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In the East, everything is just beginning

President of the corporation "TechnoNIKOL" Sergei Kolesnikov - on the development of business in the Far East

In the East, everything is just beginning
Photo: Press service of the corporation "TechnoNICOLE"
- Enterprises of the TechnoNICOL Group have become one of the first residents of the territories of advanced development in the Far East. Can you estimate now, how much is this a good mechanism for attracting investors?
- A very successful tool, I believe, is one of the strongest. I think that if it were not for him, there would not have been any reasons for coming to the east. For us, this has turned into a reduction in the payback period of the stone wool construction project, conditionally, from 10 to 7 years. I am sure that in other business projects this significantly reduces the payback period and makes the commercial project attractive. And this, I think, is a powerful incentive, why come to the TOP. Of course, in fact there are problems: with infrastructure, with the regime. Their weight is still unresolved problems. And Deputy Prime Minister Yuri Trutnev honestly says that the problems are the sea, and tries to solve them, although all this is slow.

- Without the fact that the state created the TOR regimes, would you start building new production facilities in the Far East?
"I am sure that we would modernize the stone wool plant, and we would not even launch new production facilities." Once Andrei Belousov said that the famous Russian "dashing 90-e" with their lawlessness in the Far East ended only recently. I agree: for me personally, they ended in 2014, with the arrival of a new team for the development of the Far East in the Russian government. So in fact in the east of the country, it all started, and the mechanism of TOP in this sense is a powerful pendulum. In my opinion, if it were not for these regimes, the interest that Russian, Japanese and other investors are showing now to the Far East, even if it did not happen - there would be nothing to talk about, there was not a single carrot.

- What is happening now on the construction markets of Asia and how do the plans of your group of companies to develop business in the Far East look like in this regard?
- Now TechnoNICOL receives about a third of its revenues from foreign markets. The markets that interest us are growing: the new cyclical upswing in the European Union, I hope, will last for 7 more years, and the building materials market there is in a strong phase, as in China.

Therefore, we are looking for happiness in the European Union, since it is closer, and we are taking our first steps in China. Our goal in Asia is to export 20% of the products manufactured by the enterprise in Khabarovsk. So far we sell up to 95% of our production in the Russian Far East. It is not easy to develop supplies to China.

- What are the main difficulties?
- There are few automobile crossings on the Russian-Chinese border, the carrying capacity is not high. That's why we are very supportive of the idea of ​​creating a cargo checkpoint on the Great Ussuri island - this would allow us not to wind extra kilometers from Khabarovsk to checkpoints in Primorye. The second problem: crossing the border, the products need to be reloaded into Chinese vehicles. An intergovernmental agreement that trucking from Russia can carry cargo across China, as in the case, for example, with the European Union, we still do not have. And in China we pay a higher import duty than in Europe - this is another plus of 12-15% to the price.

- Nevertheless, TechnoNIKOL is building two more production facilities in the Far East. Will they focus on the domestic market?
- We are now building two polystyrene waste processing plants: we will make secondary polystyrene and drainage systems made of PVC plastic (pipes, chutes, transition elements). There are no plans to export PVC products - it is very light, in fact it is only air boxes, and is designed for transportation in a small area, from Chita or Yakutsk to Vladivostok. Secondary polystyrene, most likely, will be for own consumption.

- But you expect to increase the export of the main products - stone wool?
- Stone wool in comparison with these manufactures is more technological product. And we hope that we will be able to find a consumer in South Korea, Japan and Vietnam. While 30% of capacity in Khabarovsk on stone wool is free. On average, we export 20% of the volume of products produced by all enterprises of the group in Russia. And we expect to reach such indicators in the Far East as well.

- Do you view India as a potential market? 
- Transportation tariff Far East - Mumbai is 2-3 times more expensive than the tariff from Vyborg to Mumbai. Therefore, although the distance is less, while such costs remain, it is easier for us to supply products to India from the western part of the country.

- The costs in the Far East are higher for everything: for the maintenance of cadres, for electricity. Somehow it's unfair, do not you think? How to deal with this business? 
- With the staff was difficult, it became easier. We solved this problem for ourselves, but for a new company it will be a problem. In general, we, entrepreneurs, must survive and act positively proceeding from any conditions. Electricity in the Far East is higher, labor power is higher - economically it can be explained why it is so. Markets are extremely heavily distributed over a vast territory, the population density is low, and the industry is based on economies of scale: the higher your output, the lower the conditional cost. In the Far East, transportation costs for the distribution of products over a large area are enormous, and therefore no one can show this scale effect. It is simply impossible to supply a large technological complex. We have a factory in Ryazan producing 4 million cubic meters. m, and they are not enough, and in Khabarovsk - only 700 thousand cubic meters. m, and 30% of production is superfluous. Obviously, the price per unit of specific output is higher. The same is with energy, with specialists. But our task, businessmen, is very practical - in a tight time, with a tight budget to fulfill the goal. You know how to run a marathon. We, entrepreneurs, are working with practical tasks.

- In other words, do you normally perceive that it is more difficult to build a business in the Far East?
- The Far East, Pacific Russia is another Russia: there are other local and foreign markets, other regulations, other neighbors. This is the first. Both Moscow and Vladivostok are two different agglomerations. So I see no reason to make the same laws in Moscow and the Far East. The question is to raise the average standard of living, use these or other features, because in the Far East, there are pluses, as in Moscow. Why do we need to do everything the same inside the country? I hear a lot of such conversations. But I too can not make the cost price in Khabarovsk, as in Ryazan, for a variety of reasons.

- In your opinion, what should be done to ensure that people come to the Far East first to work, and then to stay forever? Authorities say you need to give salaries twice as much as at least.
- If we pay twice as much, then some of the projects will be simply unprofitable. This is a problem that does not have an unambiguous answer. This is a balance of interests. I think we have many federal decisions, which in fact do not need either Moscow or the Far East. Therefore, it is necessary to give more powers and more budgets on the ground. As they say, help us better with money, we will manage it ourselves. And what shows the Far East, where now the highest growth rates of investment per capita, shows that still something can be done about it.

Published in the journal "Economics of the Far East"
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