Deutsche Messe’s Andrej Gross on Russia trade fairs

Andrej Gross is Deutsche Messe’s Director for Russia and Director of Governmental Affairs in Berlin. He supervised the establishment of Deutsche Messe’s subsidiary in Moscow and is responsible for managing the Industrial Trade Fair Moscow and for developing new trade fairs in the region. Based in Hannover, Germany, and present in more than 100 countries, Deutsche Messe AG is the world’s leading trade fair organizer and notably runs HANNOVER MESSE, the largest trade fair in the world. The company recently expanded to Russia and held its first Industrial Trade Fair Moscow in November 2010. Gross discusses his company’s business decisions and plans, and explains why he thinks there will be more Russia trade fairs in Russia in the years ahead.

1. Deutsche Messe is continuing to expand its foreign business and has successfully established a subsidiary in Moscow, which you manage, organizing trade fairs in RussiaRussia trade fairs. What were the reasons for Deutsche Messe’s expansion in Russia?

Russia has for many years been an indispensable part of the European and world economy and is gaining steadily in importance for key industries in Germany. When we decided to enter the Russian market with our trade fairs, the most serious repercussions of the recent global economic and financial crisis had just become apparent. In 2009, trade between Germany and Russia was severely affected. We then took a deliberate decision, as Deutsche Messe AG, to be ready with our business platforms when the economic recovery takes hold. And developments have since vindicated us. Our trade fairs were not alone in proving highly successful; overall trade with Russia has also recovered significantly. By August, German exports to Russia had already risen to a volume of €18.8 billion.

2. In your view, which industries have good chances of success in Russia?

Russia really is a vast country, which is why the pace of development differs widely across industries and regions. President Medvedev and Prime Minister Putin are determined to end the Russian economy’s reliance on oil and gas exports and achieve economic diversification. Rightly, their main focus is on such crucial areas as energy efficiency, water management, transport, logistics and the traditional sectors of manufacturing industry. It will be extremely interesting for foreign firms to get involved in these industries in Russia as well as in ICT/telecommunications and pharmaceuticals/healthcare. This is something we regularly hear in discussions with our international exhibitors.  

3. For many companies, Russia is an interesting market, yet some companies have serious reservations about expanding their business to Russia. What would you say to these companies? Why does it pay off to invest in Russia? What are your prospects for Russia trade?

Companies that want to develop their activities in Russia need to build long-term relationships based on trust, and make a long-term commitment here. To be successful it is also important to get to know Russia, both the country and its people. Those who do will be aware of the considerable changes the country has been undergoing for years. The government has undertaken strenuous efforts to ensure comprehensive legal security and favorable investment conditions for foreign companies. I am delighted to see that programs to support start-ups are now in place. Small and medium enterprises (SMEs) are urgently needed, especially in manufacturing industry.

In Germany, for example, SMEs account for nearly 40 percent of sales revenues and employ about 65 percent of the country’s employees. But even in Germany these structures took a long time to become established. In my view, foreign enterprises can at present make only one mistake, and that is not being active in Russia.

4. Deutsche Messe hosted four exhibitions in Moscow in autumn 2010. What kind of feedback have you received from German and Russian companies?

The response to our four trade fairs has been outstanding. CeMAT Russia, MDA Russia, IA Russia and Surface Russia - the trade fairs we developed with our partner ITE, have immediately established themselves as important fairs on the Russian market – with 10,000 square meters. With these fairs we are covering key topics of the Russian President’s modernization offensive. The enormous trust that we (as organizers of the Hannover Messe) enjoy with German and international manufacturers and industrial associations, naturally plays a role in this success. We are convinced that our trade fairs in Russia will grow in the years ahead. In 2011, they will already be held at the Crocus Expo center.

5. What are the key objectives and strategies Deutsche Messe plans to pursue in Russia in the future?

For us, it is absolutely clear that Russia is a growth market. In the medium and long term we see considerable growth potential for the Russian economy. We are currently assessing other offers that we intend to launch in the Russian market in the near future. The discussions we are holding with partners – including our Russian partners – make me optimistic. At the same time we want to encourage more Russian firms and projects, such as Skolkovo and the so-called Titanium Valley, to present themselves at the leading world trade fairs CeBIT and HANNOVER MESSE, which we also organize, so that they can find new business partners in Western Europe. HANNOVER MESSE actually covers the very technological areas that Russia will promote in the course of its modernization.