Southern Exporters Catch the Moment: Who and What Exports in the South of Russia


Russian President Vladimir Putin said that non-resource export increased by 17% in the first quarter. South of Russia confirms this statement by the example of real companies.

In spite of new economic crisis, last year was quite successful for southern exporters. According to Southern Bureau of the Customs, lack of exports sales to Ukraine was made up by growth of export sales to other countries. At the same time import from Turkey, China, Germany, France and USA was reduced. The total volume of import reduced by 10, 6% last year to 10, 4 billion dollars. Thus devaluation effect can be considered as accomplished.

In total, volume of export of Southern Federal District increased only by 6, 8% (up to 19, 4 billion dollars)- such slow dynamics was caused by Ukrainian factor. But upon a closer view export to the CIS countries has grown significantly, even in such segments of nonhydrocarbon export as machinery, light industry, chemicals and agribusiness. Despite the fact that oil and oil products still dominate in Southern Bureau of the Customs’ export statistic, share of other goods gradually increases (from 41,3 to 43,8% in 2013-2014).

Entrance to export markets became a part of strategy of development for large regional companies. Each case can be illustrated by several factors which catalyzed this process. First factor is limited possibilities of internal demand which is typical for high-tech companies, but such traditional branches of Southern industry as pig breeding and poultry industry may also face it. Second - is the possibility to sell their products at an attractive price- here we can mention fuel and mineral fertilizer producers, grain companies. But today many enterprises of other branches of industry develop in such a way, for example glass industry. Third factor- export trade implies improvement of business performance up to the world standards.

“Atlantis-Pak” Company: introduction to Europe

Export sales of “Atlantis-Pak” which is in the structure of Ivan Savvidi’s “Agrocom group” increased by 19%, in money terms-2, 4 billion ROUBLES in 6, 4 billion of annual earnings of the company. Total dynamics compared with 2013- plus 12% to earnings and plus 5% to the volume of output. General Director of “Atlantis-Pak” company Igor Perepletchikov says that company has never produced and earned so much: “The latter half of the year we worked at 100% of capacity, even though we had considered 90% to be a good rate.”

Expected share of export sales is about 60%, while company has plans for next three years to double earnings. It is possible due to main projects of the company-product rollout and active presence in external markets.

“Atlantis-Pak” doesn’t have standard production- 100% of its products are tailored to clients’ needs. Barrier packaging film supposed to become the first standard product of the company. This product is used for perishable foods storage and is not produced in Russia. This year company launched its production; amount of investment is about 4 million EUROS. Russian market of barrier packaging film was estimated by “Agrocom Group” at 20 billion ROUBLES. Share of local materials in this product can make about 50%, while share of imported materials in sausage casings is 80%. This new project was launched due to stable currency earnings, which exceed needs of the enterprise, according to General Director of “Agrocom Group” Sergey Sapotnitsky.

“In all countries of the European Union since 2014 is incurred tax 6,5% because our country was excluded from the list of the countries with developing economy- says Igor Perepletchikov.-Tax in Egypt for goods from the European Union is 0%, and 20% for Russian goods. Production site in Czech Republic gave us an opportunity to avoid these taxes. We have already received several refusal to cooperate-potential clients had doubts that supplies of our production would be stable. So allocation of production in Czech Republic let us to mitigate these risks.”

Previous conception of company’s work abroad implied some local partners, who acted on behalf of Russian company. There was a production-logistic centre in Czech which was used also for additional processing of casing, corrugation, overprinting. “Atlantis-Pak” decided to open its own commercial missions in Germany and Poland, even though the company had long history of cooperation with these countries. At the same time many trademarks are being registered- by the beginning of the year “Atlantis-Pak” has already registered 40 trademarks.

Rostov production site is being modernized these days- in the first half-year new triple wall sausage-casing production line was launched. Its capacity twice as many as that of previous- 250 km. of barrier sausage casing per day. It is fourth production line of the company, previous 3 produce double-double casing. One of such production lines will be transferred to Czech and start its work in the fourth quarter of this year.

Notable, next export markets of the company may be not in Europe. Igor Perepletchikov says that sales in Africa, Latin America, and South-Eastern Asia expand at fast rates.