“The two countries complement each other perfectly”
On Monday 8 April Amsterdam’s Beurs van Berlage was the appropriate and stylish setting for the Netherlands-Russia Business Meet. The meeting in the former commodities and stock exchange building represented the business kick-off of Netherlands-Russia year 2013. The combination of ministers, business people and managers from the two trading countries ensured that the Business Meet was a pressure cooker for cooperation opportunities.
Ewout Michels, partner of KPMG, opened the Netherlands-Russia Business Meet with an encouraging message. He announced the results of a study by his consulting organisation showing that investors are positive about the investment climate in Russia. Michels: “Over 60 per cent consider that it is improving.” This provides great encouragement for even more intensive cooperation with the Russians, an area in which the comparatively small country of the Netherlands has always been a leading player. The country has a long trading history with Russia stretching back four centuries. In the past few decades this bilateral economic relationship has picked up pace.
“The Netherlands is now the second-largest investor in Russia,” noted the Dutch minister of Economic Affairs Henk Kamp in his plenary speech. According to Kamp there is room for further growth in the relationship. One important area of (growing) cooperation is energy. Companies from both countries are working closely together on projects such as energy extraction at Sakhalin and the Nord Stream pipeline. And there is more. The number of cooperation projects is growing all the time. Kamp used the meeting to announce the start of construction work on Tank Terminal Europoort West, in the port of Rotterdam. This is a project by the Dutch-Russian joint venture Shtandart TT, an alliance of Summa Group (75%) and VTTI (25%). The project is crucially important to both the Netherlands and Russia. To give an impression of the capacity of these tanks (for oil and oil products from the Urals), Kamp compared them later on in the day to “twice the annual Dutch beer production of Heineken”.
The minister also sees further growth opportunities for Dutch companies in Russia, both in energy and infrastructure but also in the modernisation of other sectors. Kamp mentioned the healthcare sector and food production, an area where the Netherlands – with its greenhouses and high-tech food processing industry – has a great deal to offer. “The countries complement each other perfectly in terms of knowledge and expertise.”
Groundbreaking order
One Dutch company that has been sharing its knowledge with the Russians for a long time now is Philips. It is fair to view the electronics giant as a pioneer in doing business in Russia. Following the speech by minister Kamp, Philips CEO Frans van Houten told how founder Anton Philips travelled to Russia in 1898 and managed to sell no fewer than 50,000 light bulbs to light the Winter Palace, now the Hermitage in St. Petersburg. For Philips this was a groundbreaking order which marked the start of its successful international expansion. Russia developed into a major market for Philips which is still growing in importance.
Van Houten sees a bright future for Dutch-Russian cooperation and also believes that this is of mutual social and economic importance. Improving energy efficiency is an example of this. “Russia could save 4.5 billion euros worth of energy,” according to the CEO. It goes without saying that Dutch companies such as Philips are only too keen to lend a hand in this area. Not that long ago the company once again provided lighting for the Hermitage, this time round with modern LED bulbs, allowing the museum to sharply reduce its energy costs. Van Houten also sees great added value from cooperation on modernising the healthcare sector. He expects to see a further increase in business opportunities for Dutch companies as a result of the Russian innovation programmes and the establishment of special economic zones in Russia.
The next speaker, Ivan Bortnik, took a closer look at the incentive policy in certain Russian regions. “The high levies remain the biggest barrier for foreign companies,” said the executive director of the Association of Innovative Regions of Russia. However, the investment climate is slowly but surely improving. He explained how regions are working towards a better investment climate one step at a time. This will make Russia more accessible and lead to a more modern economy. An irreversible development, partly in view of the fact that in certain sectors Russian companies are increasingly able to measure up to the best. Bortnik pointed to the rapid increase in the number of high-tech companies enjoying global recognition.
Closer look
After Bortnik’s speech the visitors to the Netherlands-Russia Business Meet dispersed into the exchange’s various halls to attend parallel sessions. These took a closer look at opportunities in the various sectors, with sessions for technology, media & telecom, natural resources, healthcare, infra & logistics and agri & food. Visitors with no specific sector preference could attend a parallel session with an interactive discussion on business opportunities. The session for technology, media & telecom confirmed the image of Russia as an emerging economy with a huge potential in new technologies. It has the ‘player material’ to set itself apart, for example boasting many of the top brains in mathematics and IT. The trick is to find the right way of translating that into business. Which is where the Netherlands comes back in, with its knowledge of converting knowledge into opportunities.
The parallel sessions were followed by the second plenary part of the Netherlands-Russia Business Meet. The programme included speeches by another two ministers. First up was the Dutch minister for Foreign Trade and Development Cooperation, Liliane Ploumen. She noted that the Netherlands is a major investor in Russia and that the Russians are rapidly becoming major investors in the Netherlands, with mutual investment and trade still growing in 2012. It is likely that Netherlands-Russia year 2013 will further intensify this. “This afternoon will see the signing of no fewer than 20 contracts, memoranda of understanding and letters of intention,” stated Ploumen.
The minister said that one explanation for the fruitful relationship is that the countries find one another in focusing on similar sectors, and she believes that the increasingly intensive public and private cooperation can lead to many more great things. “A good example of this is the agreement on the aviation sector we signed before.” Ploumen expressed hope that Russia will become a more open economy. In this context she has high hopes for a newly installed innovation working group in the Russia-Netherlands Joint Commission on Economic Cooperation. The working group includes Russian deputy prime minister Arkady Dvorkovich.
Catalyst
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on linkedIn The mention of the Russian minister’s name was no coincidence because Dvorkovich was the next speaker at the Netherlands-Russia Business Meet. He explained he is committed to intensifying the relationship and will see to it that the targets both countries set for themselves are realised one step at a time. The minister invited those present to take part in the various forthcoming economic and cultural events in Netherlands-Russia year 2013.
William Connelly, CEO of ING Commercial Banking, had the honour of bringing the plenary programme to a close. Neither a Dutchman nor a Russian, Connelly said he was struck by the two countries’ strong sense of historical connection and willingness to cooperate. He urged the audience to use the matchmaking session following his speech to further build relationships and make new contacts. He added that he was in no doubt that the topics covered during the Netherlands-Russia Business Meet could provide a rich source of inspiration for this. Connelly thanked the speakers for their presentations. “They can certainly serve as a catalyst for new types of cooperation.” .
