20 апреля 2012

Interview of Alok Kumar, director of Pereslavsky Technopark, for magazine «The Russia corporate world»

Regional review: The Yaroslavl region — opinion of the investor

Alok Kumar, derector of Pereslavsky technopark

Alok Kumar, an Indian by nationality, is the CEO of Inpark Group – a company that owns and manages, amongst other Russian business ventures, the Pereslavsky Technopark in the Yaroslavl Region – whose over 17 years of vast business experience and unparalleled knowledge of the CIS markets have helped drive his company’ s robust business growth in this region. In this interview, he talked about his current and future business plans in Russia, which has practically become his «second native country».

Could you briefly highlight the history of your businessexperience, including how you have ended up becoming a major foreign investor in Russia?

I started my professional carrier with a multinational Chemical Trading & Manufacturing Co in the mid-1995s. In 1997, I started my own venture in different industrial sectors and got some good experience, selling Russian commodities on the South-East Asian markets. In essence, I greated a market for industrial raw material exports and their packaging as per international standards, as you must be aware that in the Soviet era, products were packed in compliance to the local market requirements. For example, a plant was exporting Gum Rosin from Russia in wooden boxes. We teamed up with an U.S.-Dutch company company to make special drums for them, and introduced the polypropylene bags and jumbo bags for fertilizers and chemicals. This helped me to expand our sales volume on the Asian market and reduced transit losses. In 2000, my subsidiary company started selling consumer electronics, as a distributor for Panasonic goods, in Russia. Later, we created our own brand in the consumer electronic sector and our products were sold at major chain stores.

How would you briefly characterize today’ s Russian economy, its business potential and attractiveness for entrepreneurship?

I would like to say that Russia has a huge business potential for serious, long-term-thinking investors. Having said this, I must, however, note that just as abundant business opportunities beckon in this country, so also do the pitfalls. When my friends tell me that «Russia is a tough place to do business», I always reply to them that «it is also a great place for making money and that whoever is not here is seriously missing out on the vast trade and investment opportunities in this country». There’ s a strong case to be made that the business opportunities will continue to grow now and in the future. For one, Russia formally joined the WTO last year, which is not only symbolic, but also provides new protections for investors in the country. Besides, the government has also promised to privatize key state assets, whilst the consumer market is expanding rapidly, thus opening up a more vibrant market for more services and goods, including automobiles, construction equipment, building products, food processing, pharmaceuticals, etc.

You’ re a founder and CEO of several companies. What exactly are your responsibilities in these companies and how this wealth of business experience helping you in Russia?

Apart from Akis Tech Ltd., I’ m also the CEO of Inpark Group, which owns and manages the Pereslavsky Technopark, and my main responsibilities include overseeing the Group’ s investment, sales and marketing operations policies. I must also note here that I’ m a member of the Board of Directors of Slavich, an open joint stock company comprising several subsidiaries that specializes in the production of photosensitive papers and materials for the electronics industry and packaging materials with multiple colors. My over 17 years of experience in the manufacturing, trading and investment activities and mastery of the CIS market have been a strong driver of the group’ s growth in this region. Being a dynamic business leader and management consultant, I have a deep operational experience in start-ups, turnarounds, etc. that are helping to drive our group’ s exponential growth. Today, I have the expertise in management consultancy and advisory services that have transformed our group into a multimillion dollar business, with an estimated annual turnover of about $350mln, in a short span of time via acceleration of sales volumes, growth and profitability.

As one of the biggest foreign investors in the Yaroslavl Region, how would briefly characterize the investment climate in the region?

First of all, I just wish to share that the Yaroslavl Region is a historical place, where Indians once traded in the 17th century, at the time of Peter the Great. Back to the president, today the region holds the best industrial growth rate and is on the 4/5th place in terms of attracted foreign direct investments per capita in Russia. It is, therefore, not surprising that last year Fitch Ratings agency upgraded the region’ s long-term ratings in foreign and local currency from «BB-» to «BB» as well as long-term national scale rating from «A+ (Rus)» to «AA (Rus)». The region has a pool of highly qualified young professionals and reputed universities for training future employees as per companies’ requirements. For example, this year, we started the preparation of new employees for GMP standard production of pharmaceutical goods. The positive approach to business issues, such as the developments of cluster and green-field systems, have given a huge boost to the region’ s economy, where such sectors as pharmaceuticals, biotechnology, tourism, auto components, chemicals, power plant engineering, etc., are flourishing today. Already in the region to take a full advantage of these business opportunities are both local and multinational companies such as Nycomed, Teva, Kodak, Du Pont, Sun Chemicals, Metro, Komatsu, etc.

Alok Kumar and Stanislav Elfimov

From your personal experience, are there special privileges for strategic investors in the Yaroslavl Region, if yes, name them, and indicate how they affect your operations?

These are several of them, but suffice to note the Regional Law, titled, «The State Support of Investment Activity in the Yaroslavl Region, and specifically, the Article 4, which provides adequate safeguards for all the investors in the region, irrespective of their businesses ownership structures (see table Yaroslavl Region’ s „ special perks“ for investors). Besides, I would also like to note the presence of well-developed business infrastructure, ready-for-use production facilities, the „ One Window Approach“ policy that reduces the time needed to launch business ventures in a very short period from the moment of their approvals, as well as lucrative tax exemptions that help investors to foster their business growth. All these special perks have been a big boon to our business operations in this region.

As a foreign investor with vast international experience, how does the current investment climate in this region today compared to other locations, where you also have businesses?

My rating of the Yaroslavl Region’ s business climate is an A+, with a special emphasis of the regional laws that regulate the procedure for the provision of tax benefits to investors, guarantee equal attitude towards all the investors, as well as the existence of the One Window Policy and professional systematical approaches such as the «Unified Project Family». Other positive factors boosting the region’ s overall investment attractiveness include good business infrastructure and convenient geographical location to name a few.

Apart from Moscow and Yaroslavl, do you have businesses in other Russian regions, if yes, which regions and what types of businesses?

Yes, our group has a multiprofile business structure with commercial interests in various sectors of the Russian economy. Consequently, we have pharmaceuticals production in Krasnoyarsk, a milk processing and agro firm in the Bryansk Region as well as a warehousing facility in the Krasnodar Region.

In conclusion, going forward, what are your future business plans in Russia, especially as the country gradually, but steadily overcomes the negative effects of the economic crisis?

We plan to make us of all the new opportunities opening up as the economic recovery strengthens from year to year. For instance, we plan to open new business ventures, including a biotechnopark and technology venture about $15mln, and another $1.2mln of investment fund their equipment and information systems. This step was prompted by the need to maintain high rates of our network expansion, and also by the active development of market demand for biotech products in the country. Today, we are putting together strategies to boosting our sales growth, and thus, consolidate our leading positions in all the industries, where our parent group or its subsidiaries currently operate in this region. This step was prompted by the need to maintain high rates of network expansion and also by the actively growing market demand for biotech and other innovative products.

The printing version of interview in the magazine «The Russia corporate world» Vol. 7, No. 4 (April 2012) on pages 35-39