Getting Closer New Opportunities

Germany was and is Russia's most important trade and economic partner. The implementation of transnational projects sometimes gets political, while the trade and economic relations at the regional level are hardly affected by political differences.
According to the Russian-German Chamber of Commerce, the number of German companies in Russia continues to decline. However, analysts say that the reduction in the number of the German business representatives in Russia is a very formal indicator. Minor players leave, and the remaining ones, many of which are world famous manufacturers, are clearly intensifying their activity. These are Mercedes-Benz, BMW, Audi, Volkswagen in the automotive industry; BASF and Bayer in the chemical industry and pharmaceuticals; Rowenta, Kärcher, KRESS, Leica, Miele, Bosch, Braun in the field of household appliances, and many others.

The economy modernization and the active involvement of all economic fields in digital technologies make Russia a very promising partner for Germany in terms of importing machinery and technologies, and the government's initiatives to improve the investment climate are increasingly attracting German investors.

Here is an example. At the end of 2019, the volume of non-energy exports from Moscow to Germany amounted to USD 1.2 bn and grew by 14.98% against 2018. Today, Germany ranks #7 among all trading partners of Moscow in the field of non-energy exports.

According to a survey conducted by the Russian-German Chamber of Commerce, 39% of German companies plan to invest in Russia in the near future, 29% plan to expand their activities, 63% will work as planned without revising their strategy, and only 8% talk about the plans to reduce their business activity.

Experts see the prospects for cooperation in such areas as food industry, modern materials, renewable energy and information technology. Based on this, the creation of competitive products with the subsequent export increase becomes the main priority of Russia's industrial policy. The joint developments of scientists and engineers of the two countries, the development of international cooperation and the attraction of German investments with a high export potential is an important component in the implementation of the national project "International Cooperation and Export".
MOSCOW INDUSTRY: RESULTS 2019
MOSCOW INDUSTRIAL EXPORTS IN THE PAST YEAR AMOUNTED TO
HAVING GROWN BY 31.88% AGAINST 2018
bn
100+ MOSCOW MANUFACTURERS
took part in
8 INTERNATIONAL EXHIBITIONS
5 MOSCOW COMPANIES participated in a business mission to Vietnam
77 AGREEMENTS
for RUR 20+ BN concluded

3 MOSCOW COMPANIES participated in a business mission to Rwanda


1500+ BUSINESS MEETINGS for industrial companies
2 TECHNOLOGY TOURS with representatives of Cuba
10 EXPORT CONTRACTS for total
RUR 3+ BN signed

usd
LOWER SAXONY IS A PROMISING BUSINESS PARTNER

Germany's federal state of Lower Saxony is interested in expanding social and economic cooperation with Moscow.


Lower Saxony is one of the most promising business partners. The region is a leader in terms of GDP growth among all German states. More than 300 enterprises in the region are somehow present in the capital market. The largest companies in Lower Saxony, such as the car maker Volkswagen, the tires and automotive components manufacturer Continental, and the trading network New Yorker are actively cooperating with the Moscow business. The Lower Saxony Ministry of Economics, Labor, Transport and Digitalization is constantly expressing its interest in strengthening business ties with the capital region and is ready to provide information support to the Russian businesses taking their first steps in Germany.
Decision to enter the German market or to open a representative company in Germany needs to be well prepared
First of all, German experts advise to evaluate the company's own capacities and study the specifics of doing business in Germany. Having made a positive decision, it is necessary to choose a market development strategy. First, you should determine whether you will only export goods or establish a production abroad. It is worth considering not only the option of independent actions, but also the possibility of interacting with a sales representative or a local partner.

The main difficulties of foreign economic activities in Germany include: differences in legislative and regulatory frameworks, German requirements for statistics and reporting, and cross-cultural differences.

Typical errors at the stage of establishing contacts are incomplete or incorrect initial information, lack of consistency in making strategic decisions and an insufficient focus on presenting your offers. In addition, the information may become useless due to poor translation.

Moreover, the establishment and development of business relations can be impeded by insufficient human resources, too slow decision-making process, the wrong choice of distribution channels, the insufficient communication with a partner, as well as market planning without the partner's participation.
300+ enterprises in Lower Saxony
are somehow present in the capital market
The partners' reliability and willingness to mutual understanding, the offer attractiveness and the availability of necessary resources will shape the successful cooperation of Russian and German enterprises.

To correctly assess the market and its capabilities, you need the information that can be found in many sources. These are the Internet resources of the German chambers of commerce, in particular that of Lower Saxony, the websites of the relevant ministries and departments (for example, the Federal Ministry of Economics and Energy of Germany), the special websites dedicated to export transactions financing and insurance.

Here is an example: the Lower Saxony (Niedersachsen) Business Map provides the information about the companies in the regions, vacant spaces for industrial production, commercial real estate and the federal state research landscape. And at the German Management Academy in Lower Saxony, entrepreneurs can not only complete an internship, but also receive the Office-in-Office service (choose a project manager who will represent the company's interests in Germany).

The Moscow Government and the Lower Saxony authorities support the development of partnerships at the company level.
IMPORTANT EVENTS

The Caribbean

In 2019, the Moscow manufacturer of innovative construction composite materials United Composite Technologies JSC became the first Moscow company to sign an agreement to create a joint venture with Cuba in the Mariel special development zone. 22 production lines will be installed to produce 10,000 t of glass plastic reinforcement and mesh per year. The plant will become the largest in the Caribbean.

Export projects implemented in 2019 by Moscow companies with ANO Mosprom support

The Kolomensky integrated plant has signed an export contract with the Dubai-based company Loom Food Trading LLC, which will allow it to enter the markets of 10 Arab countries. The contract price is RUR 120 m.

The Svoboda factory joined the largest Vietnam network of children's goods BiboMart. Its products are available in 80 stores in Vietnam.

The 3D printer manufacturer PICASO 3D has signed an agreement of intent with five Chinese distributors for the supply of products and industrial use of Moscow 3D printers.
POSITIVE DYNAMICS

Moscow industrial exports in the past year amounted to USD 27.8 bn having grown by 31.88% against 2018 The share of Moscow in Russia's total exports amounted to more than 43%, including 20% of non-energy exports.

Note that in 2018 Moscow accounted for only 16% of Russia's non-energy exports. In total, last year, the Moscow companies exported industrial products to 184 countries. #1 among the key importing countries is Great Britain (USD 5.6 bn), #2 is Belarus (USD 2.5 bn). The top importers of Moscow companies also include: Kazakhstan (2.3 bn USD), China (USD 1.87 bn), and the United States (USD 1.82 bn). By the way, in spite of the "sanction wars", the volume of exports from Moscow to the United States increased by 18.17% against 2018.
AGREEMENT ON SUPLIES TO EUROPE

The Moscow plant FIZPRIBOR has signed an agreement to supply security systems to European markets. Deliveries worth RUR 7 m are planned for the first half of 2020.

The system is designed to protect not only major industrial facilities, but also civilian ones, such as transport and the "smart city". The complex works independently, it is based on an unconditional logic, which does not allow to deceive and change the algorithm of the entire security system.

First Deputy CEO of MZ FIZPRIBOR LLC Sergey Safonov notes that foreign companies are interested in cooperating with Moscow manufacturers. For example, the company managed to negotiate joint technological work with the German locomotive control systems manufacturer, and soon these technologies can be localized in Russia.
2019 MOSCOW INDISTRIA EXPORT
Corporate Issue, Moscow Department
of Investment and Industrial Policy
E-mail: pressprom@mos.ru
Audience: 16+