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Friday, April 13, 2018

Alex Rowers: After the fall of the ruble in Russia to produce become profitable

“We all cry, we all terrible. But actually in Russia is the mass of events that evoke pride,” – said the newspaper VIEW Chairman of the Association “Russian Outdor Group” Alexey Rowers. Statistics shows the growth of industrial production in Russia and the Rowers in certain examples, thereby reviving the Russian light industry.

In December 2016 industrial production showed maximum in the last two years increased by 3.2% compared with the previous year, according to Rosstat. Given that industrial production in November rose 2.7%, it is possible to speak about growth for two consecutive months.

Production is always a headache. However, the guys took and spent the money on a new yacht, and the creation of the modern production

Thus, by the end of 2016, Russia has managed to eliminate the decline in production observed during the year, particularly in the manufacturing sector, keeping it at the level of 2015.

Industrial production growth was ensured not only cold weather, so it is logical to increased energy production. Your significant contribution has made and light industry. “In the manufacturing level last year exceeded the industries oriented to the domestic market: food processing, textile and garments, leather goods, footwear, wood processing and manufacture of wood products, pulp and paper and chemical manufacturing, manufacture of rubber and plastic products, automobiles, furniture,” – said in the message of Rosstat.

In light industry after years of crisis due to the influx of imports now, on the contrary, there are tendencies to improve the situation, including through state support. In the last few years have significantly improved the interaction between government and industry that begins to bear fruit. For example, in 2017 according to the plan the government will allocate 500 million rubles for subsidies to light industry to compensate for part of the cost to service the loans.

About how in Russia, despite the crisis, there are new high-tech production of goods for active rest with the VZGLYAD newspaper said the Chairman of the Board of the nonprofit Association of suppliers of goods and services for tourism and active recreation “Russian Outdor Group” Alexey Rowers.

OPINION: There are companies that, despite the crisis, built his business from scratch and even flourished in difficult economic times?

Alex Rowers: My goal is to find young Russian companies, which produce the most high-tech and high-quality equipment using the latest technology and equipment. Further, using the support of the Ministry of industry and trade and “Business Russia”, help them to show their product at the best venues. And these guys that are actually created from scratch in Russia high-tech production, actually a lot.

For example, in conjunction with the Ministry of industry and trade at the largest trade fair ISPO in Germany will take place the third Russian Outdoor village, which will feature just such Russian high-tech production. On the Russian stand will be presented in the order of 35 Russian companies. This allows to break the myth of the “country gas station” and to attract foreign partners in the Russian production.

Some companies have existed for years, but many have formed over the past few years. But we really made a fairly big leap.

For example, a small firm from Ekaterinburg Dragon Fly. They five years ago began producing clothes for snowmobiles and motorcycles. I found them two years ago at one of the exhibitions. They had a very small booth, but I was impressed with the quality and level things they do. And recently I pulled them out to the forum of light industry prepared by the Ministry of industry and trade. And all who saw what they sew, was just amazed. By the way, the Ural guy Sergey Karjakin won the Dakar rally 2017 in the suit that made the guys from Dragon Fly.

OPINION: Their business is in crisis went up the hill? How do they survive?

A. G.: the State for the last two or three years invested a lot of money in light industry, and now began to appear the first results of this work. And rarity is that they produce products in Russia (and not in China, for example). Yes, until the foreign materials because the materials of this class are just beginning to have to make, but the production itself is on Russia.

Alex Rowers: My goal is to find young Russian companies, which produce the most high-tech and high-quality equipment using the latest technologies and equipment (photo: from personal archive)

We have businesses such as BTK (the Russian holding company of the light industry), which are sewing monsters, but they can’t survive on money earned on the free market. They live at the expense of orders from the state. They are important because wear our military. And such a small company like Dragon Fly, survive solely on their own. What they have produced and sold, the money exist. They are not subsidized by any government orders. They can’t do bad, as ruined at the time.

OPINION: There are examples of creating or upgrading factories from scratch in a crisis?

A. G.: for Example, the Yaroslavl textile factory. People took a dying textile factory and started the production of underwear of high quality. For this, they found the manufacturers of woolen yarn and helped them modernize production. Plus began to use the latest synthetic fiber.

There, in Yaroslavl, a factory producing shoes for cross-country skiing Spine. There was a former factory for the production of boots for the military, which has already cut into the offices. But came the young guys, has converted the plant and began to produce Jogging shoes. And what you see in major retail chains, is for the most part produced in this factory. They also produce all sorts of cutting-edge systems for skating, use the platform for mounting of two main bases SNS and NNN, and about the old standard for 75 mm is not forgotten. They are made up of high quality shoes, using the most modern materials – some of them are Russian, part of foreign production. Now, our company is one of the largest manufacturers of Jogging shoes in the world. At a recent forum of light industry Minister of industry Denis Manturov at first did not even believe that these shoes are manufactured in Russia.

To boots produced in Russia beautiful cross country skiing at the STC factory in Balabanovo. So even in “Decathlon” recognize that a comprehensive set of skis plus boots plus stick better and cheaper anywhere in the world to produce.

Or there is the Kazan guys from the company “Charge”, which is also from scratch began to be made from our carbon fiber composite sticks for hockey world level. Them three or four years. They reached great heights.

There are examples of production in Russia modern shoes (“Track”), caps (“Satela” and “Canoe”), silk scarves with amazing prints ski clothing (Stayer) and many others.

Another interesting and revealing example. The owners of the shopping center furniture “Grand” in the Moscow region decided to invest in production. The main business for them is a commercial real estate lease space in the shopping center. Production is always a headache. However, the guys took and spent the money on a new yacht, and the creation of the modern production. They bought an indoor plant and the most expensive equipment and are now producing all kinds of socks, from normal to sport. The people are still trying to think about the soul, not just about the money.

Or the guys from “Triton”, which began to produce titanium Bicycle frames. They cook them here, in Moscow, in a small workshop. Other spare parts for the bikes they buy in Japan and China. The average cost of their bike – 5-10 thousand dollars. But it really is a high-tech manufacturing. Besides them, I don’t know anyone who would produce a titanium frame in Russia.

OPINION: why titanium frame on bike and who is buying these expensive items?

A. G.: the fact that now everyone is struggling to make the bike as light as possible and durable. These characteristics are, first steel, then aluminum frames, and titanium are the best. These frames buy, of course, athletes. Of course, such expensive bike for people who have money burning the hands. These are the “Maybach” or “Bentley” of bikes. What is happening in Russia is, of course, piece of luxury things, but the production is also zero and in Russia.

OPINION: is high-tech domestic production? What successes we have achieved?

A. G.: Yes. We help industry and trade to do the exhibition in the outdoor segment in Russia and abroad. And it turned out that we have companies that operate at the level of world standards, in terms of understanding high technology in the light industry. And gradually begin to catch up with the manufacturers of fabrics, accessories and other components. Russia is starting to close in a number of directions, which three years ago did not even exist.

At international exhibitions we display high grade of both production and technology. We are one of the leaders in the development of low-temperature clothes. Very few countries, where people don’t just go out into the cold of minus 45 degrees for a couple of hours while traveling, and work and live permanently in such conditions, and even eating ice cream. And in the selection of fabrics and insulation we can give odds to anyone. Look at models from the company “bask” and “Siver”. Canada quietly crying in the corner.

For example, we produce eiderdown, which is worth its weight in gold. Canada, Iceland and a couple of countries produce such feathers, and we are one of the leaders. In General, Russia can fully provide itself with high-quality fluff.

And, of course, the highest achievements in light industry are concentrated in the equipment for Alpine ascents. When you are at the height of eight thousand meters (the average person can go at a height, sitting in the airplane and looking out the window), then every extra gram of gear, any error in the choice of material, insulation, fittings or faulty production can cost you your life. Therefore, the most modern technology tested by climbers, and then it is used by military and other industries. And our people are one of the leaders in extreme tourism and alpinism, with a good basic education and Golden hands. Therefore, in Russia the school of creating such clothes was very strong.

What are the plans for the replacement of imported goods rossijskije good news – Russia has completely closed its requirements for synthetic insulation. In people, this is called “padding”, although it is, of course, has long been irrelevant to batting has. We have in the last few years, several factories, such as “World” or “termopol”. And it is the most advanced plants for the production of synthetic insulation, because the owners did not spare money and bought the latest imported equipment.

Before buying mainly old production lines, charged to overseas factories. Now try to put the most advanced. And this is very important. For example, why at one time we could easily prevent the chicken legs from the US? Because they have old production technologies: there are still carcasses treated with chlorine, and modern technologies require processing of cold steam. As soon as the Russian company bought the French and German complexes with modern equipment, Russia immediately was able to tell the Americans that we do not allow the “Bush legs” because of the chemical treatment. Now, we not just can provide ourselves fully chicken, but first appeared on foreign markets. On this path we begin to go and light industry.

OPINION: We can really compete with foreign markets in the segment of outdoor?

A. G.: In fact, the only our competitors are in Asia. Yes, in Europe, a lot of tech fabrics. But the finished products Europe produces. It’s funny, but in Russia for outdoor-industry produce more than the whole of Europe. For example, in the “Decathlon” of goods produced in Russia, two years ago it was 10%, now 20%. And that five million units. And the company expects to increase this percentage to 35%. Despite the fact that at home Decathlon in France products, made in France, 0.1 percent. All the rest is of Asian manufacture.

We are not fighting with Europe and with China and Vietnam. Here we are, of course, in a serious failure. However, when introduced, bradenburg, too, it turned out that we have a lot of things not his. But within three years it solved a lot of problems, and we began to climb out of the pit. And light industry, we can make the same leap.

“The quality of our products is no different from their Western counterparts, and the price is accessible in two and more times”

Especially after the fall of the ruble in Russia to produce become profitable. Energy costs are not as high as in the West, and hired labor is cheaper than in China. For example, a seamstress in Russia receives less. On average, in China, it now earns 400-600 $ per month. In Russia – 15-18 thousand rubles, that is 250-300 dollars. However, the performance we are three to four times lower. That is why until we have more profitable to produce more expensive high-tech stuff. One thing the pants to sew for one dollar, and another jacket, which in retail will cost 25-30 thousand rubles. The number of seams that cheap, in an expensive jacket is almost the same, the difference is small, but the cost of the product depends on the fabric, have been cut, design, as posted marketing.

LOOK: But after all, consumer demand in the crisis has fallen, who will buy them?

A. G.: Will. Because the quality of our products is no different from their Western counterparts, and at a price accessible to two or more times. For example, the company “bask” produces jackets type Canada Goose with very high quality down and synthetic insulation is expensive. Maximum this jacket is 38 thousand rubles. On average, from 15 to 27 thousand rubles. A lot. But foreign jacket canadian firm producing down jackets Canada Goose is from 80 to 120 thousand rubles. Or the cost of the ski suit of the Russian company Stayer – from 15 to 28 thousand rubles. Of the same fabrics, the same costumes, but Japanese manufacturers are about 60-80 thousand rubles.

In the segment of expensive high quality clothes of Russian products, of course, not a penny. Still, 30 thousand roubles – decent money. But at the same time is two to three times cheaper than the same garment, but made abroad.

OPINION: the quality of our products do not yield?

A. G.: On quality you will not be able to distinguish. When our Minister of trade and industry led through the exhibition in the forum of the light industry, he did not believe that all these goods are of Russian production. Just we also have companies that only design we also design and sew all in China, as well as Europeans. The clothes they have without much of technical stuff, nothing of itself is not terms of modern technology, but marketing is wonderful, well, for example, Bosco. But there are companies that sew in Russia clothes, and fabric, and “Schweik”, and technology is at the international level.

OPINION: we began to develop the export of Russian outdoorproducts? Possible new markets to conquer?

A. G.: Our producers for two consecutive years participate in the international exhibition of goods and ideas for active rest ISPO. And we have something there to show. But when we start talking that we need to enter foreign markets, I want to ask: “Guys, your market does not want to return back? At least half?”

Indeed, in the largest retail networks – “the Decathlon”, “Sportmaster”, “Adidas” – five years ago, 98% of the goods were of foreign production, and it is a huge turnover in the tens of billions. Now our products is in the retail more.

One example is IKEA. You know how in the network for sale of goods produced on the territory of the Russian Federation? As much as 60%, and tends to 70%. This is a huge figure. No country in the world where IKEA this is not. They are actively working with Russian factories for the production of plywood, furniture, goods. We all cry, we all terrible. But actually in Russia is the mass of events that evoke pride.

VIEW: This is encouraging?

A. G.: we will not Have another chance. If we do not do something we will say more about. We recently has a huge number of new brands and productions that we can really be proud of. Yes, some things we still to mind not brought, but a year or two we’ll get manufacturers to ignore for many commodity groups, as was the chicken.

Western comrades, who rush to lift the sanctions, spinal cord feel that even a little bit- and their goods in Russia is not needed. They really are in a panic. I know that with our German partners. Russia for them is really a big market. This is a big misconception that our share is small in some areas we had to cover 40% of them commodity groups. Not generating the 40% for us, they won’t and the remaining 60% to produce. Since the decline from expensive components.

But honestly, the problems we Indians don’t have to wonder. While we are caught in a perfect storm, it is necessary to use all opportunities to return the market.


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