Bashkortostan special report: Chamber of Commerce and Industry - Home from home

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Lucy Fitzgeorge-Parker
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Foreign investors will have instant access to a full range of business services and an unparalleled network of contacts when Ufa’s new B2B Centre opens this summer.

Euromoney special report: Bashkortostan

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For investors from overseas, doing business in Russia can be a daunting prospect. Not only is there often cumbersome bureaucracy to be negotiated, but even simpler issues such as coordinating transport and accommodation can be challenging.

From this autumn, however, foreign visitors to Bashkortostan will no longer have to go through this process alone. Instead, they will be able to call on the services of a unique facility provided by the Republic’s Chamber of Commerce and Industry (CCI) to help smooth their path into the region.

Yury Pustovgarov, president of the CCI, explains the concept of the chamber’s new B2B Centre. "The main idea of our centre is that it should serve as a home from home for foreign visitors for the duration of their stay in Ufa," he says. "Once the B2B Centre is operational we will be able offer a full-service package to investors. We will be able to look after them from their first enquiry through to negotiating with local businesses and government departments."

Historic setting

The centre will be housed in a historic mansion in the heart of Ufa’s business district. The building, which started life as the private residence of famous 17th century Ufin merchant Udayev, has been carefully restored and adapted at a cost of R36 million ($1 million).

In its newest incarnation, the landmark three-storey building will provide a total of 900 sqm of high-end business infrastructure. The facilities available to foreign visitors will include five meeting spaces, comprising a 136 sqm multi-functional hall, a 90 sqm presentation hall, two meeting rooms of 48 sqm and 27 sqm, and a 22 sqm negotiation room.

In addition, the centre will offer six versatile offices, a recreational area with a bar and billiards room, and a comfortable lobby. High-speed wireless internet will be available throughout the building, while the meetings and conference rooms will feature a full range of business tools including laptop computers, projectors, screens, video and audio-conferencing equipment, and simultaneous interpretation systems.

All these facilities will be available around the clock to foreign business visitors throughout their stay in Bashkortostan. They will also be available for use by employees preparing the ground for visits to Ufa by business delegations from overseas.

The CCI’s next project: a 5,000 sqm purpose-built business centre due to open by 2017

One-stop shop

The services of the B2B Centre, however, will not be limited to its physical infrastructure. Experienced bilingual staff will be on hand to organize every aspect of foreign investors’ visits, from travel and accommodation to arranging meetings with local companies. The centre will be able to provide priority passes at Ufa’s international airport for all passengers, as well as arranging convoys from the airport, hotel transfers and escorts for visitors for the duration of their stay in Bashkortostan.

CCI officials note that, although local hotels have previously offered some of these services, as well as business and meeting infrastructure, the launch of the B2B Centre will mark the first time that all these functions have been coordinated under one roof by a specialized provider.

What is more, the centre’s efficiency will be enhanced by the fact that it will be run as a separate subsidiary of the Chamber of Commerce and Industry – a unique feature that will distinguish it from similar facilities in other regional Russian cities such as nearby Kazan.

This model, which allows the chamber itself to focus solely on its core functions, is also being used to inaugurate a range of other specialized services for business. In the past 12 months, the CCI has founded a dedicated business school and an engineering subsidiary, as well as a new body dedicated to promoting investors’ interests, the Agency for Business Development.

MICE market

A fourth subsidiary has been tasked with coordinating exhibition activity in Ufa, something the chamber is particularly keen to promote as part of its strategy for the meetings, incentives, conferences and events (MICE) market.

To date, MICE business in Bashkortostan has been limited. Analysis by the CCI suggests that around 1,000 business events have been taking place annually in the Republic in recent years, but the majority have been sales-related.

Yury Pustuvgarov, president of the Chamber of Commerce and Industry
Yury Pustuvgarov, president of the Chamber of Commerce and Industry
Pustovgarov is convinced that the region can do much more in this sector, given its strong industrial base and strategic location, but warns that work will be needed. "The MICE market today in Ufa is dormant but has great potential," he says. "Our research shows that companies would be interested in the city as a meetings location, but if we are to attract significant interest from international firms we will need to take a proactive approach."

The B2B Centre will be a significant step forward in this respect. According to the CCI, the centre will have capacity for more than 200 conferences and forums a year, as well as around 52 presentations and the same number of incentives events.

Second centre

That capacity will be expanded even further on completion of the chamber’s next project, a 5,000 sqm purpose-built business centre due to open by 2017. The new building, which will be located around 10 minutes’ drive from the CCI’s current headquarters, will feature state-of-the-art facilities and is projected to cost $10 million.

Funding for the project is expected to be provided jointly by the chamber, the private sector and Ufa’s town council, which is cited as a prospective tenant for the centre. CCI officials say the new facility will be of a sufficient size to serve as a convention centre for Ufa, and even a world trade centre.

Nevertheless, the most valuable service that the chamber and its subsidiaries can provide to investors will likely remain access to its extensive network of contacts within Bashkortostan’s business community. The chamber’s board of directors comprises representatives from the top 20 companies in the Republic, covering all the major industries in the region, and its members include a broad spectrum of businesses large and small.

"We have an unparalleled knowledge of our domestic market, both in terms of the business environment and the leading participants, which makes us ideally qualified to introduce foreign visitors to Bashkortostan," says Pustovgarov.

Government contacts

The chamber also has strong links to government. Pustovgarov is keen to stress, however, that although the CCI is supported by the regional administration, its function is to promote the interests of private firms. "We have the support of our government and a mandate from the president, but the chamber is an independent body," he says. "We receive some state funding but exclusively on a competitive basis as a private sector entity."

The B2B Centre is a case in point. Some of the funding for the project was provided by the CCI itself, in conjunction with the Chamber of Commerce and Industry of the Russian Federation, but a substantial sum was also contributed by the private sector.

It is this independence, adds Pustovgarov, which means that the chamber is ideally placed to help potential overseas investors negotiate the complexities of Bashkortostan’s state sector. "Foreign investors need someone to help them navigate local bureaucracy and represent their interests, and I see that as our role," he says. "Our strategic goal is to break the government monopoly and offer an alternative conduit for foreign investors who want to discover what Bashkortostan has to offer."

Educational role

As he explains, a major part of that role will involve educating local businesses and government officials on the advantages to be had from engaging with overseas firms. "A key challenge for us is to change a certain view of foreign investors held by many in our Republic," he says. "We want to encourage both private and public sector participants to see such investors as valuable partners who may share their experience and knowledge."

The chamber’s function as an intermediary between the private and public sectors will be particularly in focus in 2015, when Ufa is due to receive its biggest influx of foreign visitors to date for the BRICS and Shanghai Cooperation Organization summits. "Our B2B Centre will have a key role to play during the summits next year as a centre for the SCO Business Council," says Pustovgarov.

He adds that preparing for the two summits will be top of the list of priorities for both the Chamber and the B2B Centre over the next 12 months. "We need to ensure that we are ready for these events," he says. "This is both a challenge and an excellent opportunity to develop our services and business tools."

First impressions

The work will be of crucial importance, Pustovgarov notes, because of the potential offered by the summits for shaping foreign investors’ perception of Ufa and Bashkortostan. As he points out, many attendees will be visiting the Republic for the first time – and, for better or for worse, their initial impressions are likely to have a lasting impact.

"When it comes to promoting Bashkortostan to foreign visitors, first impressions are critical," adds Pustovgarov. "Indeed, I would go so far as to say that if you get those right, you have won 99% of the battle."