An increase in exports of goods and services is one of the key areas of Russia's development before 2024. In an interview to RIA Voronezh, Head of the Department of Industry and Transport of the Voronezh Region Alexander Desyatirikov told what the region exported and to which countries, what the benefit from export was and how the authorities supported it.
– Alexander Nikolaevich, why should our region sell something abroad?
– We produce gross regional product (GRP), and it needs to be used. The ideal situation is when a region is a box in which raw materials enter and from which finished products come out while the entire added value remains inside. This is what we’re striving for.
– What goods do we export?
– The bulk of our exports are chemical products and rubber. The second place is taken by agricultural goods. Next is engineering products followed by everything else. Generally speaking, we export almost everything: from rubber and bridge structures to electronic components.
– The products of OJSC "Voronezhsintezkauchuk" are in high demand in the global rubber market. About 70% of all the products are exported by Voronezh enterprise SIBUR to Europe, Asia, and America. Among our customers are such tire-producing holding companies as Michelin, Bridgestone, Nokian Tires, and Continental. We conduct tours for major customers. Among the guests are Pirelli, Yokohama, and others. For example, in June, our company was visited by the purchaser of thermoplastic elastomers ICOPAL with a scheduled audit. Its representatives took a look at how the production, quality control, storage and warehousing of thermoplastic elastomers were organized.
General Director of the Voronezh enterprise SIBUR (Voronezhsintezkauchuk)
– To which countries mainly?
– The main volume of export products of the Voronezh Region in 2019 is shipped to Ukraine – 22.7% of the total exports, to Latvia – 9.4%, to Egypt and Poland – 6.8% each.
– Are Voronezh products shipped to exotic countries?
– We do not think of any state as exotic for us. I do not rule out the possibility of finding our products even in Burkina Faso – it is difficult to find out the final “geography” of the shipments. I’ve worked abroad a lot and have seen Voronezh goods there. In Morocco, for example, I found cable and packaging products made in the Voronezh Region.
– Does Voronezh have brand products as an exporter?
– In case of agricultural processing, this is Vkusnoteevo dairy products. I’ve seen them almost everywhere within the neighboring countries – for example, in Abkhazia. And in case of heavy industry, this is Voronezhstalmost and the well-known Voronezh enterprise OOO “Siemens Transformatory”, since there are very few transformer plants in Russia – each of them has its own business-forming customer.
– In China, where didn’t use to be the basis of nutrition, it is gradually becoming a popular product. This creates new export opportunities. We still know little of the Chinese market from the perspective of products for the end consumer. They may have a demand for cheeses. Yogurts are of interest, but there are nuances: they may consider a yogurt what we don’t. There is an understanding that products must have a shelf life of at least six months or even a year.
General Director of Molvest Company
– Does the Voronezh Region have any special features as an exporter?
– We have no oil, gas, and altogether very few resources that can simply be extracted. Therefore, our main value is people and what they can invent and produce. Our exporting enterprises are divided into two large classes. The first is traditional exporters (“Minudobreniya”, “Voronezhsintezkauchuk”, the Voronezh Tire Plant). They usually produce semi-finished products. That is, it is no longer raw materials, but also not the final product for consumers. And the second class is a number of smaller enterprises that export high-tech products – for example, SC “VSP-Mikron” and VZPP “Sborka”, which produce crystals for electronic products. About 40% of their crystals are exported, mainly sent to China and Taiwan. We also export cable fiber optic products.
– Exports are the most important component of our work – the volume of export sales is up to 40%. We produce crystals (chips) of electronic components (diodes, transistors, voltage limiters and regulators, and much more) on silicon wafers with a diameter of 100 and 150 mm. The products are exported to China, Hong Kong, Taiwan, South Korea, Germany, and – small volumes – to the USA. For example, Voronezh residents can find Voronezh crystals in Samsung and Lenovo smartphones, Audi cars. The Russian market of electronics and electronic components is limited. So enterprises engaged in microelectronics need to develop in the competitive global market. Therefore, it is important that the export of microelectronics is supported both at the federal and regional levels.
Commercial Director of SC “VSP-Mikron"
– How large are export volumes in the region? How have they changed lately?
– In 2018, the volume of exported industrial products amounted to $ 1.029 billion. Compared to 2016, it has increased by 32.6%. And we are aimed at further growth. According to the national project, by the end of 2024, the region should reach $ 2.006 billion in industrial exports.
– Is this a lot or a little in comparison with the indicators defined by the national project “International Cooperation and Export” for other regions?
– The number set for the Voronezh Region ($ 2.006 billion) is at one of the highest levels. For example, for the Republic of Khakassia, the target value is $ 0.0447 billion, for the Tomsk Region – $ 0.288 billion, for the Kirov Region – $ 1.576 billion. At the same time, there are regions with higher target values set for them. For example, for the Rostov Region it is $ 3.861 billion, and for the Lipetsk Region – $ 5.2435 billion.
– Is export a domain of large enterprises, or do medium and small businesses also have a chance to enter the foreign market?
– Certainly, small and medium enterprises have prospects for export. We are having a big discussion with them about this. Of course, exporting goods abroad is not cheap. The main problem is that all foreign markets protect themselves with certification. That is, to enter a country’s market, it is not enough for our manufacturer to just physically ship his product there. In order for his goods to be accepted by retail chains, he will have to get a certificate. Often, Europeans protect themselves from manufacturers from other countries with such certificates, making the cost of entering the market high. And in the near future, we are going to introduce state support measures that will compensate manufacturers for part of this certification’s cost. In general, there are many difficulties in entering foreign markets. This is much more complicated than being engaged in import substitution here. But one must understand that export-oriented products are automatically import-substituting.
– We could bring cheese, milk, and butter to China in the near future. It is possible that we will create some kinds of dairy products specifically for the Chinese market. This year we took part in the international exhibition SIAL CHINA. In Shanghai, it became obvious that there were no prospects in shipping dried milk or monolithic butter: our prices are high compared to Belarusians or New Zealanders. About 80% of dairy products for China come from Australia or New Zealand, the rest – from European countries. The leader among them is Germany, which has signed an agreement with China on a duty-free supply of food products. Russian manufacturers, on the contrary, are subject to import duty plus tax. The logistics component is important to us. The fastest option is trucking. But its cost is 50 rubles per kilogram, which actually means for a package of milk. The second and most elaborated opportunity is shipping by sea. That’s 10 rubles per kilogram, but it takes 55-60 days. And retail networks give you a discount if there is half or a third of the shelf life yet. The logistic path we are counting on and which is not yet available is the railroad. The issue of creating the so-called "Silk Road" through Moscow and Kazakhstan to Urumqi in China is currently being considered.
Deputy General Director for Marketing of Molvest Company
– What export support measures are planned to be implemented in the Voronezh Region in the near future?
– The Ministry of Industry and Trade of Russia has developed a new procedure for supporting enterprises as part of the federal project “Industrial Export”. It provides state support to organizations that implement competitiveness improvement programs aimed at increasing production and export volumes. Enterprises will be able to obtain preferential loans for investment financing of projects for organizing export-oriented production in our region and for creating their plants in other countries. In 2019, exporters will be able to receive subsidies up to 4.5% of the bank’s commercial rate. 327 billion rubles were allocated for these purposes for the 2019-2024 period. We have already conducted a qualifications-based selection of enterprises that could be included in this program. The creation of clusters and special economic zones also has a positive effect on exports. And we also try to bring information about Voronezh goods to the potential partners — we organize exhibitions, fairs, and conferences. For example, the Voronezh Industrial Forum was attended by 5.5 thousand visitors this year. Among them were the delegations of the Republic of Belarus and Germany.