Marchmont’s 2009 Year End Review

30 Dec '09
Oleg Kouzbit, Online News Managing Editor

2009 was one of the most difficult years for business in the post-war global economy. Russia and its economy took a real beating at the peak of the crisis. To find out how some Russian business leaders coped with the crisis, Marchmont asked them to share their personal experiences, as well as their prognosis for 2010.

Dr. Ildar Ablayev, rector of the Tatar Management Academy:

“It was a challenging year for us. Our long-standing customers, a student body from among SME managers, discontinued classes. However, we succeeded in keeping larger corporate clients that stayed afloat. Moreover, we ultimately increased the student body from such companies through painstaking work with their managements.”

It is the way everyone should do under the circumstances, Dr. Ablayev feels. “Don’t hibernate, don’t get lazy, boost prudent expansion in your market,” he suggested to Marchmont readership, and reminded that “no pains, no gains.”

Nikolai Badulin, a Siberia-based business angel and CEO of two innovation and investment companies—Tomsk’s FiBr and Tyumen’s Samotlor-Invest:

“I would characterize the outgoing year by quoting one of my fellow-referees at September’s EuroTechTour Russia roadshow (www.techtour.com) as saying, “Hurray to the crisis—it will flush the slush!”

To the business angel, this is the main result of the year, as according to him, the global financial turmoil has laid bare what impedes Russia’s development, and compelled both economic movers and shakers and SMEs to mercilessly deal with it. Managers and business owners have become much more responsible and receptive to the lessons the crisis has taught, Mr. Badulin said.

“Russia’s economic approaches and risk structures have become more like those worldwide. Russian businesses never until this year really tasted competition; they have now got more adequate and organized. Innovation projects presented this year showed that even in Russia there was a skillful and thought-out strategy for investing in innovation. Take as an example the problem of how mobile operators couldn’t obtain frequencies for their 3G networks in Moscow. Company Yota has addressed it innovatively: to avoid procrastination, it launched 4G! My advice to all businesses is to be truly innovative in all business challenges like the one I just mentioned—and you will surely win.”

He also invited all to visit www.forbesrussia.ru to know the minds of Russian business angels.

Denis Pryanichnikov from the Issuers Division of Russia’s MICEX stock exchange:

“I was personally involved in the launch of an Innovation and Investment Market (IIM) project at the MICEX. When it was being masterminded in late 2008, the idea looked hardly feasible; introducing a new tool for innovation companies to raise funds at the time of avalanche-like defaults of corporate bond and blue chip issuers sounded like a big challenge. We invested much time and effort in preparatory work spanning Russian from St. Pete to Tomsk, and then eventually launched it on December 10, 2009. The biotech Human Stem Cell Institute (HSCI) was the first to do its IPO through the new mechanism. God and currency willing, I hope next year will bring more IIM-based transactions.

In my opinion, the crisis isn’t gone yet but rather transformed in its sluggish or ‘sub-acute’ phase. However, hang in there; develop and launch new projects as this will determine the post-crisis future of both Russia’s stock market and companies listed.”


Andrei Zvezdin, president of Group Finance:

In March, Group Finance, part of Nexia CIS, was ranked by Expert Magazine as Russia’s 12th largest audit and consulting groups. The firm continued aggressive regional expansion and concluded a number of acquisitions in Russia’s audit market. But what Mr. Zvezdin regards as his company’s most notable achievement is the certification of its quality management system in accordance with the new international EN ISO 9001:2008 standard—the first among Russia’s auditors and consultancies.

Mr. Zvezdin was upbeat about the future, too, and sent out an optimistic message to other business leaders.

“In Chinese, two hieroglyphs stand for the word ‘crisis’, of which one means ‘peril’ and the other ‘opportunity.’ Please remember that it is exactly the ruthless financial crisis that has the potential of becoming a new window of opportunity for your businesses, the time to reevaluate strategies and capitalize on alternative scenarios. Competition means survival of the fittest, the market rule says, and the crisis now tends to keep in business only professionals who are sturdy enough and can make quick and smart decisions.”

He also wished business leaders confidence, good progress despite all odds, and full realization of their strategic objectives in 2010 and beyond.

Yevgeny Savin, founder and CEO of UNOVA Media:

“In 2009 I started my own company, launched a number of projects, and found a lot of new opportunities for myself. I paid dearly for that, but good news is: I now know the price.”

Yevgeny Evdokimov and Anatoly Zaikin from Russia’s nanotech corporation, Rusnano:

“Debilitated as they might be, both the Russian government and emerging private investors in innovation are still trying hard to move closer towards one another in a bid to create a quality innovation infrastructure capable of aiding in commercialization of a huge number of Russian scientific projects.”

Both men explained to Marchmont that Rusnano was now working on its Nanotech Centers program to be implemented within the next few years, and the centers were expected to become one of the components of such infrastructure.

“There mission will be to help both educational/R&D institutions and private companies market their nano-related developments and sell integrated solutions and/or products, and selling licenses or setting up hi-tech SMEs is to be a way to achieve this.”

As Mr. Zaikin said, a tender has been opened for the creation of nanocenters, and first winners will be announced early next year. By the end of 2010 first nanocenters are to be properly financed, and up and running, he added.

Philip H. de Leon, president of Trade Connections International, a Washington, DC based consultancy:

“2009 was a tumultuous year. Companies that have money to retain my services as a consultant or representative are hoarding it and so are banks, even though everyone agrees they should be lending it to jump-start the economy. After a period where no one was doing business or even talking about doing business as if it would bring further bad luck, we have now entered in a phase where not many are doing business but where most are making plans for 2010. The next phase will be where everyone will get back to doing business, beyond the survival mode we are in.”

For Mr. de Leon, too, any crisis brings both pain and benefits.

“This downtime has enabled me to reassess my business model, fine-tune my message and more importantly strengthen valuable contacts with existing and potential business clients and partners, finance providers and facilitators, ambassadors and embassy staff, law firms, translators, etc. With such a network in place, I will be able to take on projects that will come across my desk and plug in all the right people to work with.

This downtime has also enabled me to publish many articles on emerging markets, energy, finance, and outsourcing issues, to give interviews, to moderate panels and speak at conferences, enabling me along the way to deepen my expertise in promising sectors. I thank the crisis but it is time now for it to go away.”
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