Fira in Russia, a destination for doing business

NOVEMBER 2012

18-04-01Russia is the largest country on the planet and has the world’s ninth largest economy. According to Russian government sources, its gross domestic product (GDP) grew by 4.3%, reaching 1.7 billion dollars in 2011, and the forecasts for the future are equally optimistic.

The increasing demand from the emerging middle class, primarily located in Moscow and St. Petersburg, and the major transport and facilities infrastructure plan that will be implemented in the coming years, make Russia place a Russia com un key market for Spanish companies looking to do business abroad and thereby to compensate for the weakness of domestic demand.

The interview

18-04-02

José Montoro

Head of the Fira de Barcelona delegation in Russia, based in Moscow.

Do you think that Russia offers business opportunities?
Yes, undoubtedly. Some pioneering Spanish companies, such as Gallina Blanca and Campofrío, spotted the potential of Russia in the late nineties and decided to set up their business in the country. Today, the Russian market offers great opportunities in many economic sectors, but the key to success is to enter the market with a well-defined product.

In which sectors?
There are good opportunities in sectors specializing in building materials, engineering, waste management and the environment (renewable energies), machine tools, fashion and high quality footwear, houseware, gourmet products and sparkling wines, among others.

What advice would you give Spanish companies to successfully enter the Russian market?
Knowledge of the environment in which they will have to compete is important, as well as familiarity with their local partners, if they are involved in joint ventures. It is important to remember that Russia does not belong to the EU and some of its sectors are still highly protected. That leads to more costs for foreign companies when introducing their product in Russia than doing so in other countries in Eastern Europe. However, when you achieve a market share, it is more protected from new competitors than in other EU countries.

18-04-03How would you describe the commercial relationship between Spain and Russia?
Growing. In the last decade, trade between Spain and Russia was focused on oil imports. Today, many exchanges are taking place and we anticipate that these business relationships will have generated a billion dollars in 2012. However, there is still a great deal of potential for growth in trade between the two countries, given that Spain is the Russia’s nineteenth biggest client, far behind Germany and Italy.

Does Russia want to invest in Spain?
Yes. The first Russian investments in Spain involved purchasing real estate on the coast. Now it is not only individuals who are investing, but also companies who see Spain, and Barcelona in many cases, as a suitable location for expanding their business in Southern Europe, North Africa and even Latin America.

What kind of businesses and professionals are interested in the Fira shows?
To a large extent, they are professionals linked to the tourism sector, real estate, packaging and services. They are mainly interested in participating and visiting shows like Construmat, Hispack, BcnRail, Piscina and the Boat Show.

What is the image of the Fira de Barcelona shows in Russia?
They are still not very widely known. However, the fact that Barcelona is increasingly perceived by Russian entrepreneurs as a hub for doing business in other parts of southern Europe may mean that some Fira shows may become important economic and trade forums between Russia and Spain and Russia and Southern Europe.

What is the image of Barcelona in Russia?
Obviously, the city is linked to leisure and holidays, but not just those things. Russian tourists are very interested in and passionate about Spanish culture, gastronomy, traditions and lifestyle. The number of Russians in Spain is increasing rapidly, and bringing vitality to our economy.

  • Russia covers an area of over 17 million km2. It occupies one sixth of the earth’s surface, and is twice the size of the U.S.A. and China.
  • Russia has a population of over 141 million inhabitants, of which 88.4 million are of working age.
  • Russia has the world’s largest natural gas reserves and some of the main coal and oil reserves.
  • Russia is spending more than 5,200 million euros on the construction of infrastructure for the 2018 World Cup.
  • The Spanish food industry’s exports to Russia increased by 10.7% between January and May 2012 (8,452 million euros), according to the FIAB.
  • There will be 60 million Russian travellers in 2016, according to Ivattur.
  • The Russian tourist market is growing six times faster than other Western European countries, according to a study by Hilton.
  • Russian tourists have a great deal of purchasing power. In 2011 they spent about 32.4 million dollars, up 21% from the previous year.

MONTSE GARCÍA

Font: images of the city’s Office of Tourism Russia