7th Day – Exploring St. Petersburg

On the last day, we took a guided walking tour around St. Petersburg. It was freezing cold (for us at least; I definitely wasn’t used to the -2 degrees) but  this added to the beauty of the city. It has a completely different feel than Moscow, which is busy and vibrant, and St. Petersburg just seemed quainter in comparison. St. Petersburg’s advantage is that it is directly by the ocean. You can even reach Finland in less than an hour by boat. What a luxury! But who wants to go to Finland, when St. Petersburg is so beautiful?

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The tour started at our hotel and led us to various monuments and historical locations. A definite highlight was the Church of the Savior of Spilled Blood.  The colors, the architecture, the location- a real work of art. St. Petersburg is definitely more of a “Western European.” Around noon, we split up and were able to explore the city for ourselves.

 

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We also went to the Winter Palace (a must in St. Petersburg!). The palace was spectacular and each room held a new surprise. There was a room filled with chandeliers, another was a gorgeous library. Regrettably, we didn’t get the chance to visit more museums . The history of St. Petersburg is very extensive and there are several historical Museums as well. Just the short tour inside the Savior of Spilled Blood showed the scope of the history.

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All in all, we had an awesome trip to Russia. We were happy to see different kind of companies, Russians as well as international companies, and learn about their doing of business. However, this trip was more than just learning about doing business in Russia. It was discovering another culture, meeting new people, and taste the wonderful local cuisine. And the vodka 😉

THANK YOU RUSSIA!

6th day – Korean Cars and Russian Beer

After a great breakfast at the Hotel, it was already time to embark on our first day of company visits in St. Petersburg. The first company we went to visit in St. Petersburg was Hyundai.

The company visit to Hyundai was an absolute highlight. The factory was simply incredible; I had never seen a factory as such or a production line for that matter. The machines that Hyundai has at the factory are unimaginable if you’ve never witnessed such a thing.

It started with a short presentation about Hyundai in general and the cars that they produce in Russia. The plant in St. Petersburg is the second largest plant with 15% of the entire volume production in Russia. The plant opened in 2007 due to its convenient location and access to the sea port. The cars are localized to fit the Russian needs.  For example, not all roads in Russia are paved and therefore the cars need to be robust enough to withstand the heavy winters and the Russian roads.

Another interesting fact is, that the production plant itself is the largest car plant in Russia, and the best plant of all Hyundai car plants in the world when it come to technology and management. Right after the presentation, we were given a tour around the plant and I was deeply impressed by every step. I have basically seen how a car gets produced from a to z. The most interesting part of the tour was the beginning, where the steel rolls get stamped, welded, and then painted. Due to health issues, we skipped the painting process. Unfortunately, I did not listen to what our guide was telling us in each process step. Looking at the huge stamping machines and seeing robots at work, took all my attention. Sebestian was walking always behind me and pushed me along the way. Otherwise, I would not have moved and would have kept observing the robots doing their work.

I believe the entire group enjoyed the trip to Hyundai. Next stop: the beer brewery Baltika.

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After Hyundai, we went to Baltika. Baltika is Russia’s largest beer brewery. This was our last company visit for the entire trip. The tour was less about Baltika’s business and strategy but more about the beer brewing process. We walked through the entire brewery and at the end had the chance to try all the beers that Baltika produces. We also learned a bit about the beer brewing history of the Company. Their product range was quite broad, ranging from a Californian craft beer to a Hefeweizen. The company seems quite innovative and ambitious with its product range, being present in various segments and markets.  It was a great ending to the “business” week and company visits.

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4th Day – Visit to Geropharm and IKEA

Day 4 started early- 6:30 am call time. There were two company visits scheduled: Geropharm and IKEA. Geropharm is located outside about 200 km outside of Moscow. After a 2-hour drive through Russian forests, we finally arrived at their impressive factory.

Geropharm is a Russian pharmaceutical company, producing innovative products, such as insulin pens. Geropharm was a one-of-a-kind experience for all of us, I believe. Before entering the factory, we were told about some of their sustainability efforts. For example, the employees planted new trees on their property. It is not everyday that one gets to go inside and tour a pharmaceutical company. We were split into two groups and were first shown around the research laboratories. Dressed in full on scrubs, we each had to wear shoe covers, a hair net and a robe. It is important that the labs stay sterile and free of bacteria.

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One could really tell that the Geropharm representative wanted to make the tour interesting for us. They were proud of their innovation and it was nice to see that they were very passionate about their work.

After the tour of the laboratories, there was a second part at Geropharm. We visited the manufacturing part of the factory, where the product is packaged. This part was extremely interesting because here we could see how much work goes into the actual process. Each insulin tube was first inspected, then sterilized, then photographed, labeled, checked again and then packaged. The amount of work that goes into one tube of insulin is incredible. I think this was an eye-opening experience.

After Geropharm, we rushed to get to our next appointment at IKEA. Unfortunately, the traffic in Moscow proved to be more extreme than we all thought. We were stuck in traffic for almost 4 hours. Naturally, we were late to our next company presentation but the representatives at IKEA were very patient and welcomed us nonetheless.

The IKEA representative, Magda Ropotan, was very welcoming and heart-warming. During this presentation, we got more insight as to what Russian customers value and how Russian companies work. She said that Russians are short-term planners which hope for luck, are open and generous, straightforward and hot-tempered. Children are central in society and thus an extremely important target group for IKEA. Russian families spend their money on their children. Russia’s society is at a “war for talent” with only 5.5% unemployment in the country. With rapid urbanization and infrastructure shortage, IKEA has its work cut out. They are developing solutions for this social phenomenon in the products they design and manufacture.

One of IKEA’s core businesses in Russia is in retail management. IKEA operates shopping centers in Russia (called MEGA) that are becoming more and more popular due to its convenience. Shopping centers are a one-stop destination for families with everything under one roof. IKEA’s aim is “to create a better everyday life for the many people.” Hence, the functionality of the shopping centers definitely fulfills this. These MEGA centers constitute a fifth of their business in Russia. IKEA tries to localize as much as possible with 59% of products coming from local suppliers. There are currently 14 MEGA shopping centers in Russia.

After the presentation we were let go and Carla and I made our way to a nearby shopping center. Russians are famous for their beautiful braids and we wanted to experience this. In one of the shabby stables in the shopping center, we found a woman who braided our hair. Within 15 minutes our hair turned from boring into a beautiful hairstyle!

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At this point, we would like to say THANK YOU to Geropharm and IKEA for their patience and especially sharing their business knowledge with us. It was a pleasure to visit these companies!

3rd day – Swiss Embassy, Rusal and a Reception

This was the real beginning of our study trip. At 8:45, we left the hotel to go to the Swiss Embassy. This was the first time we took the metro with 35 people. Let’s just say in a city with 14 million people, it was anything but calm. Although the Russian natives squeezed past us on the escalators and then again at the end of the seemingly never-ending way down to the metro,  we managed not to lose each other.

The Swiss Embassy is located in a nice neighborhood with a playground just across from the building and the Swiss flag hanging above their door. Five to six employees of the Swiss Embassy welcomed us, each of them specializing in a slightly different area. In hindsight, this was the perfect beginning to the other company visits because it gave us a nice overview of Russia and Russia’s relations to Switzerland.

The Swiss Embassy issues about 50,000-60,000 visas a year. Also, it was mentioned several times that 2014 was a significant year for Swiss-Russian relations since it marked 200 years of diplomatic relations. This year, Switzerland holds the presidency for the OSCE (Organization for Security and Co-operation in Europe). Switzerland is a non-NATO and non-EU country, which gives it credit in Russia. Furthermore, Switzerland sees itself as a force for peace and peaceful co-existence. Before the recent Ukrainian crisis, Switzerland’s priorities were in security, stability, freedom and human rights of the OSCE. During the presidency, Switzerland has had to deal with the Ukrainian crisis as well. A monitoring mission was implemented where the monitors would neutrally report information on what they would see, hear, etc. Essentially, the Swiss diplomats told us that the Ukrainian crisis was a crisis of European security.

After the presentations, we enjoyed a nice reception with some lovely Russian style finger food and some Swiss wine. We chatted with the diplomats and were able to ask more questions about Russia.

It was very beneficial to have the visit to the Swiss Embassy before we went to visit all the other companies. This way we could get a better sense as to why companies might behave the way they do. It also showed us what the relationship between Switzerland and Russia is like.

Rusal

Our next stop was Rusal, Russia’s largest producer of aluminum. Vera Kurochkina, the Deputy CEO of Rusal, came in like a whirlwind and gave a quick overview/presentation of Rusal. Rusal is responsible for 8% of the global production of aluminum with assets in 13 countries. Aluminum companies keep their technology very secret since it is the core of the business. It seemed that their competitive advantage encompassed their ability to produce and deliver products just-in-time. Rusal’s supply chain consists of fast and reliable shipping Services.

Ms. Kurochkina mentioned something called the “Russian discount”, which means that people think that if it comes from Russia, then there must be something wrong with it. This was a thought-provoking comment to make whilst presenting the company. For a Swiss citizen, I believe this is hard to grasp, since most products that are from Switzerland have the opposite effect- if it comes from Switzerland, it must be good. It seems that aluminum’s future is unclear. The automotive industry, for example, is exchanging aluminum for steel. Furthermore, the value of aluminum has declined.  However, forecasts state that in the construction industry.

IMG_9748Later that day, we were invited for a welcome Apéro at Yves Morath’s flat. We were introduced to his family and enjoyed talking to the fellow diplomats in a more relaxed Setting. From the apartment, there was a spectacular view onto the Finance Ministry.   

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It is here that on behalf of IM12 we want to thank the Swiss Embassy in Moscow. We enjoyed the visit very much. A special thank you to Yves Morath and his family for opening their home to us.