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Sergey Kolesnikov: problems are being solved in the Far East for a long time
Co-owner and managing partner of TECHNONICOL corporation Sergey Kolesnikov - about infrastructure problems faced by business in the Far East
For the company that connects its future with the Far East, exports to Asia and around the world, the logic of business dictates the obvious - production should be located in the Far Eastern Federal District. The authorities promise such enterprises a maximum of preferences, TORs, FPV ... but in TORs it becomes cramped, crossing the land border to China turns into a quest, and infrastructure problems have not been solved for years. Reality through the eyes of a practitioner.
- Sergey Anatolyevich, an upsurge in construction is expected in the Far East, both industrial and residential. Do you see prospects for yourself in these conditions?
- Yes, of course, state construction is driving the demand for building materials, and we see several drivers: this is housing construction within the framework of the National Housing Construction program, the second is the construction of large corporate facilities, from gas processing plants to projects that are made by smaller investors, and the third is a convenient location of Vladivostok, Primorsky Krai for export to the Asia-Pacific region. The port zone and even the land border with China is located in the Primorsky Territory, as well as the supply of construction materials by the Northern Sea route to the Arctic zone, where a huge construction of both state infrastructure and facilities erected by large companies - Rosneft, NOVATEK, is also planned. Gazprom, and there are only two delivery options: either through Krasnoyarsk along the Lena River, or, in fact, by the Northern Sea Route, this, in my opinion, will be more advantageous in the future. Well, and the local construction market. I must say that both the Khabarovsk Territory and the Primorye Territory are actively being built, and for this, it is naturally wiser to produce materials directly on site, and we will build new production shops, new facilities.
- You spoke about plans to invest - 60 billion rubles. Where will it be spent?
- Yes, we want to invest 60 billion over 5 years, the company will invest, of course, throughout the entire territory of its presence - from Vladivostok to London. It is clear that we are allocating a slightly smaller amount to Vladivostok, we are thinking of investing about 4 billion in these years for Far Eastern projects. This, in particular, is the reconstruction of the Khabarovsk plant for the production of mineral insulation - we have an old line there, a plant in Primorye, as well as a training center. This is the first thing we want to do, perhaps later we will develop other areas, we will also build other plants.
- At our last meeting, you said that you will think about supplying part of what is produced in the Far East to China, somehow fitting into the Chinese market, although it is very difficult. Have you come up with something new during this time? Or is it a pandemic year, and not yet up to such plans?
- The share of exports remains at the same level - about 7%. Not that China disappointed us greatly, rather not, but we just saw that besides China, there are other interesting destinations / markets: Australia, New Zealand, Japan, Korea, Vietnam.
- Is it profitable taking into account the logistics costs?
- Yes, now we deliver to Australia from Vyborg, because it is more profitable than shipping from Khabarovsk. In the future, I hope, we will be able to reduce the logistics shoulder through supplies from Primorye.
- I must say that 4,2 million people live in New Zealand - and you should not be surprised - not all of the building materials industry is represented there. They have historically bought a lot either in Europe or China or the United States. And for Australians, deliveries of 5-6 weeks are common.
Of course, for China, when they need “yesterday” and you have to ship a huge amount of materials in a day, the problem of border crossings is fundamentally important. Unfortunately, in 5 years we have heard more promises ... Even Rosgranitsa said about this that the money was allocated in 2019 - at most in 2020 they will solve this problem, but now they are referring to the pandemic. If anything kills our faith, these are promises that are not fulfilled. They promise and don't. Now there is actually a 50-70% lag from the plans that were announced.
Over the past six years, nothing has changed at the border. There are problems with bringing the infrastructure directly to the ASEZ - gas, electricity, highways and so on.- And which specific TORs concerns, which ones are you talking about now?
- "Nadezhdinskaya", for example, and other TOPs. We actually studied the situation in all the ASEZs of the Primorsky Territory.
- Did you want to come in? For what purpose was it examined?
- We wanted to buy land in the TOP "Nadezhdinskaya" in order to build a complex there. Yes, there is gas there, but this gas has already been assigned to existing residents. And in order to enter, you need a new resource, but there is none. Therefore, I can say that yes, the one that was the resource, it has already been chosen by the residents. But if we want residents to come, then we need ...
- Representatives of the authorities always say: "You just come, invest, and we will do everything, we have everything ... here we will do everything ... from the point of view of infrastructure."
- We were told the same: "You build, and then we will kind of compensate." We built a railway to the enterprise in 2014 and still cannot use it, not because there is no road, but because we cannot go through the bureaucracy, we cannot legalize it. Because of this, we have to transport by cars instead of the railway. Seven years have passed. Either the KRDV administration will be replaced, or the Town Planning Code. In general, seven years have passed, we do not use the road.Let's say we did a project in Poland. Everything that the Polish authorities promised, they did, and they did it on time. We built the plant, they made communications, and I must say that they did not let us down.
I state only one thing, that in Poland and even in the central part of Russia, infrastructure problems are being solved. In the Moscow region we have a project, in Ryazan there is a project, in Poland there is a project, in other places ... And there are also problems there, but they are being solved. Well, in Poland it was not at all. And in the Far East you will not solve them in a year, that is the problem.
- Are there any problems with labor resources? Or what you have named are the most key ones, but would you decide with labor?
- Human resources is less problematic due to the fact that the company has the ability to mobilize human resources. We connect the most experienced specialists from other regions - Siberia, the Urals, Central Russia or to new production facilities. It is clear that line personnel - 80% of employees are recruited locally, but the main specialists, those who have been with us for several years, we invite from other cities. They will share knowledge and teach newly recruited personnel to work with technological equipment.
- How do you generally consider the problem of staff payment? They say that investors will come to the Far East, and life there will be better, because these investors will pay salaries much higher than in the central part of Russia. But is it not profitable for you? If you hire staff, then you pay more than, say, the European part of Russia, and how much, if so?
- We, of course, pay salaries on the market. At the moment, salaries in Khabarovsk are indeed 20% higher.
- But not twice?
- Not. In any case, this excess is not as costly for the company as the cost of logistics for the delivery of goods from here. This is not so significant, especially since the TOR regime compensates for the social tax rate. It provides other benefits, so the total preferential taxation regime in the Far East gives more preferences than the cost of a higher salary, not to mention the fact that you significantly save on delivery time and logistics. Therefore, if we want to work in the Far East, we must have enterprises in the Far East, if we want to export to China and Asia, we must have preferences in the Far East. This is an axiom.
- But you will look at how the situation will develop, and then will you make decisions?
- We will be in full contact with the governors, with representatives of the KRDV, we will go to Trutnev and either say "thank you", or we will look for territory. Until we find a territory for construction, we will make efforts to this, and if we find it, then we will build it. When we build it, we will say “thank you” that we did it together, since this is not only a task for our company, it is a common task for us, including the authorities of the Far East and other investors, so that we jointly build a new production facility. Well, as they say, one is not a warrior in the field. We ourselves cannot cope with this problem without the help of the authorities.
- You personally, as a private investor, invest in Yakutia as well - in silver mining, as an investor are you satisfied?
- Yes. As an investor in a mining company. But, I do not see there great opportunities for the development of industry, as well as in Kamchatka. There are no industrial resources, there is no sales market, there is no transport infrastructure, there is no cheap logistics. Therefore, when someone starts dreaming about building a large-scale mass industry in Kamchatka and Yakutia, I honestly do not agree with this ... I see two regions in the Far East for the development of industry with export potential - this is Primorye and Khabarovsk region. They make it possible to export to the Asia-Pacific region and supply products to the north along the Northern Sea Route.
- And the Arctic does not appeal to you for investment, are these Arctic regions?
- It is easier to make in Primorye and deliver to different regions than to do there.
- Deliver through the Northern Sea Route, what to do there, in the north?
- Sure. It is easier to make in Primorye and deliver a product there than to try to organize production there. Because we will face the same set of problems there, but all this will be terribly expensive, because there is no electricity or gas, and even more so there are no people, living conditions are very bad.
- And if the problems with Rosgranitsa are magically resolved, including, and somehow all this will be solved on the sly, you will expand production in Primorye in order to somehow expand exports and plan deliveries to China and other countries ?
- Undoubtedly, the fewer bottlenecks, the more capital will be attracted. I am sure that other investors will also react to this: Koreans, Chinese and Japanese. The problem is that we are very practical people, that is, we can keep silent, we hear promises, but we react when we understand that the projects are realizable and the given promises are being fulfilled and….
- There is movement.
- Yes. We cannot build factories in the fields without gas and electricity. It is nonsense to ask an investor about it. You can, of course, build in the field, but again - how can you carry building materials there if there is no road? Without solving these issues, the problem will not move, and words cannot solve it, this requires concrete actions. And I have been going to VEF for the sixth year, and for the sixth year I have heard the same speeches. Unfortunately, the infrastructure situation has been slow to resolve.
- The final question. In the last interview, we talked a lot about respect for businessmen, for people who create jobs, pay taxes, for young people to go into business, you somehow even spoke about this with pain somewhere. And during this time, perhaps three years, we have not seen each other, is the situation changing for the better or not?
- In general, the situation is changing. They really began to treat us better, the administrative pressure is falling, from my point of view, this is positive. The only thing that I noticed is that young people do not seek to work in industries; when choosing an employer from a particular field, they prefer trade and IT. They have an outdated view of the industry. In their understanding, work at a factory is constant noise and dirt, low wages. But this is no longer the case - modern production means cleanliness, maximum automation and safety.
We, probably, as a society or as industrialists, have lost the battle for minds. For some reason, the media, ours, not ours, our partners have hammered into the heads of our youth that Russian industry is dead, that we are poor, that we can do nothing. You have to do something about this. We must tell young people that the Russian industry exists, it is very modern and in many industries, in particular in the field of building materials, in many things we are ahead of our neighbors! That it is fashionable to work in industry, that the average salary in companies is over 60 thousand rubles, and specialists receive over 100 thousand, this is a paid job, technological, interesting, specialists of different qualifications are required: programmers, chemists-technologists, electronic engineers. This is a promising, interesting industry that requires more and more personnel, the industry will develop, and it is worthy of the attention of our young people. These are clean, safe workplaces, these are very interesting technologically new workshops, and these are very young teams, the average age in our company is 35 years.
The image of the industry needs to be changed, and I really want you as the media and your colleagues in the shop to talk about this so that the authorities will pick up on it. It's not a shame to work in factories. This is prestigious. We are the elite of the economy, we are part of the elite, and we need to talk about this, and do not be shy about the words “elite”.