Director Valery Knyazev: Valery has over seven years of tively with international clients. experience in litigation and insurance support engagements In 2010 Mr. Raspopin worked in the Autonomous Non- across a variety of industries. Previously, Valery worked in Profi t Organization Sochi-2014 Organizing Committee as the Forensics department of another Big Four fi rm and at GR-Manager in the Department of Corporate Relations one of the UK’s leading specialist forensic accounting fi rms. and Relations with State Bodies. In 2011-2012 he served as He also has over nine years experience of audit in Russia, Deputy Manager of the International Cooperation Division, Sweden, Germany and the UK. Valery holds a FCCA, is a Department of External Relations in the Autonomous Non- Chartered Fraud Examiner and an Associate of the Char- Profi t Organization Olympic Games Transport Directorate. tered Institute of Arbitrators. In May 2012 Mr. Raspopin was appointed Director of the Director Elena Karelina: Elena began her career in Fraud Moscow Offi ce of CJSC EGO Translating Company. His Investigation in 2005 with a Big Four fi rm. She had previously most signifi cant professional achievements include the worked in the Financial Services Audit Department of another smooth organization of international events in prepara- Big Four fi rm, has led numerous fraud investigations and tion for FIFA World Cup 2018 in Russia and XXII Olympic fi nancial crime prevention assignments throughout the CIS. Winter Games and XI Paralympic Winter Games in Sochi Elena holds a degree in Finance and Credit and is a member in 2014. of ACFE. In his new position Dmitry Raspopin will be respon- Senior Manager Natalia Golovchenko: Natalia sible for promoting EGO Translating Company on the Golovchenko has six years of experience in Forensic's. translation services market. He will participate in develop- Natalia has managed a number of engagements for coal ing and implementing the Company’s marketing strategy mining, pharmacy, energy, construction and telecommuni- and facilitate interaction with state authorities, diplomatic cation clients. She has led a large number of engagements missions, the business community and non-profi t organiza- and participated in developing recommendations regarding tions in order to promote Company products in Moscow anti-fraud controls improvement. Natalia holds a degree in Region. Finance from the Financial University under the Govern- ment of the Russian Federation. Gide Loyrette Nouel Ekaterina Vilenskaya has been elected partner of Gide Deloitte Caspian Region announces new Managing Partner Loyrette Nouel's Moscow offi ce Deloitte is pleased to announce the appoint- Th e international law fi rm Gide Loyrette Nouel is pleased ment of a new Managing Partner to lead its to announce the appointment of Ekaterina Vilenskaya as a Caspian Region practice. Darryl Hadaway partner of its Moscow offi ce, eff ective from 24 May 2012. completes his term as leader of Deloitte Cas- Ekaterina Vilenskaya heads the Real Estate practice of Gide pian on 31 May, and will be succeeded by Loyrette Nouel Moscow. She specialises in real estate law, land Mark Smith. Mark joined Deloitte Kazakh- law and contract law. With over eleven years of professional stan in April 2007 and has led the fi nancial experience, her practice also focuses on town-planning and services industry group since 2011. Over fi ve years he has construction law, lease, including transactions involving public developed a rich understanding of the region's diverse cul- land development, the privatisation of land plots, and, more ture and economy. He has served audit clients in the bank- generally, any transactions related to real estate assets. She also ing, insurance and manufacturing sectors for 12 years under advises clients in the sphere of public-private partnership proj- IFRS, US GAAP and UK GAAP. Mark is a qualifi ed Char- ects regarding all real estate matters. Ekaterina graduated from tered Accountant from the Institute of Chartered Accoun- Moscow State University (MGU), Civil Law Faculty, in 2001. tants in Scotland. She speaks Russian, French, English and Polish.

AEB BUSINESS QUARTERLY • Summer 2012 AEB Member News 55

Jones Lang LaSalle retail sale of medicines, medical equipment and medical products. Agnieszka Nowak appointed the New Marketing Director of Elena previously worked as an in-house lawyer in a SEC Galeria in St. Petersburg major international pharmaceutical company, which has Jones Lang LaSalle announced that given her a rich experience in drafting and checking con- Agnieszka Nowak joined the company’s tracts and internal regulations associated with manufactur- Retail Property Management team as a Mar- ing and distributing medicines, medical equipment and keting Director of SEC Galeria (St. Peters- medical products. burg). Agnieszka is highly recognized as a Th e Pharmaceuticals and Healthcare Group is headed leading marketing expert in shopping centre by Vladimir Sokov, a Partner in Pepeliaev Group. industry. In Jones Lang LaSalle she will focus “Strengthening the Pharmaceuticals and Healthcare on further sharpening the image of SEC Galeria, planning, Group means that we can swiftly and eff ectively perform coordination and implementation of successful marketing the tasks we are set by our clients,” states Vladimir Sokov. campaigns. He considers that highly qualifi ed legal advisers who have In 2003 Agnieszka graduated from Academy of Human- been working for many years with manufacturers, distribu- ities and Economics (Lodz, Poland) with a degree in man- tors and regulatory authorities, help clients to fi nd eff ective agement and marketing. In 2005 she hold a postgraduate solutions to the legal problems that come up during their course in Public Relations in University of Lodz. work, to mitigate potential risks, and to document and Agnieszka has a long-standing marketing experience. optimise their business processes. Our lawyers’ track record She joined Jones Lang LaSalle from Apsys Management in the sector creates additional possibilities for developing a Ltd., the company responsible for managing Manufac- dynamic and complex market. tura – the biggest and one of the most successful shopping- cultural-entertainment centres in Europe where she was RUSSIA CONSULTING holding the position of Marketing Director for 6 years and Laurence Fara is Senior Manager of the French Desk in RUSSIA was responsible for creating and coordination of marketing CONSULTING strategies and campaigns. Laurence Fara joined RUSSIA CONSULTING as Senior Her professional experience also includes working in Manager of the French Desk in the Moscow offi ce. Laurence Airport named after Wladislaw Stanislaw Reymont in Lodz is a French lawyer with extensive experience in European, and Corre Group Advertising Agency. Agnieszka has more international and commercial-law practice in various gov- than 10 international and especially ICSC marketing awards ernmental, non-governmental and private organizations. credited to her name, including prestigious ICSC Golden She has over 8 years experience in providing legal and policy Maxi Marketing Award 2009 and ICSC Golden Solal Mar- advice in Russia and the fi ve Central Asian Republics. Her keting Award in 2010. main focus at RUSSIA CONSULTING will be on develop- ing the French speaking market for the company. She also Pepeliaev Group coordinates the ten international representative offi ces of Pepeliaev Group strengthens its Pharmaceuticals and RUSSIA CONSULTING. Laurence is fl uent in French, Eng- Healthcare division lish, German, Spanish and Russian. Contact details: +7 / 495 In April 2012, Pepeliaev Group’s Pharmaceuticals and / 956 55 57 or e-mail [email protected] Healthcare Group was strengthened by the recruitment of Irina Naumenko as a Senior Associate. Irina joins from a Salans major pharmaceutical company. Dzhangar Dzhalchinov appointed Head of Salans’ Russian Tax Irina Naumenko has more than thirteen years’ experience Practice of working in major international companies active on the Dzhangar Dzhalchinov has been appointed Head of FMCG and pharmaceutical markets. During her career, Irina Salans’ Russian Tax Practice. He primarily focuses on tax has gained experience of drafting contracts of various levels litigation, and has been with Salans' Moscow offi ce since of complexity (including those governed by foreign laws), as 2007. Between 2007 and 2011 Dzhangar, on behalf of Salans' well as drafting internal company regulations relating to vari- Russian Tax Practice, handled over 300 court cases includ- ous aspects of companies’ business, resolving customs and ing in the Supreme Arbitration Court. In addition, Dzhan- antimonopoly issues, and creating and managing intellectual gar has provided full support in a considerable number of property. In addition, she has liaised on behalf of companies tax disputes settled in favor of the client before they went with regulatory authorities, has been involved in M&A proj- to court. ects, and has regularly represented companies in court. Dzhangar Dzhalchinov joined Salans in 2007 as Asso- Elena Lvova, Senior Associate, is the coordinator of the ciate and was appointed Of Counsel in July 2011. Dzhan- Pharmaceuticals and Healthcare Group. Elena Lvova works gar focuses on tax litigation. He also advises on various with pharmaceutical companies, and with manufacturers aspects of taxation, including drafting internal policies and distributors of medical products. Elena advises clients to prevent tax risks (regarding suppliers, marketing, and on: carrying out clinical research; taking part in clinical others), analysing contracts for tax risks, and verifying tax research; registering and approving the registration of medi- accounting in order to reveal potential tax assessments cines; setting prices; and the manufacture and wholesale and and overpayments.

AEB BUSINESS QUARTERLY • Summer 2012 56 AEB New Members

OOO Sokotel New appointments Andrey Shemyakin has been appointed to the position of NEW MEMBERS Sales Director eff ective 4th of June 2012 with direct report- ing to Sales and Marketing Director. Andrey has responsibil- Arval ity for the management Sales Department in Moscow as Arval, a fully owned by BNP well as execution of day-to-day Moscow Sales Department Paribas, specialises in full ser- work and also Andrey will develop new business, build vice vehicle leasing. In Russia Arval proposes corporate fl eet and maintain long term partnership, defi ne plans and meet funding solutions and a full set of products and services that sales and marketing objectives. Sales Managers in Moscow simplify the day to day running and management of fl eets, offi ce direct report to Sales Director. Andrey has a great including: maintenance and repair, insurance, tire service, work experience in hospitality business. Pprior to working roadside assistance, relief vehicle, accident management and for OOO Sokotel, Andrey worked in sales department of fuel programs, accident commissioner, fi nes management, Radisson SAS. Please join us in congratulating Andrey on short-term and medium-term car rental, fl eet reporting, his appointment. We wish Andrey success in his challenging consulting, and lease-back. At the end of the contract Arval and exciting role! will take care of used cars selling and replace them by new Olga Gulina has been appointed to the position of ones. Arval Russia’s leased fl eet has exceeded 6 100 vehicles Marketing Manager eff ective 13th of June 2012 with direct and is located in more than 100 cities. reporting to Sales and Marketing Director – Hanna Tii- Arval central offi ce is located in Moscow, regional tola. Olga will organize successful operations of Marketing branches are in St. Petersburg, Nizhniy Novgorod, Samara, Department and its development and also Olga will plan Rostov-on-Don, Ekaterinburg, Novosibirsk, Irkutsk, Vladi- and implement all the marketing and PR activities for three vostok. Sokos Hotels in Russia. Marketing coordinator reports Arval Russia’s contacts: directly to Marketing Manager. Olga has a University degree 19, Leninskaya Sloboda str., Moscow, 115280, Russia from Journalism at Saint-Petersburg State University. Prior Tel.:+7(495) 644-22-70; Fax:+7(495) 644-22-71 to working for OOO Sokotel Olga has been working as www.arval.ru trade-marketing manager and brand manager with such e-mail: [email protected] companies as “Paulig Coff ee” and “Melitta Russland”. Please join us in congratulating Olga on her appointment. We wish Arysta LifeScience Olga success in her challenging and exciting role! Headquartered in Tokyo, Japan, Arysta LifeScience is SWISSÔTEL KRASNYE HOLMY the world’s largest privately held crop protection and life Appointment of a new General Manager of Swissôtel Krasnye science company with 2011 revenues of JPY125.8 billion Holmy (US$1.6 billion). An entrepreneurial provider of crop pro- Swissôtel Krasnye Holmy, Moscow is tection and life science products in more than 125 countries pleased to announce the appointment of Mr. Marc Ohlendorf as General Manager of the property. With more than 20 years in the industry, Mr. Ohlendorf brings vast experience to his position. Previously he was the General Manager of Swissôtel Zurich AEB Membership Benefi ts having been promoted from the Executive Assistant Man- Eff ective Lobbying ager position which he held since 2005. Mr. Ohlendorf fi rst Advocating members' interests to public offi cials, legislators and business joined the property in 2001 as Director of Food & Beve rage. decision-makers in Russia and the EU. Cooperating with the Russian autho- His previous experience includes the position of Managing rities to solve business issues and eff ective interaction with lawmakers. Director in charge of Rooms Division at the Hotel & Guts- Quality Business Information gasthof Stangl in Germany. Marc holds a diploma in hotel Publications: AEB Business Quarterly, Membership Directory, Position Paper, management from Business & Hotel Management School, Real Estate Monitor, How to Invest in Russia, monthly AEB News. Lucerne (Switzerland). In 2004 he received his MBA from Regional presentations and business development missions to the regions. More than 20 sector and issue-based committees and working groups GSBA Business School, Zurich. Apart from his native Ger- in Moscow, St. Petersburg, Krasnodar and Yekaterinburg. man, he is profi cient with the following languages: English, Valuable Networking French and Italian. Organising open meetings, conferences, political briefi ngs and other As the General Manager of the Swissôtel Krasnye high-profi le events with prominent government and business leaders. Holmy he will oversee all aspects of rooms, food & bever- Regular social events, including embassy EuroReceptions Government age, engineering, marketing and partner relations, lead- and business contact information in Moscow and the regions. Online access to Member Database. ing the team to successful accomplishments and reve- Marketing Opportunities and Visibility nue growth. Mr. Ohlendorf took over Mr. Jan Chovanec Internet links and banners. Advertising opportunities in AEB publications. who has been recently appointed the General Manager of Sponsorship opportunities during AEB events. Swissôtel Beijing.

AEB BUSINESS QUARTERLY • Summer 2012 AEB New Members 57 worldwide, Arysta LifeScience specializes in marketing and ul. Mosfi lmovskaya, 35, building 2, Moscow, 119330, Russia distribution of respected crop protection brands and life sci- Phone: +7 495 745 19 46 ence products in harmony with the needs of global partners. Fax: +7 495 745 39 46 More information on the company is available at: www. E-mail: [email protected] arystalifescience.com. Vadim Khalme, Managing Director

Chery Automobile Rus Lanxess OOO Chery Automobile Co. is a Chinese auto- LANXESS – at the heart of the chemi- mobile company founded in 1997. Th is cal industry large state enterprise is specialized on the LANXESS is a leader in specialty chemicals and oper- development and production of cars and car components. ates in all important global markets. In 2011, the company, Chery production plants are located in Russia, Ukraine, which is listed on the Frankfurt Stock Exchange, achieved Indonesia, Brazil, Iran, Egypt, Malaysia and Uruguay. Th e sales of EUR 8.8 billion. representative offi ces work in Eastern Europe, in the Middle With its extensive portfolio, it focuses on premium East, in Northern Africa and South East Asia. business. Its core business comprises the development, Today Chery Automobile Co production capacity is 800 000 manufacture and sale of plastics, rubber, specialty chemicals cars per year. Chery is the largest Chinese automaker in China and intermediates. In addition, it supports its customers Chery Automobile Co entered the Russian market in in developing and implementing made-to-measure system 2005, having based its subsidiary in Moscow. CJSC “Chery solutions. In these areas, which are at the very heart of the Automobile Rus” became the fi rst offi cial representative chemical industry, LANXESS has core expertise in the form offi ce of Chery outside of the Republic of China. of chemical and application-related know-how, fl exible asset Chery dealer network constantly extends in Russia, at management and customer proximity. Our aim is, through present it includes 92 regional representative offi ces. Th e innovative products, optimized processes and new ideas, to model range presented in our country consists of 8 cars. generate added value for the customers and the company. Many forces combine at LANXESS's 49 sites worldwide Ferring Pharmaceuticals to produce the optimal result. Th is applies both to the Ferring Pharmaceuticals is a research- products and processes themselves and to the 16,700 or so driven biopharmaceutical company staff in 30 countries that are responsible for the company’s devoted to identifying, developing day-to-day business. LANXESS is treading the path that and marketing innovative products in the fi elds of reproduc- is inherent in its name: Combined from the French verb tive health, urology, gastroenterology, endocrinology and “lancer” meaning to thrust forward and the English noun osteoarthritis. “success”, LANXESS represents the determined will to Th e company's research activities and products are con- achieve and the readiness to embrace continual change. nected by a common thread focused on the provision of tai- lored treatments that work on the body's own terms to enable LIKEHOME SERVICED APART- doctors to combat numerous diseases and medical conditions. MENTS Th e company has gained international recognition over LikeHome is one of the leading pro- the last 20 years for the creation of inventive medications vider of serviced apartments in Rus- that improve the quality of life of children and adults all sia, both in terms of the number of around the world. apartments we operate as well as the quality and range of services we provide.At present, we Hoyer Rus manage more than 100 serviced apartments in Moscow HOYER – Full range logistics servi- which off er services of truly international quality. We take ces in Europe and around the world. care of everything else: maintenance, visas, registration, HOYER is an international logistics supplier, tank-con- transport, etc. day or night. tainers and road fl eet owner, one of the pioneers of the Rus- Serviced apartments are properties fi tted out to a very high sian bulk products market since the 1990s. standard, with services you would only normally expect to fi nd Our main activity is – handling liquid chemical & oil available in a hotel (daily cleaning,technical support, concierge industry products, food and liquefi ed gases around Europe service, transfer, visa and registration support andetc.), which and overseas, off ering a full range of services in road, rail are leased for short terms (from two nights to several months). and sea transportation. Also, working closely with partners, LikeHome is the provider of serviced apartments in HOYER off ers packed products transportation, customs St.Petersburg and others cities of Russia, as well as in Paris, clearance and warehousing services. London and New York. High safety standards and reliable long-term partnership with our clients are our secrets of successful performance Severtrans Group, ZAO over the years. To ensure the high-quality service to its clients Address: Vashutinskoe shosse 20/1, Khimki HOYER has subsidiaries and agents in 87 countries worldwide. Tel: (495) 502-8787 Contacts Fax: (495) 502-8787 OOO «HOYER RUS» Website(s): http://www.severtrans.ru

AEB BUSINESS QUARTERLY • Summer 2012 58 AEB New Members

Th e group of companies "Severtrans" is the 3PL provider, over 50 hotels in Finland, Tallinn and St. Petersburg. Th e the owner of the platinum diploma В «Best logistical opera- hotels are located in city centers or at holiday resorts, with tor of Russia», we off er cooperation with the purposes of excellent connections. Besides accommodation, conference optimisation of management by moving of consignments services and wellness the Sokos Hotels off er quality service with granting of services: to meet every business and leisure requirements. ■ Th e Customs Representative ("VashBroker"), Welcome to experience the Sokos Hotels in St. Peters- ■ Warehouse of time storage (В«KV Terminal» and "Stroy- burg! investproect") volume 7 453 m3 and open area with adjoin- www.sokoshotels.com ing territory a total area 43 100 m2 with single placing to 500 means of transport. STAHLBAU PICHLER ■ Warehouse (Joint-Stock Company GK "Severtrans") ware- For over 30 years now we have been planning, houses of a class A+, equipped with modern engineering producing and constructing steel structures and information systems a total area more than 27 000 m2. and curtain walls throughout Europe. Specialisation of activity of "VashBroker" – the All-Rus- We are active in the construction of pri- sia broker – is customs clearance of all groups of the goods vate and commercial buildings, industrial at various customs, including in the places approached to complexes, bridges and infrastructures. frontier Russian Federation, with application of technolo- Starting in the 1970s as a small handicrafts fi rm, we gies of remote issue in the electronic form with use of the have gathered strength and mastered the challenges of the international association of networks "Internet", in seaports market, investing in technological and design research, the and the airports. development of the production chain, and the training and We grant a complete service package on customs regis- growth of human resources. tration of consignments at export and merchandise imports, Today, with over 200 employees and a track record of to safekeep and we guarantee quality at all stages of work! over 2,500 contracts completed, we can manage every phase Alina Kvartalnova, Head of Customer Relations Depart- of a project from the initial feasibility study to fi nal construc- ment tion, drawing on an annual production capacity of 25,000 E-mail: [email protected] tonnes of steel and 70,000 m2 of curtain wall. Our company is chosen by international architects and Sokotel LLC (Sokos Hotels) prestigious clients for its skill and reliability in creating fi ne Sokos Hotels is the largest and works of contemporary architecture. most well-known Finnish hotel chain. Th e chain operates Th e offi ce in Russia, OOO Pichler Rus exists from 2008. Реклама

AEB BUSINESS QUARTERLY • Summer 2012 ASSOCIATION njǝǝǚǢǔnjǢǔǫ OF EUROPEAN BUSINESSES ǑǎǜǚǛǑǕǝǖǚǏǚ ǍǔǓǙǑǝnj Russian Federation, Ul. Krasnoproletarskaya 16, bld. 3 Российская Федерация, 127473, Москва, 127473 Moscow, Russian Federation ул. Краснопролетарская, 16, строение 3 Tel.: +7 (495) 234 27 64. Fax: +7 (495) 234 28 07 Тел.: +7 (495) 234 27 64. Факс: +7 (495) 234 28 07 [email protected]. http://www.aebrus.ru [email protected]. http://www.aebrus.ru THE VOICE OF EUROPEAN BUSINESSES IN RUSSIA AEB MEMBERSHIP APPLICATION FORM / ǓnjǫǎǗǑǙǔǑ HA ǣǗǑǙǝǞǎǚ njǑǍ Please fill out the Application Form in CAPITAL letters, sign it and fax it to 234 28 07/ Заполните заявление печатными буквами и пришлите по факсу 234 28 07 Calendar year / Календарный год: 2012 (Please check the appropriate box/boxes / Укажите соответствующий год/года)

Name of your AEB Contact / Ваше контактное лицо в АЕБ: ______

1. COMPANY / ǝǎǑǐǑǙǔǫ ǚ ǖǚǘǛnjǙǔǔ Company Name in full, according to company charter. (Individual applicants: please indicate the company for which you work / Название компании в соответствии с уставом. (Для индивидуальных членов – название компании, в которой работает заявитель):

Legal Address (and Postal Address, INN / KPP / ИНН/КПП: if different from Legal Address) / Юридический и фактический адрес, Phone Number / Номер телефона: Fax Number / Номер факса: если он отличается от юридического:

Website Address / Страница в интернете:

2. CATEGORY / ǖnjǞǑǏǚǜǔǫ: THE CATEGORY IS DETERMINED ACCORDING TO THE COMPANY’S WORLD TURNOVER Company’s world-wide turnover Please indicate your AEB Category / Мировой оборот AEB Membership Fee / Отметьте категорию (euro per annum) / Членский взнос в АЕБ компании (евро в год)

SPONSORSHIP / Спонсорство – 8,500 euro/евро

CATEGORY A / Категория А >500 million/миллионов 5,750 euro/евро

CATEGORY B / Категория Б 50–499 million/миллионов 3,500 euro/евро

CATEGORY C / Категория С 1–49 million/миллионов 2,000 euro/евро

CATEGORY D / Категория Д <1 million/миллионов 750 euro/евро

INDIVIDUAL (EU/EFTA citizens only)/ Индивидуальное (только для граждан Евросоюза/ЕАСТ) – 750 euro/евро

Any non-EU / non-EFTA Legal Entities applying to become Associate Members must be endorsed by two Ordinary Members (AEB members that are Legal Entities registered in an EU / EFTA member state or Individual Members – EU/EFTA citizens) in writing/ Заявление любого юридического лица из страны, не входящей в Евросоюз/ЕАСТ, и желающего стать членом АЕБ, должно быть письменно подтверждено двумя членами АЕБ (юридическими лицами, зарегистрированными в Евросоюзе/ЕАСТ, или индивидуальными членами – гражданами Евросоюза/ЕАСТ) Individual AEB Membership is restricted to EU / EFTA member state citizens, who are not employed by a company registered in an EU / EFTA member state / К рассмотрению принимаются заявления на индивидуальное членство от граждан Евросоюза/ЕАСТ, работающих в компаниях, страна происхождения которых не входит в Евросоюз/ЕАСТ Please bear in mind that all applications are subject to the AEB Executive Board approval / Все заявления утверждаются Правлением АЕБ

3. CONTACT PERSON / INDIVIDUAL MEMBER / ǖǚǙǞnjǖǞǙǚǑ ǗǔǢǚ / ǔǙǐǔǎǔǐǟnjǗǨǙǧǕ ǣǗǑǙ

Title, First Name, Surname / Ф.И.О:

Position in Company / Должность:

E-mail Address / Адрес эл. почты: 4. COUNTRY OF ORIGIN / ǝǞǜnjǙnj ǛǜǚǔǝǡǚǒǐǑǙǔǫ

А. For a company / Компаниям: Please specify COMPANY’S country of origin / Указать страну происхождения компании1

or B. For an individual applicant / Индивидуальным заявителям: Please specify the country, of which you hold CITIZENSHIP / Указать гражданство

Please note that only EU / EFTA members can serve on the Executive Board and the Council of National Representatives/ Внимание! В Совет национальных представителей и Правление могут быть избраны члены, представляющие страны Евросоюза или ЕАСТ. Please fill in either A or B below/ Заполните только графу А или В

5. COMPANY DETAILS / ǔǙǠǚǜǘnjǢǔǫ ǚ ǖǚǘǛnjǙǔǔ

Company present in Russia since: ______/ Компания присутствует на российском рынке с:______г.

Company activities/ Primary / Secondary / Деятельность компании Основная: Второстепенная:

Please do not include this in

Company turnover (euro)/ In Russia / Worldwide / the AEB Member Database/ Не Оборот компании (в Евро) в России: в мире: включайте это в справочник АЕБ

Please do not include this in

Number of employees/ In Russia / Worldwide / the AEB Member Database/ Не Количество сотрудников в России: в мире: включайте это в справочник АЕБ

Please briefly describe your company’s activities (for inclusion in the AEB Database and in the AEB Newsletter) / Краткое описание деятельности Вашей компании (для включения в базу данных АЕБ и публикаций АЕБ)

6. HOW DID YOU LEARN ABOUT THE AEB / ǖnjǖ ǎǧ ǟǓǙnjǗǔ ǚǍ njǑǍ?

Personal Contact / Личный контакт Internet / Интернет

Media / СМИ Event / Мероприятие

Advertising Source / Реклама: ______Other / Другой:______

Signature of Authorised Representative of Applicant Signature of Authorised Representative of the AEB / Company / Подпись уполномоченного лица заявителя: Подпись Руководителя АЕБ:

______

______

Date/Дата: Date/Дата:

1 Location of a parent company or of the main shareholder/ Местонахождение головной конторы или основного учредителя. реклама реклама