*What are the major trends in economic relations between Russia and Germany for the past 2 years? Development or regression?
Definitely development. The growth of German investment in the Russian economy confirms this. Despite Western sanctions and Russian counter-sanctions, the German direct investment in the Russian economy in 2018 equalled 3.2 billion euros.
For the past 10 years this is a record figure since the 2008 financial crisis and also one of the best figures since the collapse of the USSR. We are very pleased with the state of the current affairs and look forward to further growth. For German businesses, the Russian market is still very attractive.
Another important trend is the course towards localization of German production in Russia. In April, a Mercedes-Benz plant was launched in the Moscow region. Over the course of the past five years, Volkswagen has invested more than half a billion euros in development. In addition to major players, there are 3,500 German small and medium-sized companies operating in Russia, which build fabrics, create jobs and transfer know-how and technology.
A further trend is digitalization. Russia has a very high level of IT development regarding security and quality of digital services: banking, car sharing, payment for parking, digital public services. Germany leads in the fields of digitalization of the economy and industry 4.0. Russian and German businesses are working closely and are introducing the concept of "digital enterprises". For this reason, we launched the initiative GRID (German-Russian Initiative for Digitalization of the economy) to digitize the Russian economy and share experiences.
How does the majority of the German society currently see their relationship with Russia (in regard to doing business with Russia)?
Generally, German businesses feel comfortable in Russia: according to our business climate survey, German companies are overall satisfied with their own economic situation: 41% rate it as good or very good, 47% of respondents as satisfactory and only 13% as bad. A large number of companies were able to increase their turnover. German enterprises, as before, demonstrate their commitment to the Russian market on the long term.
This attitude leads back to history, since German businesses have been investing in Russia for over 100 years. As for the German-Russian Chamber of Commerce Abroad (AHK), the largest foreign business association in Russia, we could increase the number of our members by about 5% to almost 900 firms by the end of last year. In the same year, after 25 years of being present in Russia, we acquired our own property in the Fili Grad business centre, since we understand that German companies are developing serious plans for many decades in Russia.
German company wants to enter the Russian market. What are the first steps and what does the company need to know?
A strategically correct first step for a German company on the Russian market will be to turn to AHK, since entering the Russian market and working in Russia is associated with overcoming a number of obstacles and should be well planned and thought out. Here we connect and help German companies master the Russian market. As the main partner for German business in Russia, we offer exclusive solutions designed specifically for each company on an individual basis.
What is the role of the German Chamber of Commerce Abroad (AHK) during this process? How can you help specifically?
For a new company on the Russian market AHK will be the link between politicians and decision-making institutions in both Russia and Germany. At the same time, we also offer a wide range of services: from opening a business representation or production sites in Russia and recruiting staff, to legal consulting, searching for business partners, customers and suppliers in Russia. Without these measures, a foreign company in an unfamiliar economic environment will find it very difficult to enter the market successfully.
A further major advantage for the new company will be the business communication and the establishment of business contacts with industry experts through our committees and working groups, as well as on our more than 200 annual events.
In addition, when becoming a member of the German-Russian Chamber of Commerce, a new company on the Russian market receives access to the exclusive newsletter "AHK Morning Telegram", which informs about all important trends twice a week.
Companies from which industries most actively target the Russian market?
Basically, from all kinds. However, the currently most promising areas are the chemical industry, the pharmaceutical industry and the health care sector, as well as waste processing technologies and agriculture. For example, the German-Russian company EkoNiva which was created by German citizen Stefan Dürr in 1994, today is the leader in milk production in Russia and Europe and is among the world’s eight largest milk producers. In other words, a German farmer came to Russia, founded a farm for seven cows, and then grew to the largest milk producer in Europe. This is a success story.
*Alina Kudelina - Overseas and Marketing manager of the "ROSMOLD" exhibition