Letter from CEO of the REC Group

Petr Fradkov,
CEO, REC Group

Dear colleagues and partners,

2016 was a landmark year for the Russian Export Center Group (REC Group). It was a dynamic and eventful year: we completed the integration of the three companies — the Center, EXIAR insurance agency and Eximbank of Russia — and managed to adjust our business processes to make the cooperation with the REC Group as convenient and attractive as possible for the exporters.

The huge effort we have put forth helped us strengthen our position as a key export development institution and close the year with pretty decent results. The companies within the REC Group managed to significantly exceed the performance targets set by the Russian government. In particular, more than 500 exporters received support from the REC in 2016. The amount of exports supported by the Group totaled more than USD 8.9 billion (excluding the Yamal LNG deal).

We remain committed to the idea of blending the opportunities offered by state funding with the client-centric business approach — a strategy that has enabled us to meet the demands of very different groups of customers, from large industry enterprises to smaller-scale FMCG, food and IT solutions companies, and many other businesses.

In 2016 we completed the development of and launched a new line of non-financial services that cover all the aspects of exports activities — from planning an export to the actual shipment, from finding a potential business partner abroad to post-export services.

Another 2016 highlight was REC’s obtaining the function of the Agent of the Russian government in export licensing, issuing free sale certificates and implementing state support programs for certain industries in such export areas as logistics, certification and intellectual property rights protection. As the result, we supported export shipments worth around RUB 27 billion, and issued more than 160 export licenses.

We have continued to develop the existing analytical instruments for supporting Russian export-oriented companies and to introduce new ones. In addition to macroeconomic research and analytical reports available on specific countries, industries and groups of products, REC’s customers can perform analytical work independently, using the resources of our recently-launched Regional Export analytical portal. Moreover, the analytical unit of the REC has developed such products as the country ranking by their potential for exporters and the trade barriers and limitations navigator.

The REC Group has actively developed the financial and insurance support of Russian non-commodity exports thus enabling our customers to feel secure in every macroregion of the world, including the countries that have traditionally been regarded as challenging for the Russian companies.

To successfully promote Russian goods and services abroad, we have continued to streamline the REC Group international network while prioritizing the necessity to maintain high quality client service. The Group has opened its representative offices in Belarus, Kazakhstan, Iran, Vietnam and Tajikistan. In addition, the representatives of the Group work with such countries as China, Argentina and South Africa.

The REC Group has successfully developed its domestic points of presence: 11 regional offices currently operate across Russia, from Kaliningrad to Vladivostok. In addition, we have closely cooperated with the administrations of the subjects of the Russian Federation, export support centers and regional business communities.

We developed and launched a specialized educational project for regional exporters that primarily targets entry-level exporters who are interested in obtaining knowledge on all aspects of export activities, as well as representatives of regional export support structures. In the reporting period the project was launched in 13 regions. Since the program offers opportunities for both classroom and online education, several thousand people were able to take advantage of the program. This project laid the foundation for the development of new educational modules, as well as for cooperation with the country’s leading higher education institutions.

Aiming to embrace as many exporters as possible, we made a great effort to digitize some of our services in 2016. Within just one month we provided more than 800 services to nearly 300 exporter companies. We intend to further develop these services in 2017.

The activities of the Russian Export Center go well beyond these focus areas. The Group also holds master classes and workshops, field sessions in the regions, and prepares educational materials on various aspects of export activities. In addition, the REC has developed special projects, such as boosting exports through e-commerce and promoting Russian food products in the foreign markets by field tasting sessions for foreign retail chains and distributors.

These activities constitute a small part of an enormous process — promoting Russia’s positive image abroad as a producer of all kinds of high quality goods. In 2016 we developed and introduced the Made in Russia logo — a bird in the colors of the national flag. Since mid-2016 we have used a single umbrella brand to promote Russian manufacturers at international exhibitions and trade fairs.

It is worth noting that 2016 saw some major events that had an impact on both the Russian economy at large and its exports. Despite the challenging macroeconomic conditions, non-commodity non-energy exports have displayed a positive trend: their share amounted to 38.2% of total exports by year-end displaying an increase of 4 pp compared to 2015. Meanwhile, the share of export companies supported by the REC equaled 8.3%. Given the relatively short period of the REC’s existence, these figures are a vivid illustration of the Group’s well- coordinated effort that is supported by the federal agencies.

Another milestone event occurred late in 2016, when the Federal Project Office adopted the International Cooperation and Export priority program that is closely connected with the activities of the REC Group and lays the foundation for the successful development of Russia’s non- commodity exports. In 2017 we will be taking on some ambitious tasks, which is why the authorities of the REC as the agent of the Government have been considerably broadened. We intend to further develop the strategic initiatives and pursue our main goal — creating a favorable environment that will secure a 7% annual growth in non- commodity exports – and thus meet the expectations of the state and the business community.