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Talking Point

There are many challenges to be overcome if you are planning to do business in Russia, but the rewards can be high, says David Cashman

Tensar started looking at the potential of the Russia 13 years ago.

It is not a market that should be overlooked since it is a very large country, with an infrastructure that requires significant investment and modernisation.

With large quantities of oil and gas, Russia does have the wealth to be able to fund these plans and it is certainly open to foreign suppliers of proven technology.

However, there are significant challenges in trying to do business in a country which spans nine time zones, and has climates ranging from sub-tropical to sub-arctic.
It also ranks 123rd out of 183 countries in the World Bank’s “Ease of Doing Business” index.

As a frequent visitor to Russia, I find ample opportunity to network with other British companies, and I have found there are some common mistakes to avoid.

For example, you cannot service Russia at arm’s length by email and the occasional visit to Moscow.

You need a good Russian partner.

We realised a long time ago that, due to the cultural and language difference, and the very different way that business is often done, we would not get far without such a partner.

We have worked with ours now for more than 10 years, and our investment in two offices, which are staffed by Russian nationals, has paid dividends.

The first question we are asked is always: “Do your products work at -50oC?”

Getting translations done early is a courtesy that is much appreciated.

Translate promotional material and Powerpoint presentations into Russian before you come, not on the night before the big meeting in Moscow - silly mistakes due to rushed translation will not help your cause.

The severity and extreme contrasts of the climate are of huge significance and must be taken into consideration if you are selling products into the civil engineering market.

The first question we are asked is always: “Do your products work at -50oC?”

We had to invest in extensive cold region testing to prove that our geogrid materials worked in the temperature range encountered there.

You must try to build up case studies in similar conditions to Russia’s climate to prove that your products work - presentations highlighting case studies from countries with gentler climates will not carry much weight.

It is important to find the right business contacts at the right level as this is important to the Russian way of doing business.

All too often a British company will latch on to
a British/American/Canadian citizen in a Russian company, simply because they speak English.

But if this person is not the right contact for your business, you may not progress as well as you might, even though speaking the same language makes it easier to communicate.

The Russo-British Chamber of Commerce and UK Trade and Investment can help facilitate contacts with Russian companies.

The rewards may not come quickly, but they will be worthwhile.

Manufacturers and service providers can make use of the help which the UK can put at their disposal.

The UK has a very impressive embassy in Moscow, and consulates in Ekaterinburg and St Petersburg. All have UK Trade and Investment staff, and this can give you a distinct advantage over competitors from other countries who may not have the same level of help from their own government representatives.

Above all, you have to have long-term commitment and perseverance.

The rewards may not come quickly, but they will be worthwhile.

When the going gets tough, remember that Russia has plans to increase its railway network by 20,000km, its road network by 1.5M.km, to invest in infrastructure for the 2018 World Cup as well as to develop its oil and gas industry.

Stick with it and you are sure to reap the benefits sooner or later.

  • David Cashman is business manager for Russia and Central Asia at Tensar International

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