We help capital companies to open new export markets

Vladislav Ovchinsky, Head of the Moscow Investment and Industrial Policy Department, said in an interview with RIA Novosti about how the Moscow authorities are helping the capital's producers increase exports in the new conditions.

— Due to Western sanctions, many export channels for Russian companies closed down. How is the geography of exports changing due to recent developments?

— Many industrialists say that geography is changing. However, if you look at the results of 2021, then most of Moscow’s non-resource non-energy exports still fell on friendly countries. Kazakhstan, our main partner, purchased products worth USD 3.4 bn, which is about 10% of the total NOE of the capital.

In general, we delivered goods worth USD 8.51 bn in the CIS countries last year, which is 30.1% more than in 2020. We export mechanical equipment and machinery, electrical devices, communication equipment, optics, cosmetics and much more to Belarus, Kazakhstan, Armenia and Azerbaijan.

That is, the export activity of Moscow manufacturers continues. Of course, companies faced difficulties in supplying goods to a number of countries, in particular, the European Union. Now we faced the challenge of reorienting the city's industrialists to other markets, this opens up new opportunities.

— How does the capital help enterprises to look for the new partners?

— We provide comprehensive support to companies that are exporting or just planning to enter the international market. Starting from individual analytics and recommendations in which countries specific products may be most in demand, and ending with the organization of negotiations with potential buyers and methodological support of the transaction. The Center Mosprom is doing this.

Our enterprises focus on a wide geography of exports, taking into account the demand for the capital's products, and are developing new markets, including Asia, the Middle East, Latin America, and Africa countries.

Every year we hold several teleconferences with our partners from different regions. In 2021, it was the countries of Latin America and Africa. By the way, these are promising areas for Moscow manufacturers. I would like to note that trade with these regions has been showing steady growth for several years: with Africa – 4%, with Latin America – 62%. In absolute terms, it is USD 4.2 bn and USD 4.3 bn, respectively.

This year we held a teleconference with representatives of the Gulf countries that are members of the Gulf Cooperation Council (Cooperation Council for the Arab States of the Gulf). There are many topics for cooperation in various sectors of the manufacturing industry, in particular, in the food, light industry, and equipment manufacturing. Moreover, we note not only the interest of Moscow companies to enter the new markets of the Persian Gulf, but also the interest of our foreign partners. We are planning a business mission this year.

— Is it possible to call the Persian Gulf region a new direction for Moscow producers? And why are you targeting this market?

— In general, the economy of the Middle East is one of the fastest growing economy in the world, despite the fact that its stability largely depends on the oil and gas industry. In recent years, the countries of this region have been actively developing their own industry and infrastructure. In this regard, the Arab market is interested in the supply of new equipment and technologies, further digitalization and expansion of non-primary sectors of the economy. There are many product niches in these countries, which are quite within the power of manufacturers from Moscow to fill. These are goods of the construction industry, and food products. In particular, lemonades, kvass and other soft drinks are of interest.

Earlier this year, we organized a number of business missions for industrial and agro-industrial enterprises with countries in the Middle East, where negotiations were held, for example, on the supply of pasta products to the UAE. Our confectionery factory presented its products to Egyptian companies that are extremely interested in importing frozen Russian sweets to increase shelf life.

According to the forecasts of our analysts, in the context of steadily developing mutual supplies with the countries of the Middle East, by 2025 the capital will be able to increase trade with these countries by at least 20%.

— What financial support does the city offer to export-oriented enterprises? Are these measures in demand?

— Companies planning to enter the international market can take advantage of a loan with an interest rate below the bank rate. The Moscow Industry and Entrepreneurship Support Fund is responsible for this type of support. The loan amount can reach RUB 300 m.

City enterprises actively use this type of financial support as well as the others, which, within the framework of anti-crisis support, the city today provides to all manufacturing enterprises without exception. Capital companies have access to preferential loans to replenish their working capital. Including compensation, industrialists can receive funds at a rate of 9% and use them to pay salaries and purchase materials. In March, for these purposes, the Fund was capitalized by RUB 10 bn.

In addition, another anti-crisis benefit has been approved for investors who plan to build production facilities. They will be able to rent land for the construction of new enterprises and the reconstruction of existing facilities for one ruble per year. This will allow businesses to establish the production of products that are important for the life and economy of the city quickly.

Also, we have automatically extended special statuses that allow businesses to save big. For example, this is the status of an industrial complex or industrial park. In total, 135 companies receive benefits, which in 2022, by decision of Moscow Mayor Sergei Sobyanin, received the opportunity not to confirm compliance with the established criteria in order to maintain a special status.

We have also introduced a moratorium on the indexation of rental rates for enterprises located in the Technopolis Moscow Special Economic Zone. It will last until the end of this year.

For enterprises that have problems with the supply of equipment and raw materials, we have developed a service for selecting alternative suppliers. In total, over 130 Moscow companies have turned to this service for advice. Applications were received from manufacturers of machinery and equipment, pharmaceuticals, computers and electronics, paper, food companies, and cable companies. The service allows you to search for suppliers of equipment, components and materials not only in Russia, but also in Asia and the EAEU. The new support measure makes it possible to restore broken supply chains, as well as to establish regional cooperation.

Source: Ria.ru