Main | Archive | Issue 2/2008
Chamber Gains Foothold in Siberia
Column: Under The Sign Of Mercury
On January 15, a news conference devoted to the opening of a bureau of the German Business Representative Office in Russia was held with the support of the FRG Consulate General in Novosibirsk. Michael Harms, head of the German Business Representative Office in the RF, Yury Sorokin, head of the Novosibirsk bureau, and Michael Kantzler, Consul General of the FRG in Novosibirsk, took questions of journalists. The news conference went on as follows.
How would you characterize the activity of the German business in Siberia, in general, and in Novosibirsk, in particular?
M. Harms: We record an increased activity of German enterprises in Russian regions, specifically in the Novosibirsk Oblast. I’m therefore happy that we have succeeded in opening a new branch office here within a very short time with the assistance of the Consulate General. Speaking with the plenipotentiary envoy of the RF President in the Siberian Federal District (SFO) and the Governor of the region, we convinced ourselves of the interest Siberians show in the joint implementation of concrete projects.
Infrastructure, high-tech manufacturing units, agriculture, foodstuff production, medicine, and logistics are priority areas. The Governor and I agreed that the time of empty talk was over and we should get down to business.
Could you please give us instances of already implemented successful projects of German-Russian interaction in business?
Yu. Sorokin: A window section manufacturing plant under the VEKA brand can be characterized as the best known project. Today, the company’s top management is mostly made up of Russians.
M.Kantzler: We can also mention the DMG training center at the Novosibirsk State Technological University where the students learn to handle state-of-the-art machine tools.
What are Siberia’s chances, along, for instance, with China’s chances to admit German light-industry enterprises?
M. Harms: I think in this sense Siberia has no big chances due to very high local transportation costs and the fairly expensive labor force. In this case Romania, Moldavia, Ukraine, and China are in a far more winning position. But, on the other hand, Siberia has a good chance of manufacturing goods with high value added and with low transportation costs.
Such as watches?
M. Harms: No (he laughs). Pills would be better: they are both small and pricey. Novosibirsk has a good intellectual potential to launch pharmaceuticals production. You see, any company may have two reasons to transfer production to another country: money saving or providing services for the internal markets of the area where a new production unit is built. It is hardly possible to save money in Siberia, but, on the other hand, there are plenty of fairly receptive and broad domestic markets in Russia.
Does your Chamber intend to work with small and medium-sized businesses in Siberia, and if so, in which of the regions you have just mentioned?
M. Harms: You see, in Siberia and Germany the idea of what a small and mid-sized business is all about is totally different. The bulk of the German mid-sized enterprises are focused on their narrow niche; many of them are even leaders in their particular sub-branch. In Siberia it’s mostly retail and small services. In Germany this kind of enterprises make up a great part of the country’s economic potential, while in Russia the small and medium-sized businesses are as yet only an emerging sector of the economy.
Russia and Siberia, in particular, still lack middle-sized and small enterprises in the sector of high-tech manufacturing units. One of the Novosibirsk-based software design companies exemplifies its relevance. Its stand at the Hannover exhibition was a resounding success. Overall, our Chamber provides services mostly for German mid-sized and small business. The Siemens Corporation or any other industrial major are in a position to promote their interests on their own without our help.
Germany supplies equipment to Siberia, and what does it receive from Siberia?
Yu. Sorokin: Equipment, chemical products and farming produce are the main items of our exports to Germany.
What are the plans of the German Business Representative Office in Novosibirsk for 2008?
M. Harms: First, our objective is to set up an effective structure of interaction of German and Russian companies. By the way, there are some 50 companies with predominantly German capital that are stably operating in Siberia. The total number of enterprises based in the whole of the Siberian Federal District exceeds 100. Second, we are planning to promote a series of major investment projects in the branches I listed above. There is already some progress in this area, and we have got the backing of the regional authorities. And third, we intend to make a presentation of the Siberian Federal District and Novosibirsk at a major investment exhibition in Germany in the second half of this year.