Head of the company “Rusatom – International Network” (RIN) Alexander Merten told about ROSATOM’s business development abroad.
- You have taken on leadership of the RIN recently, thought you know the company. What priority targets the company is facing?
- The main goal of the company is to set up and manage ROSATOM’s regional centers across the world. In the nearest term, our work will be aimed at promoting products and services of the companies within the Corporation in the global market. To this end we will use a broad set of tools such as interaction with existing and potential clients and partners abroad, search for new business opportunities, sectoral marketing, promotion of ROSATOM divisions’ products and services in local markets, foreign PR, GR etc.
Besides, the ROSATOM’s management rightly believes that overseas operations of the divisions should be well coordinated. Sometimes it happened that several our companies were bidding in the same tender in a country and were competing with each other, putting down the price and losing sight of other rivals who won in the long run. Our task is to send a signal what the client wants from this or other tender and who of our companies has the best chances. This would rule out the internal rivaling. Or, as an option, we suggest the divisions setting up a consortium of our companies with the single leader to reflect all strong points in one bid. We act as a soft coordinator here; we are not prescribing but we are ready to act as assistants to the divisions, on the one hand, and to the Corporation, on the other hand.
ROSATOM’s companies make many various products, render services, and not only in nuclear power, but not all of them are represented abroad. We have to develop relations with foreign partners, tell them about capabilities and competences of ROSATOM and it companies. We have found out potentials of all divisions for the recent five months. We write a catalogue of products and services of the companies, which will be used by our specialists abroad. It will be thick; many of our partners will be surprised by how many things we can and, the main thing, we know how to do.
At meetings with heads of the divisions we made sure once again that we were moving in the right direction and that the divisions are interested in our joint work, i.e. in the assistance to promote their works and services in the foreign markets, in establishing additional links with existing and potential clients, especially, in new markets.
An equally important goal of the RIN is to reduce the overall sectoral foreign economic activity expenditures. The company’s regional offices operate in the interests of all divisions; each company doesn’t need to launch its own office abroad. Moreover, the RIN’s offices are established following the logic of “one office being responsible for the whole region”. For instance, the office in the RSA takes care of the Southern and Central Africa.
On the whole, one regional center substantially reduces business trip expenses today, consultancy expenses, and significantly reduces expenses for regional and local PR events through engaging local contractors by our regional centers.
- How many centers like that should be across the world?
- More than 10. Centers in Eastern Europe with the headquarters in Kiev, Central Europe (Prague), Central and Southern Africa (Johannesburg) have been in operation already. A team is being built up in South East Asia, in Singapore. Before the end of this year we will launch a regional center in Western Europe with the office in Paris as well as in the Middle East (Istanbul) and Middle Asia (Astana). Next year we are going to complete the network, i.e. we will open centers in North America, South America as well as in China and India with the corresponding regional coverage.
- How many employees do work in the RIN and how do you select them?
- The staff schedule has not been completed yet. Thirty five people will work in the head office in Moscow; they are mainly the nuclear sector specialists who have experience in foreign economic activities. Seven to nine people will work in regional centers. Each center operates with 5-10 countries and our specialists have to cope with this volume of activities. Heads of regional centers – regional vice presidents of the RIN – are mandatory Russian citizens. As a rule, they are the people from our industry or those who have worked in the energy business for a long time in a certain region, who understand ROSATOM’s principles, objectives and capabilities. Employees of the regional centers are either Russian nuclear sector specialists who are already in the regional center host country or specialists from the covered countries who have corresponding competences. Naturally, if the people speak the same language with our partners, both potential and existing, if they have certain ties, this gives more opportunities for business of our companies.
- What are features of the RIN operations?
- We have a twofold function. On the one hand, the RIN provides our divisions with services and tools needed for making business abroad. With this, we are not mediators. We are assistants for all enterprises within ROSATOM. We are not contract holders; we do all the work in the interests of the divisions, in regard of their products and services. The enterprises conclude contracts.
We do everything to make as many potential clients as possible of ROSATOM’s capabilities on the whole and then we leave the scene and the divisions discuss contractual terms on their own. We also help interact the companies in the framework of existing contracts to prevent claims of the clients, forfeits or to avoid untimely execution of works by our companies.
We interact with all divisions, which make international business, on equal terms and preventing the conflict of interests or leaks of confidential information. Upon ROSATOM’s directives the RIN coordinates the international business of the divisions to achieve maximum results in the sector as a whole and prevent a conflict of interests among the divisions.
- How can the RIN’s activity efficiency be assessed, if its main function is assistance?
- Late August this year the operations committee of ROSATOM determined that the RIN would function as a non-profit organization. We don’t have tasks to get our own profits, but we have a task to raise proceeds from operations of ROSATOM’s companies in the international markets. In other words, we are directly interested in the fact that each enterprise gets as many foreign contracts as possible. One more indicator is the reduction of overall sectoral expenditures for foreign activities.
Now, Rusatom – International Network’s activities transform into the Private Foundation “Rusatom – International Network”. This business organization is most suitable for our goals and objectives.
- Is it possible to define the RIN’s activities in figures?
- There are specific key performance indicators of the RIN after the regional centers network is in place: within the coming three years, together with the divisions, to ensure a 30% growth of the international proceeds and to reduce overall sectoral expenditures for the foreign economic activity by 30%.
- Now all ROSATOM’s unit introduce the ROSATOM Production System. Is it possible in your company?
- It can be said that the mere creation and development of our company is a RPS constituent. We are part of the program for improvement of the international sales system. This project is overseen by Kirill Komarov, the Deputy CEO and Director of Development and International Business of ROSATOM. Together with colleagues from over divisions and corresponding departments of ROSATOM, we actively work on this project. We are communicating with all services and units of the Corporation, while working most closely with the international business department on all issues related to the RIN activities.
- Is the Kiev office most effective?
- This is our first regional office abroad. It started operating three years ago as the East European branch of Atomenergoprom and then it was reformed into a regional office of Rusatom Overseas and then into a RIN’s affiliate. Now, it is the leader among our regional centers. The Kiev team of the RIN demonstrates a good result. This regional center, Rusatom – Eastern Europe, covers six countries: Ukraine, Belarus, Lithuania, Latvia, Estonia, and Moldova.
- And who else does work actively?
- They have started actively working in the RSA. As you know, at the 58th IAEA General Conference ROSATOM signed with that country an agreement on the strategic partnership in nuclear power development.
Regretfully, the tender for construction completion of two reactors at Temelin NPP in the Czech Republic was cancelled. Our office in Prague took most active part in the tender and preparation of the documents. But its coverage is Central Europe. We have serious perspectives in Hungary and other countries of the region.
On the whole, we hope that all centers will operate efficiently. When the network is deployed, they will take the rightful place in the system of regional presence. We have large-scale tasks and the divisions turn to us asking to promote their services and products in the markets that have not been covered yet. First of all, these are the Middle East, South East Asia, Latin America; therefore, we try to open regional centers there as soon as possible and provide our companies with necessary tools for promotion of their products and services to the full extent.
- Wouldn’t it be problematic to open regional centers in the USA because of the complicated geopolitical situation?
- Events of the recent months have shown that it is very difficult to project anything in this area. ROSATOM’s companies have not been imposed with the sanctions and we hope much that this wouldn’t happen, given the features of the nuclear industry and impeccable image of the Corporation as a reliable partner. In our international activity the main thing is safety, reliability of technologies and economic reason. We believe that our partners will proceed from these principles. ROSATOM has become a real global company; we cooperate with the French, Hungarians, Germans, Ukrainians etc.
We have the groundwork in the segments where our rivals do not have competences, since ROSATOM unites the enterprises that operate in all spheres of the nuclear industry: uranium mining, enrichment, construction, design, fuel supplies, generation and transmission of electricity, NPP control, SNF and radwaste management, servicing, manufacture of equipment for NPPs, decommissioning etc. Apparently, ROSATOM can make the most complete offer neither of companies across the world can make. Besides, ROSATOM’s companies make products for other industries: machine engineering, metallurgy, thermal power generation, oil & gas and chemical industry, medicine; it is hard to list all of them. And we are ready to come to the clients across the world with all these. There are many countries where they are waiting for us.
We don’t foresee obstacles in opening offices abroad. In the long run, representation offices of all our foreign competitors and partners operate in Russia and nobody puts spokes in wheels. We don’t go in politics; we do business, which is mutually beneficial. I think we fulfill the target to deploy the global network ahead of schedule and by mid-2015 we will have a system of regional centers.
- Won’t the situation in Ukraine hinder expansion of ROSATOM’s activity in that country?
- УFor us Ukraine has always been a historically important partner; there is the second largest fleet of nuclear reactors built to the Russian technologies there. Now, there are 15 reactors operate at four nuclear power plants in Ukraine, with nuclear power having a share of 50% in the country’s energy mix.
Regretfully, political processes strongly affect the decision-making by the competent authorities of Ukraine. At the same time, contracts of our companies remain in force. ROSATOM has not breached the terms a single time; there have boon not a single breach of fuel supplies. We buy Ukraine’s uranium, enrich it and supply to Ukraine’s nuclear power plants as fuel assemblies. We have transferred to our Ukrainian partners the technology of making part of fuel assemblies, i.e. top and bottom nozzles and now use components made by them. [The Fuel Company of ROSATOM] TVEL fulfills all commitments under the contract on building the nuclear fuel fabrication plant as regards payments for shares and drafting the technology transfer contract. The company even manufactured all equipment for the plant. But, regretfully, the Ukrainian party did not provide funding for this project and derailed several issues of shares (while being the shareholder of the controlling block of stock), and the situation of recent months has not improved the state of things. Nuclear power and industry complexes of our countries have always worked closely. We have built our relations based on the principles of respect and mutual benefit. We hope much for continuation of this cooperation that the common sense and economic interests of our colleagues would prevail over political preferences.
Coming back to the main topic of our conversation, i.e. activities of the RIN, I would like to point out one more thing. The team of Rusatom – International Network is sincerely proud of being a small part of the huge Corporation. We value what has been done already by the divisions and units of ROSATOM in the international markets before the RIN came into view. We hope that we will be able to achieve more together as relates to the international sales. We will help the divisions to realize their competences in the foreign markets, because it is not only important and responsible, it is honor. Because the products of companies, which are parts of ROSATOM, meet most stringent requirements of safety and reliability. They are made using cutting-edge technologies. They are made by wonderful people: scientists, workers, engineers, managers and specialists, the employees of the Russian nuclear industry. Seizing this opportunity I would like to greet them with their professionals’ day that recently occurred on behalf of the RIN team!