PLASTINDIA was invited to participate in INTERPLASTICA 2002 exposition held at Moscow on September 16, 2002. The exhibition was spread over 6500 sq. mt. with 300 exhibitors from 25 different countries. The foreign participation occupied more than 4500 sq. mt. compared to about 1800 sq. mt. occupied by the Russian participants. Mamata Machinery, Lohia, Cincinnati Ferromatics were the other participants at the exhibition. PLASTEMART is very happy to bring the impression of Mr. Arvind Mehta about the exhibition and the business environment of Russia.

RUSSIA TODAY IS A NEW RUSSIA

Present Russian Government is action-oriented. In last 8 years, the country has seen the set up of 500 fully occupied departmental stores, stacked with international quality products. Demand is booming in all sectors and the masses are fashion conscious, so there exists a huge untapped market. Natural resources like Crude Oil, Gas and Minerals contribute in a big way to the Government Treasury. Russia plans to join WTO by 2003 to attract investment in Russia. Investment laws like Income Tax Laws, Patent Laws, Profit repatriation/Company Laws, Labour Laws etc. are being changed to welcome foreign investments and to suit WTO.

Though the political relation of Russia with India is very good, the economical relation is not too healthy as India lags in superior quality products and services. Lack of the Indians to ADAPT TO CHANGE has caused them to lose out in Russia. From being at the topmost position in Russia, Indians have hit the bottom position today. Russians want quality of international standards and Western countries are encashing that demand. GDP growth of Russia is 3.9% while Inflation is 14%.

Italy, Germany and Austria now dominate and as a result of getting into Russian market, the European economy has become more stable. China, Korea, and Taiwan are also visible. India has failed to impact the Russian economy inspite of its strong political relation with Russia. India is out because it has not adapted to the 180º change in Russian economy i.e. from centralized purchases to free-market-economy. Now everything is in private sector. Government is releasing its controls on business activities and now market economy decides purchase.

Education

Education is free in state-schools upto XI th standard. Private schools charge fees. No reservation on basis of caste or creed. Literacy level of Russia is 80%. Now, English-learning by small children is given importance.

Environment

There is no littering habit amongst people. Roads are clean but only 95% clean by European standards. Government does the waste management without any fuss and without blaming plastics.

Currency of Russia is Roubles and approximately 1 US$ = 31.5 Roubles. Lending rates are high i.e. @ 17% Roubles while Fixed Deposit rate @ 11%( Fixed Deposit for US$ 6%). Banks are now updating and changing to new order. As on today, getting LC is very difficult. Today, business can be done by appointing good local middlemen, who are available.

Import Duties Vary from 5% to 25%. VAT is 20% - 10% on essential like food and 20% on non-essential. All items are covered by VAT. No one is exempted. + 5% Sales Tax is Non VATABLE. Income Tax rates are 13% for personal and 24% for companies.

Infrastructure

Russia is totally well connected by very good roads – 4 Lanes and 3 Lanes highways. Earlier Communist Government did this with an eye on defense, nuclear war and total control. Russia has one of the best underground Metro Rails in the world. There are seven layers of underground running trainsThe population of the City of Moscow is 9 million while cars in Moscow in is 4.5 million. Sales of Mercedes Benz is the highest in Moscow than rest of world. Petrol price is 11 Roubles(Rs. 20) per litre. Power supply is uninterrupted and about 0.23 Roubles(45 Paise) per unit while In India we pay on an average Rs.4.50 per unit. Phones, E-mails, Cell Phones, Internet are all freely available.

Today whatever polymer is produced locally is consumed. Very little is imported. As they are rich in oil, gas, minerals etc. plants are immediately set up. Now all plants are in private sector. Labour in generally skilled in Russia and the minimum wage specified is US $ 100. But on an average labours get US$200 - US$300 per month for 8 hours duty from Monday to Friday working days. There are no more strikes now.

There are around 500 processors of plastic products but machinery is very less. Thus there is tremendous scope for Indian plastics machinery makers provided they fulfil Russian requirements. Russia imports 400 – 500 Injection Moulding machines per year mainly from Germany.

How to do business - Today

There are daily AEROFLOAT flights between Delhi and Moscow costing US$ 500 – 600 (both ways inclusive). Hotel rate is around US$ 100 per day. Taxi charges US$ 5 per hour. Indian food is available but costly. No direct business with party is practical. So one has to do business via Russian agents only, who speak local language and know local market. One can have assistance and payment from agents who are genuine and interested (This route is suggested in discussion with Indian Embassy officials also).

First of all, one should visit Russia, meet maximum people, participate in exhibitions or visit their exhibitions with English-knowing Russian interpreter. Russian visas are strictly by invitation only. Hence the visit has to be planned well in advance.

Inference

Russia is a big booming market, rich in oil, gas and mineral resources and also defence-oriented technology. Indian plastics machinery makers of international quality stand with benefit the most if this huge market for plastic products including plastics packaging is tapped. NRIs in Russia can be our marketing people as they have strong national feeling that India should progress and they know local market well. In this regard, Indian Business Alliance, Moscow which is having 83 members, can be of help.

Participation in exhibitions will definitely help if one’s own platform is ready. India’s strong political ties with Russia could be of great help. Russians have high regard for Indians. Above all, Indians have skill, talent, technical backing and confidence. Where we lack is the knowledge of ‘What the Overseas Customer Wants’. We should change accordingly and encash this opportunity.

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