DOING BUSINESS IN RUSSIA

Transcription

1 DOING BUSINESS IN RUSSIA - a foreign perspective WHAT ARE THEY TALKING ABOUT? INVESTMENTS COMMUNISM FREEDOM OF SPEACH SNOWDEN BRICS OBAMA SYRIA STOCK MARKET HOMOSEXUALITY TAXES MONEY CRIMINALITY US REALTIONS GAS MONOPLOY FIFA World CUP

2 Ola Kastensson Managing Director, Russkie Prostori In Russia since 1992 operating offices in St. Petersburg, Moscow & Sochi and working Internationally for 35 years

3 Reality of the Russian Federation SHORT FACTS POPULATION Russia 145 Million inhabitants Moscow 14 Million people St. Petersburg 5,5 million people Sochi people RUSSIAN LANGUAGE TIME 9 time zones Moscow Time + 3 hours GMT No saving daylight change GEOGRAPHY Largest country in the world (1/7 of the world s landmass with Tundra, steppes, desert, glaciers & volcanoes Touching 22 bodies of water & hold 12 seas within its borders.. Oldest mountains in the world (Ural) Europe s Highest Mountain (Elbrus m Caucasus), Deepest lake in the world (Lake Baikal.)

4 What s happening now! INTERNATIONAL EVENTS YEAR EVENTS 2013 World Athletics Championship 2013 Universiade Kazan 2013 Rugby World Cup Sevens 2013 World Combat Games 2013 Torch Relay all over Russia 2013/4 Pulkovo International Airport 2013 G20 Meeting in St. Petersburg 2014 G8 Summit Sochi 2014 Winter Olympic Games 2014 Formula 1 Grand Prix in Sochi 2015 World Aquatics Championship 2016 World Hockey Championship 2016 Russkie Prostori 20 years Anniversary 2017 FIFA Confederations Cup 2018 FIFA World Cup

5 What has changed KRASNAYA POLYANA ALPIKA SERVICE) ROZA KHUTOR GORNAY KAROUSELL GAZPROM GRAND POLYANA

6 Development for 28 million people FIFA CITIES (2018) ST. PETERBURG (5,5 MIL) MOSCOW (14 MIL) SOCHI (0,4 MIL) YEKATERINBURG (1,3 MIL) KAZAN, (1 MIL) ROSTOV-ON-DON, (1 MIL) KALININGRAD (0,45 MIL) YAROSLAV (0,6 MIL) NIZHNY NOVGOROD (1,3 MIL) SARANSK (0,3 MIL) SAMARA (1,1 MIL) INFRASTRUCTURE AIRPORT & ROADS HOTEL DEVELOPMENT ARENAS POTENTIAL CONGRESS CENTERS

7 OVERVIEW DEVELOPMENT HOTEL CHAINS Source : International hotel operators in Russia, KMPG report, Russia & CIS

8 Overview Hotels (1/3) MOSCOW In Progress: Fairmont, Four Season & Mandarin International Chains Courtyard by Marriott Crown Plaza Hilton, Holiday Inn Ibis Intercontinental Iris Kempinski, Le Meridian, Lotte Hotels, Marriott Hotels & Resorts, Mercure Novotel Park Hyatt, Radisson (Royal, Radisson Blu, Park Inn) Renaissance Ritz Carlton Sheraton Swisshotell,

9 Overview Hotels (2/3) ST. PETERSBURG International Chains Best Western Corinthia Crown Plaza Domina Four Seasons Hotels Holiday Inn Ibis Holiday Inn Indigo Kempinski Hotels Marriott Courtyard Novotel Orient Express Hotels Radisson Royal Radisson Blue Radisson Park Inn Renaissance Rocco Forte Hotels Sokos Hotels Staybridge suites W Hotels

10 Overview Hotels (3/3) SOCHI (KRASNAYA POLYANA) International Chains Accor JW Marriott Kempinski Marriott Mercury Meridian Pullman Radisson Radisson Blue Riou Sheraton Solis Swisshotel Treetops by Hilton Tulip Inn

11 Airport Structure RUSSIAN GATEWAYS MOSCOW (MOW) Shermentevo (SVO) Domodedovo (DME) Vnukovo (VKO) ST. PETERSBURG (LED) Pulkovo 2 (International) Pulkova 1 (Domestic) New Airport (under construction end of 2013) SOCHI (AER) Adler International Airport

12 The youngest European Airline AEROFLOT Sky Team member (base Shermentevo) Official Olympic Sponsor Route to 109 destinations in 51 countries Handling of 16 million passengers (2012) FLEET 2013: 131 aircrafts (modern Airbus A320-family, A330 &Sukhoi Super Jet's). 2013: 4 of 16 ordered Boeing aircrafts B ERs and B ERs will be added. 2016: 22 Boeing B787 Dreamliner s to be added 2018: 22 Airbus A350 jets to be added

13 21 YEARS IN MY RUSSIA WHAT HAPPENED? MOSCOW ST. PETERSBURG - SOCHI ST. PETERSBURG MOSCOW SOCHI

14 СТ. ПЕТЕРБУРГ ST. PETERSBURG What I did since 1992 Opening of Hotel Nevskij Palace (Marco Polo) Feasibility Study of Business floor Concept International DMC in Russia IATA agency in Russia (business travel) Focus on Ethics and Quality (1 st SITE, MPI member) (ISO Certification & IT development Ethics, Protection of intellectual Property, Copyright & Integrity Reality 1992 Around 395 registered foreign entities 2 TV Channels (today over 100) Kiosk importing still Beroiskchka shops Windows covered (independent items) Procter & Gamble No neon lights no Advertising (300 USD for TV ADS) Only Cyrillic text Metro and In the Street English basically non existing

15 Doing business 20 Years ago BUSINESS No International telephone lines, no computers, no e- mails (telex) Copy Machine permissions Grand Hotel only satellite line 25 USD / minute One International restaurant Daddies Steak House 1 telephone, applicants for 300 positions. Academic background & languages & highly qualified but without service knowledge Positive no obstacles to change Travel motivation source (Stakhanovism) No Establish Constitutional law and Russian accounting praxis not relevant for Foreign companies Klondike for Financial companies looking for practices becoming laws, trends, development Crime & Protection (safety systems didn t work) Entrepreneurs creating myth about how they did business A country with two infrastructures

16 DOING BUSINESS TODAY

17 BUSINESS FACTS (1/2) Russia Largest Market in Europe 2nd largest European Car market Inflation under control 2012 (3,6%) Largest Phone market in Europe Worlds largest hard currency reserve Largest Consumer product market in years Unemployment at 5,45%

18 BUSINESS FACTS (2/2) HUMAN RESOURCES: top 3-5 markets SALES: 6-12 times more per capita than China & India BEST PROFIT MARKET IN THE WORLD: premium prices & raises BUSINESS GROWTH EXPECTATIONS: 100% in 5 years TOP GLOBAL MARKET: Expansion and priority CEE MARKET SHARE : % BEST BUDGET BALANCE IN THE WORLD: and additional spending BANK CREDIT GROWTH: 40% increase consumer loans (Eurozone 4%) DANONE & Pepsi ranks as 1-2 markets in the world Japan Tobacco company, Reiffeisen and OPT bank Russia represents a significant share of global sales Oriflamme 50% of global sales Inchcape, Oriola, Gedeon Richter, Metro, Scania, Man solid part of global sales

19 Income distribution (BRIC) Largest Middle & Premium Class Market Western companies sell more Per Capita than in China, India & Brazil Source: CEEMEA Business Group, September 2012

20 Consumer Satisfaction Europe China in comparison worldwide. Average living expectancy increasing from 57-63

21 Short hints being in Russia 20 fingers and 2 Brains Carpe Diem: solving any issues on the spot! Mobile Phones: Impolite to not answer! Opinions: There are 145 million opinions! Specifics: It s very difficult to generalize about Russia Speeches: We love speeches but spontaneously Talking: Very direct start with the actual point Information: Why don t you ask? Possibly yes? Nothing is impossible we don't jump Horoscopes: Judged by the stars Smiles: Not at first but more Latin when known Hello & Goodbye: Put the coat on & beware of thresholds Cars & Traffic: Watch out for the yellow light! Whistle: Don t whistle inside Foreigners & understanding: Yellow blue ICCA

22 Travel Business opportunities Summery HOTEL EXPANSION & CAPACITY AIRLIFTS INTERNATIONAL & DOMESTIC CVB DEVELOPMENT VISA REGIME & BILATTERAL AGREEMENTS INFRASTRUCTURE, CONGRESS CENTERS & STADIUM WORLD ATTENTION & BUSINESS OPPORTUNITIES VENUES A NEW MARKET!

23 Why Russia UNIQUE SELLING POINTS No expectation Unexpected high value and service High Return of Investments High participation rate Spouse friendly Brag value Visa (few have been here) Soviet Mystique BRIC market & financial development Winter Olympics 2014 FIFA World Cup 2018